Author: Brian June 25, 2014

I often come across people who want to exclude certain items of the work from a house building contract to save money.

They may want to do the work themselves, use their own tradie (relative or friend) or use a different supplier to install things before or during the build.

Liability for Problems

The main issue of splitting the House contract is that you can finish up with split responsibility,  giving the Builder a  ‘Get Out of Jail Free Card’.

If there is a problem during construction, or defect that is any way related to the service you excluded from the contract then:

• Who do you chase for remedy; Builder, Supplier, or even accept responsibility yourself?
• The Builder, and the Supplier, will usually deny all liability blaming the other.
• Whoever you believe is at fault you will to take it to an appeal, or arbitration,which will take time and money
• To support your claim you will probably need an independent professional opinion which will add to the cost.
• There is no guarantee that the finding will be totally in your favour.

Examples of Issues

Here are a few common issues:

• Delay If your build contract goes over time one of the Builder’s strategies to avoid paying Liquidated Damages is to claims your supplier delayed the works as they were slower than his normal supplier.
• Theft Stealing is rife on building sites. Even though the Builder lets your supplier on the site there is normally an exclusion of liability for theft.
• Damage Scratches, dents, marks, breakages, at best the builder may provide compensation at a level related to the cost related to the value of the cheapest standard replacement. (for example a standard GRP bath not your $2000 free standing ceramic bath)
• Failure To Work Properly This mainly occurs on issues like plumbing or electrical items. Because of a lack of communication the wrong pipe or wiring has been installed, or the locations are incorrect. Again each blames the other and you can be up for an extra cost.
• Damage Scratches, dents, marks, breakages, at best the builder may provide compensation at a level related to the cost related to the value of the cheapest standard replacement. (for example a standard GRP bath not your $2000 free standing ceramic bath)
• Future Building Movement I have heard of people doing their own site preparation including cut or fill. In WA I know some people want to install their own drainage work (Soak wells). If you then get any building movement you may find you have given the builder a get out to avoid bills of tens of thousand of dollars.

I hope this helps you understand the issues, and also the risks, of splitting supply and/or work from the main building contract.

Personally I have always let the Builder provide a finished house and installed any extras later.