Contracts terms in recent times
Builders and suppliers contracts across Queensland are experiencing supply shortages and delays with many building materials and trades. This is having an impact on the progress of building works as well as causing a significant increase in costs. In a nutshell, builders can often no longer commit to fixed price contracts entirely and are now factoring in the price increases into the terms of their contracts.
The cause of delays and price increases has come about as a result of a perfect storm of circumstances including:
- COVID-19 isolation requirements and international shipping delays continue to disrupt building material supply chains.
- A local surge in demand created by the HomeBuilder grant in recent times.
- A global surge in demand for construction materials, particularly for timber and steel products.
- Recent east coast floods, further disrupting supply chains and adding to the demand for materials and trades. Insurance work is moving to the ‘front of the queue’ by offering higher prices for trade work. Recently roofers have expected an additional $10,000 from the builder to install a new roof. Insurance work is far more profitable and often easier work.
- Russia’s invasion of Ukraine has directly impacted our industry with a new 35 per cent tariff for engineered wood products (EWP) sourced from Russia and Belarus. Approximately 40 per cent of Australia’s EWP (used in flooring systems and roof trusses) is sourced from Russia or Belarus and alternative sources are limited due to elevated demand worldwide.
The reality is that cost increases and delays are often unavoidable and will need to be factored into build contracts.
Where contracts have already been signed, builders will work closely with their clients to discuss alternative timeframes and contract variations. Timely and open communication with you – the client – is often the easiest way to avoid a dispute.
To assist, the QBCC have prepared a general statement about the current situation that may assist in confirming and explaining the current situation to clients.
Where contracts are yet to be signed, it is important that you can commit to the terms of your contract considering the trade and material shortages and cost increases. We will always ensure that we, with the help of your Solicitor, explain the terms of the contract and ensure you’re not entering into a contract with terms you cannot deliver on.
Strike Property go through a stringent process when deciding to work with any builder. We choose only builders who have terms that not only protect the builder, but also you as the buyer. Builders are including various special conditions in their contracts now, so we ensure the terms are fair to both parties entering into the contract.