Cost Plus - Residential

HEAD CONTRACT Cost Plus (Residential)

For residential work undertaken on a cost plus fixed fee or percentage margin.

Cost Plus (Residential) New South Wales

CONTENTS Warning

1 2 4 6 8

The Agreement and Particulars of Contract

Owner’s Checklist and Questions under the Home Building Act 1989 Schedule 1 – Cost of Works, Builder’s Fees & GST Schedule 2 – Contract details to be completed by parties

Schedule 3 – Contract work details Schedule 4 – Special Conditions

10 12 13 13 14 14 14 15 15 15 16 16 16 17 17 18 18 19 19 20 20 21 21 21 22 22 22 23 23 23 23 24 24 24 25 26

1.

Responsibilities of Builder and Results of Construction

2. Owner’s Responsibilities Concerning the Works – Pre Construction & During Construction

2A.

Joint Responsibilities of the Builder and Owner

3. 4. 5. 6. 7. 8. 9.

Contract Documentation

Discrepancies and Ambiguities

Approval of Works by Relevant Authorities

Termite Treatment and Maintenance – Residential Building Work Only

Lending Authority Procedures

Possession of the Site, Access and Site Meetings

Quality and Availability of Materials

10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 26. 27. 28. 29. 30. 31.

Date for Commencement and Time for Completion

Delays and Extensions of Time

Compliance with the Requirements of Local and Other Authorities The Site is Presumed Suitable for and able to Support the Works Variations – Changes to Scope of Works Post Contract Date

Assignment and Subletting

Insurance Responsibilities Concerning the Works

Payment

GST – Its Impact on Work, Goods and Services

Suspension of Work Practical Completion

Payment on Practical Completion

Defects Liability Period

Owner’s Maintenance Obligations After Practical Completion

Dispute Resolution

25. Details Required to Support Notices of Dispute or to Substantiate a Dispute

Termination by the Owner Termination by the Builder

Charge on Land Service of Notices Estimate for Owner

Definitions

Notice of Practical Completion of Works NSW Fair Trading Consumer Building Guide

PLEASE READ THE FOLLOWING BEFORE COMPLETING COST PLUS CONTRACT

RESIDENTIAL BUILDING WORK The Home Building Act 1989 requires that a Builder enter into a contract in the name in which the Builder ’s licence has been issued. Details of the currency of a license may be confirmed with the Licensing Branch of NSW Fair Trading - Tel: 13 32 20 HOME BUILDING COMPENSATION FUND INSURANCE If residential building work is being done under this Contract (for example work for a consumer on a private residence or to build, alter or repair premises for people to live in) then insurance under the Home Building Compensation Fund must be taken out prior to work commencing if the contract price at the time of contracting is greater than, or expected to be greater than, $20,000.00. The Builder must ensure that the certificate of insurance is provided to the Owner . The Builder is to keep a copy for its own records. ADVICE REGARDING DISPOSAL OF BUILDING WASTE Many Councils require a waste management plan as part of the development approval. Review this carefully. For further information and advice you can contact the Department of Environment and Conservation by phoning 13 15 55, or visit the website www.environment.nsw.gov.au. Alternatively you can contact your Local Council and speak to the Waste Management Officer. The responsibility for proper waste disposal rests with everyone including Owner s and Developers. THIRD PARTY CONTRACT ADMINISTRATION If the Owner wishes to appoint an independent person or entity to administer the contract, then the contract should be amended to include specific terms and the assignment of specific duties to this third party. A special condition is available from the Master Builders Association of NSW for this situation. CONTROL OF MONEY SPENT It is highly recommended that the Owner and Builder agree that claims for payment be made and required frequently (eg every 2 weeks). The Master Builders Association of NSW believes this will enable the parties to more accurately identify and control the cost of the work and enable the budget to be kept under review. It is critical that the Owner and Builder report regularly to each other about any matters which affect the work to be done and payment for the same.

RESIDENTIAL BUILDING CONTRACT COST PLUS - MARCH 2015 - NEW SOUTH WALES (i)

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(ii) MASTER BUILDERS ASSOCIATION OF NSW - © Copyright

WARNING FOR THE PURPOSES OF THE HOME BUILDING ACT 1989

The Contract Sum or the amount to be paid by the Owner is not known as at the date of contract .

The amount of money payable to the Builder by the Owner is dependent upon the costs incurred by or payable by the Builder in carrying out work under the Contract.

(Owner to Initial)

Any figure nominated or stated below is only an estimate and is provided specifically subject to the terms of Clause 30 .

(Owner to Initial)

$ Estimated Cost of Works and Fees inclusive of GST pursuant to Schedule 1 Parts A and B .

The amount to be paid by the Owner is and will be determined by reference to the contract and the work done by the Builder and the costs incurred by the Builder . This will be influenced by and subject to adjustment by reason of such things as: ■■ Discrepancy in Drawings and Specifications; Refer to Clause 4 . ■■ Availability of Materials; Refer to Clause 9.

■■ Delays and Extensions of time; Refer to Schedule 1 Part B (a)(iii) and Clause 11 . ■■ Compliance with Requirements of Local and Other Authorities; Refer to Clause 12 . ■■ Site Investigations; Refer to Clause 13 .

■■ Variations to the works; Refer to Clause 14 . ■■ Insurance responsibilities; Refer to Clause 16 .

■■ Interest on Late Payments; Refer to Clauses 17(g) and 21(c) . ■■ Impact of GST; Refer to Schedule 1, Part C and Clause 18 . ■■ Suspension of works; Refer to Clause 19 . ■■ Costs of the works as set out in the Contract; Refer to Schedule 1 . ■■ Payment of Costs and/or Fees payable to the Builder ; Refer to Schedule 1 and Clause 17 . ■■ The work actually done being different to the work contemplated at the time of signing the contract. For example cost differences arising from details provided or choices made after the contract is signed. ■■ Correction of Defects to work, other than new work undertaken wholly by the Builder . The Builder is to correct defects to its work at its own cost. Refer to Clauses 20 and 22 .

This is page 1 of the contract. It specifically forms part of the contract document.

Owner

Builder

RESIDENTIAL BUILDING CONTRACT COST PLUS - MARCH 2015 - NEW SOUTH WALES 1

THE AGREEMENT AND PARTICULARS OF CONTRACT

WHO

OWNER(S): (insert name and address)

of

CONTACT DETAILS Telephone:

Mobile:

Facsimile:

Email:

BUILDER: (details as per the Builder’s licence)

of

CONTACT DETAILS Telephone:

Mobile:

Facsimile:

Email:

LICENCE NO.:

ABN NO.:

WHERE

SITE ADDRESS:

WHAT List at Schedule 3 the quote drawings & specification plus any other documents or details as appropriate.

WORK TO BE DONE AT THE SITE ADDRESS: (sufficient detail to describe the works eg. New house; renovation of existing house) AMPLE CONTRACT DRAWINGS prepared by: Reference Number(s): Date: SPECIFICATION prepared by: Reference Details: Date of Specification: The DRAWINGS & SPECIFICATIONS were approved by: Certification Number(s):

Date of approval:

The party who caused the drawings and specifications to be created is the:

(Please tick appropriate box) Owner

Builder

Owner’s Representative - (e.g. Architect, Building Designer)

2 MASTER BUILDERS ASSOCIATION OF NSW - © Copyright

FINANCE AVAILABLE:

Owner:

$___________________________________

# To be advanced on mortgage by: Lending Institution:

$___________________________________

## TOTAL FINANCE AVAILABLE: $___________________________________

# It is critically important that the amount detailed above is actually available to carry out the work. ## The above amount should not be limited to the estimated amount identified under Clause 30 .

IT IS AGREED THAT:

IT IS AGREED THAT:

(1) The Builder will subject to the contract terms and conditions, for the cost of the works (see Schedule 1, Part A ) plus the fees payable under the contract (see Schedule 1, Part B ), properly treated for GST complete the works shown upon the Drawings and described in the Specification. The works may be adjusted under the contract.

(2) The Owner will pay to the Builder the cost of the works plus the fee payable under the contract and the GST consequences of the work, at the times and in the manner required by the contract.

(3) (i) The Owner acknowledges and understands that the total cost of the works, including the fee payable to the Builder and the GST payable on the works is not known or ascertainable as at the date of this contract.

(ii) The Owner acknowledges and understands that the work done and completed and the materials used directly affect the question of costs payable by the Owner .

(iii) The Owner has read and understood the warning as to Cost Plus Contracts, which appears at the front of this document. SIGNED by the BUILDER: AMPLE (iv) The Owner is liable to pay for the proper consequences of the tax commonly known as the GST referable to the work carried out by the Builder under this contract. The parties sign below, this day of 20 , to confirm their acceptance of this agreement. SIGNED by the OWNER(S):

RESIDENTIAL BUILDING CONTRACT COST PLUS - MARCH 2015 - NEW SOUTH WALES 3

This and the following page are required by the Home Building Act 1989

STATUTORY OWNER’S CHECKLIST AND QUESTIONS

1 Have you checked that contractor holds a current contractor licence?

Yes

No

2 Does the licence cover the type of work included in the contract?

Yes

No

3 Is the name and number on the contractor’s licence the same as on the contract?

Yes

No

4 a

Is the work to be undertaken covered in the contract, drawings or specification? Did the Builder provide (i.e. have prepared) the contract drawings and specification detailing the work to be done? “No” means the Owner is or was responsible for having such documents created.

Yes Yes

No No

5 Does the contract clearly state a contract price or contain a warning that the contract price is not known?

Yes

No

6 If the contract price may be varied, is there a warning and an explanation about how it may be varied?

Yes

No

7 Are you aware of the cooling-off provisions relating to the contract?

Yes

No

8 Is the deposit within the legal limit of 10%?

Yes

No

9 Does the contract include details of the progress payments payable under the contract? Yes

No

10 Do you understand the procedure to make a variation to the contract?

Yes

No

11 b Are you aware of who is to obtain any council or other approval for the work? Is the Builder responsible for getting any approval?

Yes Yes

No No

12 Do you understand that you are not required to pay the contractor a deposit or any progress payments until the contractor has given you a certificate of insurance under the Home Building Compensation Fund (except where the work is of a kind that does not require insurance)? Yes 13 Has the contractor given you a copy of the Consumer Building Guide, which provides key information about your rights and responsibilities under NSW’s home building laws and where to get more information? The Consumer Building Guide is included at the end of this Contract . Yes The highlighted words above have been inserted by the Master Builders Association of New South Wales as an aide to the contract parties. Despite a “no” answer to questions a and/or b the contract may be ready to be signed. AMPLE No No 14 Does the contract include a statement about the circumstances in which the contract may be terminated? Yes No

4 MASTER BUILDERS ASSOCIATION OF NSW - © Copyright

1. Signatures Do not sign this contract unless you have read and understand the clauses as well as the notes and explanations contained in this document. If you have answered “no” to any question in the checklist, you may not be ready to sign the contract. Both the contractor Builder and the Owner should retain an identical signed copy of this contract including the drawings, specifications and other attached documents. Make sure that you initial all attached documents and any amendments or deletions to the contract. 2. Signed copy of Contract Under the Home Building Act 1989 a signed copy of the contract must be given to the Owner within 5 working days after the contract is entered into. Home Building Compensation Fund The contractor Builder must provide you with a certificate of insurance under the Home Building Compensation Fund before the contractor Builder commences work and before the contractor Builder can request or receive any payment. 3.

5. Acknowledgement of Owner I/we have been given a copy of the Consumer Building Guide and I/we have read and understand it. I/we have completed the checklist and answered ‘Yes’ all items. Note. Where the Owner is a company or partnership or the contract is to be signed by an authorised agent of the Owner , the capacity of the person signing the contract, eg director, must be inserted.

4. Cooling off period for contracts with price over $20,000.00 Under the Home Building Act 1989 the Owner may, by notice in writing , rescind the contract in specific circumstances. The contract may be rescinded even if work has commenced under the contract. A notice of rescission can only be given to the contractor Builder if the contract price is over $20,000 and:- (a) where the Owner has been given a copy of the signed contract – it is provided within five (5) clear business days after being given a copy of the signed contract, or (b) where the Owner has not been given a copy of the signed contract within five (5) days after the contract was signed – it is provided within five (5) clear business days after the Owner becomes aware of being entitled to be given a copy of the signed contract. The notice of rescission must state that the Owner rescinds the contract, and must be given to the contractor by leaving it at the address shown as the Builder ’s address. The Builder may retain out of any money already paid to the Builder the amount of any reasonable out of pocket expenses that the Builder incurred before the rescission. Further, the Builder is entitled to be paid a reasonable price for any work carried out under the contract to the date the notice of rescission is given. Capacity: Owner AMPLE Signature: Date: Name: [print] Capacity: Owner Signature: Date: Name: [print]

RESIDENTIAL BUILDING CONTRACT COST PLUS - MARCH 2015 - NEW SOUTH WALES 5

SCHEDULE 1 (Refer Clause 17 of the Contract)

PART A - Cost of Works which are Payable by the Owner or at the direction of the Builder The Cost of Works which are payable by the Owner include: (a) Wages and other entitlements payable to the Builder ’s employees or payable by reason of such employment relevant to the works. For example - wages, superannuation, workers compensation insurance, long service leave, redundancy and any other statutory or industrial entitlement. See Schedule 2 Item (a) for specific agreed rates for some employees. (b) Costs for the individual Builder or Builder’s director (or that of site supervisor) carrying out work, including administrative work, under the contract at the rate specified, being $__________.________ per hour. If no rate is specified the rate to be relied upon will be that detailed in the most current Master Builders Association of NSW charge out schedule for the classification of carpenter unless otherwise agreed. (c) The cost of having a service provided or a task done in order to have the works carried out, monitored, reviewed, certified and or approved. For example – surveyor’s fees, engineer’s fees, council fees, insurance costs or any other cost, fee, expense paid or payable because of the work. (d) The cost of all work carried out by trade contractors engaged by the Builder to carry out work at the work site or in relation to the works. This cost is conclusively evidenced by an invoice or statement of costs from the trade contractor. (e) Cost of all goods and materials ordered or/and paid for by the Builder necessary to carry out the works. (f) The cost of hiring equipment necessary to enable the Builder to carry out the works. (g) The cost as nominated at Schedule 2(b), for the use of the plant and equipment which is already owned by the Builder or which is acquired by the Builder to carry out work. (h) The cost of correcting, modifying or changing work already completed, which is changed by reason of a variation by the Owner , or which is defective for reasons other than due to materials provided by the Builder or the workmanship of the Builder . (i) The cost of complying with any site specific issues as to safety, pollution and or waste disposal, as directed by a relevant Authority or the Owner or the Owner ’s agents. (j) Any other cost or expense which the Builder is liable for and/or incurs by reason of the Builder carrying out work pursuant to this contract including, but not limited to, insurance costs and materials owned by the Builder . The Owner will pay to the Builder the Cost of Works as determined pursuant to Schedule 1 Part A together with a fee of $_____________________________(the fee). The fee will be paid on a pro rata basis over the construction period under the contract ( see Schedule 2(c) ) and at that times specified by reason of Clauses (b) and (c) which follow. If the construction period is extended pursuant to the provisions of the contract the fee payable will increase on a pro rata or proportionate basis to reflect the increased construction period. AMPLE PART B – Fees [Choose the appropriate alternative for sub-paragraph (a)] (a) COST OF WORKS PLUS PERCENTAGE BASIS - (Alternative 1) The Owner will pay to the Builder the Cost of Works as determined pursuant to Schedule 1 Part A , together with an additional fee equal to __________________% of the Cost of Works and those items referred to in Sub-Clause 17(a)(ii) . This fee is to be applied to a sum covering the Cost of Works which is determined on a GST exclusive basis. See also Clause 14(e) which may become applicable. OR (a) COST OF WORKS PLUS NOMINATED LUMP SUM BASIS - (Alternative 2)

6 MASTER BUILDERS ASSOCIATION OF NSW - © Copyright

For example, a $20,000.00 fee for a 20 weeks construction period becomes $24,000.00 if the period is increased to 24 weeks.

(b) Builder : when to make claims

The agreed date for the first claim under this schedule and Clause 17 is

________/________/________ and thereafter every calendar fortnight / _________ days.

(c) Owner : when to pay claims

The Owner must pay each claim submitted by the Builder to the Builder (or other persons or entities nominated by the Builder ) within __________ days of the Builder submitting the claim. If no period is stated then under Clause 17(e) , five (5) days will apply. The Parties must choose a specific date, period or number of days as appropriate. Delete the irrelevant details. PART C – The Goods and Services Tax (GST) (a) The amount payable by the Owner for work, goods or services will include an amount to reflect the proper consequences of the GST on the work. The Builder is to accurately and correctly identify the effect of the GST on the cost of the works and its fee. Refer to Clause 18. (b) Unless otherwise stated, all amounts or fees detailed in the contract Schedules will be exclusive of GST . In determining the costs payable under Schedule 1 Part A – all costs will be totalled exclusive of any GST as will the fee payable to the Builder (lump sum or percentage) under Schedule 1, Part B . The GST will be applied to the total of these amounts. PART D – Budget Report to be Provided Pursuant to Clause 1(e) and (f) of the Contract the Builder is to provide a budget report. The budget report should be provided on the: Note: this is to make the parties to the contract aware of the impact that: (i) the work done; (ii) choices made; and (iii) things discovered or addressed during the construction works have on the amount to be paid by the Owner . See also Clause 2A which requires the parties to meet when a conflict between the cost of the work (being the work done plus the work still to be done) and the capacity to pay arises or becomes apparent. AMPLE (i) _________ day of the calendar month; or (ii) when requested by the Owner but not more then once per fortnight / month. Please refer to Clause 1(e) and (f) of the contract.

RESIDENTIAL BUILDING CONTRACT COST PLUS - MARCH 2015 - NEW SOUTH WALES 7

SCHEDULE 2

(a) LABOUR RATES – GST exclusive unless otherwise stated. To be used in establishing Cost of Works carried out by the individual Builder or Builder’s director and his/its EMPLOYEES . The cost of work carried out for the Builder by independent contractors is determined pursuant to Schedule 1, Part A (d).

Builder ’s time (or that of site supervisor) [Schedule 1 Part A(b)]

$

per hour

Foreman

$

per hour

Tiler - floor and wall

$

per square metre

- roof

$

per square metre

Electrician

$

per hour

Carpenter

$

per hour

Bricklayer

$

per hour

Plumber

$

per hour

Plasterer

$

per hour

Painter

$

per hour

Labourer – Skilled

$

per hour

Unskilled

$

per hour

Apprentice

$

per hour

(b)

BUILDER’S PLANT AND EQUIPMENT

CHARGE RATE PER DAY $

(+ GST)

$

(+ GST)

$ SPECIFIC DAYS NOT INCLUDED IN CONSTRUCTION PERIOD (ii) In addition to rostered days off, public holidays, Saturdays and Sundays the following days will not form part of the construction period (eg. school holidays or periods when the Builder knows he is unavailable). AMPLE (+ GST) $ (+ GST) $ (+ GST) $ (+ GST) $ (+ GST) (c) CONSTRUCTION PERIOD to carry out the contract works. (i) The period of ___________________ days after the date of commencement, subject to Clauses 5, 10 & 11 . The proposed date for commencement, subject to Clause 10 , is ________/________/________.

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(d) CONSTRUCTION FUNDING SOURCE OF FINANCE:

Owner :

$

Lending Authority:

$

To be provided by:

(e) ANNUAL INTEREST RATE FOR OVERDUE PAYMENTS Clauses 17(f) and 21(c)

% p.a.

If blank, then 15%

(f) DEFECTS LIABILITY PERIOD Clause 22

weeks

(g) IS ADMINISTRATION OF THE CONTRACT BY A THIRD PARTY APPLICABLE: n YES n NO (Please tick appropriate box) If yes attach special condition identifying the duties and powers of the third party (available from the Master Builders Association of NSW).

(h) NOMINATING AUTHORITY AND ORGANISATION FOR DISPUTE RESOLUTION PROCESS

If blank, then The President of the Master Builders Association of New South Wales or his delegate.

(i) DELAYS COST – REIMBURSEMENT OF COSTS FOR DELAY

(i) Payable by Builder refer to Clause 10(e)

per calendar week

$

(ii) Payable by Owner Clause 11(f) (j) DEMOLITION MATERIAL WHICH OWNER IS TO KEEP: (List Details) AMPLE $ per calendar week

RESIDENTIAL BUILDING CONTRACT COST PLUS - MARCH 2015 - NEW SOUTH WALES 9

SCHEDULE 3

THE WORK & DOCUMENTS DETAILING THE CONTRACT WORK (a) Description of the Work to be completed by the Builder For example: (i) New house as per details in (b) and (c); (ii) Renovation to 2 storey house as per drawings and details in (b) and (c);

(b) IS ANY aspect of the WORK set out in the contract drawings and specifications excluded from the CONTRACT WORK? n YES n NO (Please tick appropriate box)

If yes , list below the aspects of the work shown in the drawings or described in the specification which will not be carried out by the Builder as part of the works. To avoid confusion list such work below. AMPLE This, for example, would be work which the Owner will do such as painting, landscaping, fencing, and driveways etc. This non Builder work may form part of the works to be done under the terms of approval but not work to be done by the Builder .

10 MASTER BUILDERS ASSOCIATION OF NSW - © Copyright

(c) Documents identifying the Builder’s Work Subject to point (b) on the previous page:-

Drawings A: Architectural E: Electrical H: Hydraulics L: Landscape M: Mechanical S: Structural TYPE DRAWING LIST REVISION DESCRIPTION DATE NO OF COPIES

Document Prepared by Owner / Builder

Specification PREPARED BY

DATED

SECTIONS RELEVANT

Document Prepared by Owner / Builder

(d) THE CONDITIONS OF NECESSARY APPROVALS FOR WORK TO COMMENCE ARE SET OUT IN: (identify or describe all documents relevant): AMPLE (Ensure the Builder receives a complete copy of all such documents before the work starts) Has the Builder received a complete copy of all documents identifying the conditions of approval as at the date of this contract?

n YES

n NO (Please tick appropriate box)

RESIDENTIAL BUILDING CONTRACT COST PLUS - MARCH 2015 - NEW SOUTH WALES 11

SCHEDULE 4 SPECIAL CONDITIONS If the parties have any terms they wish to add, they should be detailed here as a special condition. If there are no special conditions a diagonal line should be placed across this page.

AMPLE

12 MASTER BUILDERS ASSOCIATION OF NSW - © Copyright

Conditions of Contract

1. Responsibilities of Builder and Results of Construction (a) The Builder will, subject to these Conditions and the contract work details in Schedule 3, execute and complete the works required by the contract. (b) Statutory Warranties for Residential Building Work Pursuant to s18B of the Home Building Act 1989 (the “Act”) the Builder warrants that:- (i) the work will be done with due care and skill and in accordance with the plans and specifications set out in the contract; (ii) all materials supplied by the Builder will be good and suitable for the purpose for which they are used and that, unless otherwise stated in the contract, those materials will be new; (iii) the work will be done in accordance with, and will comply with, the Act or any other law; (iv) the work will be done with due diligence and within the time stipulated in the contract, or if no time is stipulated, within a reasonable time; (v) the work will result, to the extent of the work conducted, in a dwelling that is reasonably fit for occupation as a dwelling; (vi) the work under the contract or the relevant part will be reasonably fit for the specific purpose, if any, stated at as a special condition in this document. (Refer to Schedule 4 .) Plans and specifications (c) (i) All plans and specifications for work to be done under this Contract, including any variations to those plans and specifications, are taken to form part of this Contract. (ii) Any agreement to vary this Contract, or to vary the plans and specifications for work to be done under this Contract, must be in writing signed by or on behalf of each party to this Contract. (iii) This clause only applies to a contract to which section 7AA (Consumer information) of the Home Building Act 1989 applies. Quality of construction (d) (i) All work done under this Contract will comply with: (a) the Building Code of Australia (to the extent required under the Environmental Planning and Assessment Act 1979 , including any regulation or other instrument made under that Act), and (b) all other relevant codes, standards and specifications that the work is required to comply with under any law, and (c) the conditions of any relevant development consent or complying development certificate. (ii) Despite Sub-Clause 1(d)(i) , this Contract may limit the liability of the contractor Builder , and accordingly the Builder is not liable for a failure to comply with Sub-Clause 1(d)(i) if the failure relates solely to:

(a) a design or specification prepared by or on behalf of the Owner (but not by or on behalf of the contractor Builder ), or (b) a design or specification required by the Owner , if the contractor Builder has advised the Owner in writing that the design or specification contravenes Sub-Clause 1(d)(i) . Budget Report to be Provided (e) The Builder will regularly provide to the Owner a written report on the cost of the works. This will be known as the budget report. If no specific period is agreed by the parties then a budget report will be done once per calendar month. See Schedule 1 Part D where a date for providing the Budget report can be agreed. The budget report is to be provided no later then five (5) days after this date. (f) The budget report will include: (i) details of the work done, costs known and moneys paid or payable as at the date identified in the budget report; (ii) a summary of work being performed and still to be performed; (iii) details of work about which the Owner needs to provide instructions in order to allow the works to proceed; and (iv) a revised estimated total cost of works. The estimate above will be based on the Builder’s knowledge at the time the budget report is done. The Builder is to use reasonable care in preparing the budget report. However the revised estimated total cost of works provided in the budget report is not a lump sum or guaranteed amount and is subject to the impact of the costs and the fees payable or incurred under the contract. Refer to Clause 30 also. Owner’s Responsibilities Concerning the Works – Pre Construction & During Construction The Owner must: (a) produce to the Builder prior to the commencement of the works: (i) documentary evidence of the Owner’s title to the land on which the works are to be executed; and (ii) documentary evidence of the Owner’s capacity to pay the Builder for the contract work. If the Owner fails to produce the evidence required by this clause within ten (10) days of the execution of this Contract, the Builder may terminate the Contract in accordance with Clause 27 . (Refer to Clause 27 ). (b) provide to the Builder upon request, at any time during the contract, reasonable evidence of the Owner’s capacity to pay for the works. A failure to do

2. AMPLE

RESIDENTIAL BUILDING CONTRACT COST PLUS - MARCH 2015 - NEW SOUTH WALES 13

so may, pursuant to Clause 19 , allow the Builder to suspend work. (Refer to Clause 19 ). (c) make payment as required by the contract within the period required by the contract. This includes directing any lending Authority to make payment direct to the Builder . (d) provide written instructions to the Builder , where required, in a timely and proper manner so as to avoid delay to the works. This specifically relates to variations, directions and instructions in relation to work under the contract. (e) appoint the Principal Certifying Authority ( PCA ). (f) arrange and pay for any inspection of the works required to satisfy the mandatory inspection requirements which are part of the approval process or terms imposed by the PCA . Owner’s Duty to provide full terms of approval to Builder (g) (i) ensure that the Builder receives all terms and conditions of any approval by an Authority which affects or is relevant to the works. This should be done prior to signing the contract. If not it may cause the amount money to be paid by the Owner to change. (ii) if the Drawings and Specification are lodged by the Builder this duty will be met only if the Builder collects the approval documents from the Authority. 2A. Joint Responsibilities of the Builder and Owner The Parties acknowledge the fact that: i) the amount payable by the Owner under this contract is not as at the date of the contract known; ii) the total amount payable under the contract will not necessarily be ascertainable during the course of the contract; and iii) the amount to be paid by the Owner is the result of the costs incurred by the Builder , the Builder’s fee or return and the impact of the GST on the work done. The parties agree in order to manage this situation that: (a) they will conduct regular meetings in order to: (i) review the work done and costs incurred; (ii) review the work to be done and the costs thought to be payable for such work; and (iii) make decisions and choices regarding work under the contract so that the work to be paid for by the Owner is consistent with the Owner’s capacity to pay. (b) they will, in the event that there is a conflict between the costs of the work as set out in the budget report and the Owner’s capacity to pay, adjust the work to be done so that the conflict is eliminated and as such the work to be done is work for which the Owner has the capacity to pay. The adjustment to the work is to be recorded in writing and signed by both parties and treated as a variation under Clause 14 . specification warrants their accuracy and correctness including compliance with Clause 1(c) as applicable. As of the date of the contract, the documents detailing the work to be carried out by the Builder are listed in Schedule 3 . (b) Schedule 3 requires that the party responsible for having the drawings and or specification prepared be identified. If that detail is left blank it will be concluded that the Owner is responsible for all drawings and specifications relevant to the work. (c) The Owner indemnifies the Builder against all actions, proceedings and claims for or in respect of any breach of copyright against the Builder , where the Builder does not prepare the Drawings, or prepares the Drawings under the instruction, direction or supervision of the Owner or from sketches supplied by the Owner . Contract Represents Entire Agreement. (d) Apart from any terms implied by Statute, the whole of the terms, conditions and warranties of this Contract are set out in the Contract, drawings and specification (as set out in Schedule 3 ) and will not and are not in any way varied or affected by reference to any prior negotiations, stipulations or agreement, whether written or verbal. Discrepancies and Ambiguities (a) Should there be any discrepancy or ambiguity in the contract documents the following order of precedence is to be employed to resolve the same: (i) this Agreement and Conditions including any Special Conditions; (ii) drawings to a larger scale; (b) The Builder must notify the Owner in writing of any discrepancy or ambiguity in the contract documents and request instructions on how to proceed. This AMPLE 4. (iii) other drawings; (iv) the specification. (c) they will act co-operatively and in a manner which progresses the works. (d) either party may require a meeting to be held within five (5) days of a written request for a meeting. Both parties must attend such a meeting. The party calling the meeting will identify issues to be covered at the meeting. The Builder will provide a report on the matters raised at the meeting within a reasonable time but no later then ten (10) business days after the meeting. (e) for the purpose of improved certainty the scope of work to be completed by the Builder is limited to that work for which the Owner has made or can make and does make payment. Consequently any work which is not able to be paid for by the Owner will be eliminated from the work to be carried out by the Builder . 3. Contract Documentation (a) The party that provides the drawings and/or

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should be done as soon as practicable to allow the Owner to respond. (c) The Owner must give written instructions within five (5) days of receiving the above notice. If the Owner does not then the Builder may proceed with the work on the basis of the interpretation in accordance with Sub-Clause (a) above. (d) Should any instruction of the Owner require an interpretation to be adopted, other than that in Sub- Clause (a) above, then the Builder is entitled to a variation under Clause 14 and the work will be valued or costed accordingly. (e) Notwithstanding this clause, in case of any difference between scaled dimensions and figures on the Drawings, the figures are to prevail.

environmental risk that can not, necessarily, be controlled or eliminated. Work other than to create a new house (ii) In relation to work involving a renovation or addition to an existing residence or structure the Builder does not warrant: (a) that any termite treatment system installed as part of the contract work will provide protection to existing parts of the residence or structure; or (b) that the termite treatment system installed will prevent the “works” from being affected by an infestation of termites sourced from an existing structure or the environment and through the existing structure. Owner’s duty to maintain Termite Treatment System (b) The Owner is solely responsible for having the works and the property inspected at least every twelve (12) months with such inspection to be carried out by a licensed pest control person or firm. (c) Nothing the Builder does will extend the warranty applicable to the termite treatment system used in the works beyond the warranty period provided by the manufacturer of the treatment system. The Owner is responsible for all acts necessary or required to maintain this warranty. (d) No action will lie against the Builder for any costs: (i) incurred by or work done by or for the Owner or necessary to maintain the termite treatment system; or (ii) incurred or necessary because of the failure by the Owner to do a thing relevant to maintaining the proper working or maintenance of the termite treatment system. Lending Authority Procedures The following provisions are to apply to that part of the Contract funds which are being provided to the Owner by a Lending Authority: (a) The Owner will, prior to the commencement of the works, irrevocably authorise and direct the Lending Authority to pay to the Builder all monies which may become due to the Builder . The Builder is to receive a copy of this irrevocable authorisation within five (5) days of a written request for the same. (b) The Owner must provide to the Builder , written notice of the various stages at which inspection of the works will be required by the Lending Authority within ten (10) days of signing the contract. The Builder will notify the Lending Authority when such stages have been reached. (c) Subject to the Owner satisfying Sub-Clause 7(b) above, the Builder must promptly inform the Owner

5.

Approval of Works by Relevant Authorities Delay in Approval by relevant Authority.

(a) Should a Development Approval not be issued within forty five (45) days of the execution of this Contract, then either party may by giving written notice to the other, terminate this Contract without liability to the other except that the Builder will be entitled to a reasonable sum for services performed and reimbursement of all expenses incurred and payable as at the date of termination. Any such sum must be paid prior to or upon the termination.

Compliance with Authority’s requirements, particularly mandatory inspections

(b) The documents approving the work will include details of the mandatory inspections required by the PCA . As per Clause 2 (f) such inspections are to be arranged and paid for by the Owner. The Builder must advise the Owner when the works reach a stage where a mandatory inspection is required and the Builder must notify the PCA when the carrying out of such inspection is appropriate. If the Builder pays any such fee it will be a cost of the works and become payable as such. (c) The works will be deemed to comply with the requirements of any Authority upon the issuing, if applicable, of a certificate of compliance or similar document by the Authority. (d) The inspection and approval of work, by the PCA or by a person or party authorised to carry out any inspection required as part of the mandatory inspection process or terms of approval for the work, will satisfy Sub-Clause (c) . when the works reach the required stage and the Owner will be responsible for having any survey or inspection carried out within a reasonable time. (d) Subject to Sub-Clause 8(c) the Builder is to take such reasonable steps as may be required on the AMPLE 6. Termite Treatment and Maintenance – Residential Building Work Only (a) (i) The Owner acknowledges and understands that where a termite treatment system is installed, or forms part of the work, that the same has a limited working life and requires ongoing maintenance and servicing. The Owner further acknowledges and accepts that any such system is a management scheme and that termites are a peculiar 7.

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Builder’s part to allow inspection of the works on behalf of the Lending Authority. (e) The Owner is responsible for all payments to the Builder . The Owner carries the risk of the Lending Authority delaying or failing to make any payment necessary to satisfy the contract. Possession of the Site, Access and Site Meetings (a) (i) The Builder is to have exclusive and uninterrupted possession of and access to the site for the performance of work. The possession to be given to the Builder includes access to other parts of the property necessary to enable the Builder to carry out work. (ii) If access is required to any other property in order for the works to be carried out it will be the responsibility of the Owner to do or authorise any actions necessary to gain such access. (b) The Owner acknowledges that the site is a work site which, by reason of the work to be undertaken, can be a dangerous place. As such the Owner will comply with any direction of the Builder concerning site access and movement around the site. (c) The Owner or a duly appointed representative or an authorised officer of the Lending Authority may have access to the site for the purpose of inspecting and viewing the progress of the works but only with the consent of the Builder . Access to the site by the Owner without Builder supervision and permission is not allowed . Site Meetings are Strongly Recommended (d) The Owner or a person authorised by the Owner to provide instructions to the Builder concerning the works is to be available to attend on site at times nominated in any construction program provided by the Builder or otherwise at mutually agreed times. The parties agree to use any such meetings to discuss and resolve issues relating to the works. The Builder may record minutes of any meetings and will provide a copy of any such minutes to the Owner . (e) Neither the Owner nor any duly appointed representative will give or be entitled to give at any time directions to the Builder’s workers or Trade Contractors relating to the works or any part thereof. Any instructions concerning the works which are to be in writing and are to be provided directly to the Builder . 8.

extension of time. Refer to Clause 11 (a)(xii) page 20 . (c) If any material specified to be used in the works cannot be obtained or can only be obtained with an unreasonable period of delay, the Builder will seek instructions concerning substitutes to be used. Any price difference will be deemed to be a variation pursuant to Clause 14. Refer to Clause 14 . (d) The Builder is entitled to rely on the Owner’s warranty that any materials supplied by or specified to be used by the Owner are fit for the purpose for which the Builder is directed or required to use such materials. (e) Any demolition material which the Owner wishes to keep must be detailed at Item (k) of Schedule 2 . Otherwise all demolition material will become the property of the Builder . 10. Date for Commencement of and Time for Completion of Work (a) The Builder will commence the works: (i) on the date specified in item (c) Schedule 2 ; or (ii) within fifteen (15) days after the Owner’s compliance with Clause 2 ; whichever is the later. (b) The Builder is to proceed with due diligence and bring the works to Practical Completion within the construction period. The construction period and consequently the date by which practical completion is to be achieved are subject to change under Clause 11 . Refer to Clause 11 . (c) During the execution of the works the Builder will, in response to a written request from the Owner , provide a written estimate of the time required to reach Practical Completion. This estimated date is subject to change pursuant to Clause 11 and is to be based upon the Builder’s knowledge of the works as at the time of the request. (d) If any materials are supplied by or specifically directed to be used by the Owner , the Owner warrants that the same are fit for the purpose for which the Builder is directed to use such materials. (e) Compensation maybe payable by Builder (i) If the Builder fails to bring the works to Practical Completion by the Date for Practical Completion calculating in accordance with Schedule 2 point (c)(i) , extended as provided for in Clause 11 , then the Builder is to pay or allow to the Owner by way of agreed pre-estimated general and liquidated damages, some calculated at the rate stated in Schedule 2 point (i)(i) . (ii) This amount will be applied to the period from the day after the Date for Practical Completion under the contract until the date Practical Completion has been achieved in accordance with Clause 20 . (iii) Any amount payable under this clause cannot

9. Quality and Availability of Materials (a) The Builder will obtain and use materials which comply with the requirements of this Contract. (b) The Builder is entitled to rely on materials required to carry out the work being readily available. If, for reasons beyond the control of the Builder , materials are difficult to obtain or delay will be experienced because the material required is difficult to obtain or unavailable, then the Builder is entitled to an be deducted from any payment until such time is the actual date of Practical Completion has been determined. AMPLE

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(iv) If “nil” is inserted or no amount is specified at Schedule 2 point (i)(a) then it is agreed that no damages are payable in relation to the time to complete the works. Any amount inserted must reflect the actual cost of the delay to the Owner . 11. Delays and Extensions of Time (a) Should the progress of the works be delayed by any of the following causes or conditions resulting from them: (i) variations; (ii) suspension of the works under Clause 19 ; (iii) latent conditions affecting the site, the ability to carry out work or requiring work; (iv) proceedings taken or threatened by, or disputes with adjoining or neighbouring Owner s or residents; (v) any act, default, delay or omission on the part of the Owner including, but not limited to, providing instructions, making payment or doing a thing necessary to allow the works to proceed including signing instructions concerning variations; (vi) delay in having a mandatory inspection carried out by the PCA or an authorised person; (vii) an instruction by the Owner to stop the works; (viii) delay due to an insurance claim by the Owner or the Builder , or due to works resulting from such an insurance claim; (ix) civil commotion or industrial dispute affecting any of the trades employed upon the works or the manufacture or supply of materials for the works; (x) inclement weather or the affect of weather on site access or site safety; (xi) delay by any local or other authority in granting any necessary consent or approval where the word “authority” is taken to include the PCA or any party authorised or allowed to carry out a mandatory inspection; (xii) any other cause, thing or matter beyond the reasonable control of the Builder such as industry wide trade or material shortages, which affect the Builder’s ability to do the work; (xiii) attending training or education programs or professional development, occupational health and safety or a matter relevant to the Builder’s licence, then in any such case the Builder must receive a fair and reasonable extension of time to the Construction Period. Builder to Advise of Matters Causing Delay (b) (i) The Builder must notify the Owner in writing of any matters which cause delay, within a reasonable time of becoming aware of their occurrence, together with an extension of time to the Construction Period, if it is known. (ii) If the period of delay referred to in Sub-clause (i) is not known at the time of that notice then the Builder shall issue a further notice after the period

of delay is determined stating the extension of time to the Construction Period . (c) Should the Owner not dissent in writing from the notification in Sub-clause (b) within five (5) days , the Construction Period will be extended by the period claimed in the notification under Sub-Clause (b) . (d) Delay in notifying or a failure to notify the Owner of a delay or matter causing delay will not of itself prohibit an extension of time being granted or allowed provided the cause of the delay is shown to cause delay to the works being carried out. (e) The Builder must use its best endeavours to minimise any delay. (f) If the delay results from any of the matters or consequences of the matters in paragraphs (i), (ii), (iv), (v) or (vii) of Sub-Clause 11(a) , then the Cost of Works are to be adjusted to include an amount calculated to cover the cost or expense of the delay incurred by the Builder . Variation delays are adjusted pursuant to Clause 14 . The amount payable will be determined with reference to Schedule 2 point (i)(ii) . In addition any actual cost incurred by or payable by the Builder because of the delay which in total exceed the amount payable with reference to the period of delay and the amount stated at Schedule 2 point (i)(ii) , to the extent of the difference, will also be payable by the Owner . If no amount is specified in Schedule 2 point (i)(ii) then the actual cost of the delay will be payable, if claimed by the Builder . (g) Delays due to occupational health and safety issues concerning work site access, work site conditions and the ability to work safely will enable the Builder to claim additional time and will alter the Construction Period. 12. Compliance with the Requirements of Local and Other Authorities (a) (i) The Builder is to comply with and give all notices required by an Act of Parliament or by any regulation or by-law of any local authority or of any public service company or authority which has jurisdiction over the works or with whose systems the same are or will be connected, to the extent applicable to the contract works. (ii) Any fees or negotiated charges legally demandable under an Act of Parliament, regulation or by-law in respect of the works, or any taxes that take effect after the date of the Contract whether payable directly or indirectly, will be a cost of the works and payable as such. (iii) Any amount payable for mandatory inspection, inspections by a lending authority or any inspections which the Owner may request be done will be a cost of the works unless the Owner pays the same directly. Written Notice of Need to Alter Proposed Work or Processes

events conducted by a Registered Training Organisation and which address continuing (b) The Builder , before making any variation from the Contract Drawings or Specification necessary for compliance with Sub-Clause (a)(i) , is to give to the AMPLE

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