Material and Trade Shortages & Delays – Claiming EOTs and Variations under your Contracts

Building material and trade supply issues are an ongoing issue for builders into 2022 with supply shortages having significant impact on:

• timing and progress of building works; and
• increase in the cost of some materials and trades.

Members are reminded to:

• Factor these delays in when entering into a new contract.
• Consider whether utilising provisional sums or prime cost items is more appropriate for materials which are prone to fluctuating costs.
• Discuss with your clients the potential delays that may be experienced early. In some instances, contracts may need to be varied or extended.
• Where contracts need to be extended, ensure you issue any delay and extension of time notices within the prescribed period (being 5 Business Days of the delay occurring under the MBA ACT Home Building Contract 2020).
• Where contracts need to be varied, ensure you issue any variation notices using the process prescribed in the contract.

The MBA ACT Home Building Contract has provision for the Builder to increase the Contract Sum if any delays result in an increase to Actual Costs. We recommend you review clause 13 and 15 of the contract.

The ACT Home Building Contract, at clause 13, provides the types of delays that a builder may claim an extension of time for as well as the process for notifying the client of the extension of time being claimed and the entitlement for increase in actual costs, where applicable. It is important that you make a claim in accordance with the timing and process described in your contract and members are encouraged to ensure that they are making claims for extensions of time under building contracts correctly.  The IR and Legal Team have been fielding a number of calls about whether EOTs can be made later than when they occurred.

Where you are using another contract, you should review the clause(s) relating to delays and extensions of time as these will provide you with all the necessary information to allow you to make such a claim. If in doubt, we encourage you to contact us or to seek independent legal advice relating to your rights and obligations.

If you need assistance or advice in how to extend your contract due to trade or material shortages or delays, please contact the Member Services Team on (02) 6175 5900.