It is important to understand that the non-renewal of Projex Management & Construction Pty Ltd trading as Nicheliving (Nicheliving) registration as a building contractor does not void your contract.
This means that the building contract remains valid and subsisting.
While the contract is valid and subsisting, you may not do anything which is contrary to the contract, otherwise you risk being in breach of contract.
This includes doing things such as:
- engaging a new builder to complete Nicheliving’s unfinished work; or,
- supplying materials or performing any works on the site; or,
- taking possession of the site or demanding that Nicheliving provide you with the keys (although you may be entitled to access the site to inspect the progress of the works).
Breaching your building contract is a costly mistake which can lead to Nicheliving taking legal action and claiming damages against you.
To ensure that you avoid such a pitfall, you must urgently take the necessary steps to validly terminate your building contract before you engage a new builder.
Lodging a Home Indemnity Insurance Claim
According to the Home Building Contract Act 1991 (WA) (the Act), a policy of home indemnity insurance, such as those being underwritten by QBE Insurance (Australia) Limited, must come into effect if the builder’s registration as a building service contractor is cancelled or not renewed because the builder did not satisfy the financial requirements prescribed by the Building Services (Registration) Regulations 2011 (WA).
What is Covered by Home Indemnity Insurance?
The Act provides that, where a home indemnity insurance policy comes into effect, the policy must cover you for:
- loss or damage due to non-completion of work;
- loss of deposit; and,
- an inability to enforce a building remedy order if you cannot recover compensation from the builder.
In this case, the loss or damage suffered is the difference between the amount you will need to pay a replacement builder and what you had agreed to pay in your contract with Nicheliving.
For example, if you would have paid Nicheliving $200,000 to complete the construction, but a new builder at current market rates is going to charge a total of $250,000 to complete the construction, you may be entitled to lodge an insurance claim for the difference of $50,000.
According to the Act, you are entitled to claim $200,000 or the cost of the work (whichever is lesser).
Recommended Action
If you are in a contract with Nicheliving, to avoid the costly mistake of breaching your building contract, we strongly encourage you to urgently obtain fulsome legal advice on:
- how to properly terminate your building contract, including whether you are entitled to do so; and,
- what details you should include in your home indemnity insurance claim, and when you should lodge the claim.
Contact Us
Vogt Legal specialises in providing expert guidance on managing the many issues and complexities which arise from building contracts. Get in touch today for a free initial consultation.
This article/post is provided for general information purposes only and does not constitute any Legal Advice. It does not take into account your objectives, instructions or all of the relevant facts and/or circumstances. Will Vogt and Vogt Legal accept no responsibility to any persons who relies on the information provided on this website.
