HIA Explained

The HIA agreement, or Housing Industry Association agreement, is the contract under which your project's construction will proceed. The HIA can be difficult to understand at times, so we have complied explanations for the clauses and the questions and answers to help guide and educate future clients on their rights and obligations. 

Check out Example HIA Contract that provide a clear and concise example of what an HIA contract looks like, helping you to understand the importance and structure of these agreements.

Note:This is a simplified example of a standard HIA contract. Actual contracts may include additional clauses and specific details tailored to individual projects. For more information and a detailed template.

Clause 3. The Building works

1. The builder must finish the building works according to the contract, and all relevant laws and statutory requirements.

Basic explanation of clause 3.1:This means CGFB must follow the terms of the HIA, the ACT laws and requirements for the work done on site by the builder.

Customer Question and Answers about clause 3.1:

2. Special conditions of contract are listed in Schedule 2.

Access to the building site by the owners and associated visitors will require a written request and authorisation by the builder including a site induction after the stage that site fencing has been installed.

Access to the site by any external contractors will require a written request and authorisation by the builder including a site induction after the stage that site fencing has been installed. Contractors will also be required to provide a copy of public liability insurance and white cards for all workers who intend to access the site.

Owners will be responsible to inform their home and contents insurer of the work to be completed on the property. At the stage the project is handed over/completed owners are responsible to inform their insurer the work is complete.

This agreement is to be read in conjunction with the Customer Project Proposal, signed date......

Basic explanation of clause 3.2: The special conditions listed in the HIA include authorised access to the building site, external contractors need authorised access to the site after fencing, and that the owners will be responsible for informing CGFB of the work to be done, and to inform their insurer that the work is complete. 

Customer Question and Answers about clause 3.2:

3. Items excluded from the contract are listed in Schedule 3.

The owner acknowledges that the builder will not be responsible for the supply and installation of materials, goods or the provision of services that are listed below. Nor will the builder be responsible for the rectification of any defective or unfinished work of the owner.

Removal and associated costs of any asbestos containing material that is not reasonably visible during the preparation and planning process, that is found during site work.

Removal of any tree stumps, waste or other contamination that is not reasonably visible before the preparation and planning process, that is found during site work.

Upgrades to existing property infrastructure that is not included in the project proposal Unless detailed in the Customer Project Proposal

Security of pets from entering the fenced site area.

Excavation in rock has not been included.

Basic explanation of clause 3.3: CGFB does not cover any removal or other costs of asbestos found during site work but was not reasonably visible before site work began. Similarly, any tree stumps, waste or other contamination that was not reasonably visible before the site work began is not covered. Excavation of rocks and ensuring security of pets in the fenced site area is not covered. 

Customer Question and Answers about clause 3.3:

Clause 4. Essential Information

1. The owner must give the following essential information to the builder within 90 days after the contract is signed:

(a) details of any easements, covenants, encumbrances and caveats affecting the land; and
(b) written proof that the owner owns the land (eg a certificate of title or a rates notice) or is otherwise entitled to build on the land; and
(c) written proof that the owner can pay the builder (eg a letter from a lending authority); and
(d) written proof that any loan has been approved by the lending authority, and that any mortgage papers have been signed; or
(e) evidence of funds held in a bank account, term deposit, etc. if a lending authority is not being used; and
(f) all necessary building and planning approvals, unless the builder obtains them under Clause 7; and
(g) proof that all other statutory obligations of the owner are satisfied.

Basic explanation of clause 4.1: Information required for the building process must be provided to CGFB within 90 working days after the contract is signed. 

Customer Question and Answers about clause 4.1:

2. If the owner does not give the builder all essential information under Clause 4(1) within 90 days after the contract is signed the builder may give the owner a written notice to end the contract and in which case the builder is entitled to retain the deposit or an amount calculated in accordance with Clause 25.8, whichever is the greater.

Customer Question and Answers about clause 4.2:

Clause 5. When the builder must start

Unless the parties otherwise agree in writing, the builder must commence the building works within 15 days of receiving all of the essential information in Clause 4.

Customer Question and Answers about clause 5:

Clause 6. When the builder must finish

1. The building works must reach the stage of practical completion by the completion time.

Customer Question and Answers about clause 6.1:

2. The completion time may be extended in certain circumstances (see Clause 22).

Basic explanation of clause 6.2: Completion time refers to the time for practical completion. The building work completion time is no more than 160 working days after commencement, unless circumstances cause time delays.  

Customer Question and Answers about clause 6.2:

Clause 7. Planning and building approvals

1. The person identified in Item 8 of Schedule 1 will obtain and pay for all planning and building approvals.

Customer Question and Answers about clause 7.1:

2. If the builder is named in Item 8 of Schedule 1, the owner agrees to sign all documents and do all acts as requested by the builder to enable the builder to obtain all necessary permissions, consents and authorities on behalf of the owner.

Basic explanation of clause 7.2: The builder agrees to authorise CGFB to obtain necessary information required for the project. 

3. The person identified in Item 8 of Schedule 1 must obtain all approvals within 90 days of signing the contract.

Basic explanation of clause 7.3: Planning and building approval must be obtained by CGFB within 90 working days.  

Clause 8. Documentation and copyright

1. The owner indemnifies the builder for any claim for breach of copyright or moral rights, if the builder carries out the building work according to plans which are:
(a) supplied by the owner;
(b) prepared under the instruction of the owner; or
(c) prepared from sketches supplied by the owner.

Basic explanation of clause 8.1: If another company’s plans are used in violation of their copyright of the plans, the owner owes compensation to CGFB.  

Customer Question and Answers about clause 8.1:

2. The builder owns the copyright in any documents prepared by the builder.

Customer Question and Answers about clause 8.2:

Clause 9. The contract price

1. The owner must pay the builder the contract price in the manner stated elsewhere in the contract (see Clauses 12 and 23).

Deposit
Should not exceed $10,000
Adjusted by $1.00 to allow for rounding

Planning Approvals Submitted
Planning approval plans and documents have been submitted for planning approval

Floor System Complete
Structural floor system is complete with services to floor level

Wall and Roof Frames Complete
Wall and roof frames are complete and braced

Close Up Complete
The building is lockable and watertight. Windows, wall cladding, roof coverings, eaves and external doors are installed. Excludes garage doors

Fixings Complete
Interior doors and trims are complete. Excludes joinery cabinets.

Painting Complete
Interior and exterior painting is complete.

Project Completion
Project walk through has been conducted and owners have signed off on their satisfaction with the project

Total

Basic explanation of clause 9.1: Clause 9 refers to the progress payments outlined in Schedule 1 of your HIA. 

Customer Question and Answers about clause 9.1:

2. The contract price may vary (see Clauses 12.3, 13, 17, 18, 19, 21 and 22).

Basic explanation of clause 9.2: Contract price may change dependent on interest arising from non-payment, if the price of prime cost items, 

Customer Question and Answers about clause 9.2:

3. If there is more than one owner, the obligations in the contract apply to each of them individually and to all of them as a group.

Basic explanation of clause 9.3: The owners are responsible for executing the contract, both individually (i.e. both signing required forms) and as a group (i.e. making payment) 

Customer Question and Answers about clause 9.3:

Clause 10. Security of money

Unless otherwise agreed, the owner must deposit that part of the contract price not supplied by the lending authority, into a separate bank account in the name of the owner. The owner and the builder must be joint signatories to this account.

Basic explanation of clause 10: This money is effectively trust money which acts as a security measure to protect CGFB against loss in the event of bankruptcy of the owner.  

Customer Question and Answers about clause 10:

Clause 11. Deposit

The owner must pay the builder the deposit set out in Item 13 of Schedule 1, at the time when the contract is signed.

Basic explanation of clause 11: The set deposit in the contract (no more than $10,000) is due for payment once the contract has been signed.

Clause 12. Progress payments

1. The builder must give the owner a written claim for each progress payment at each stage set out in Item 13 of Schedule 1.

Basic explanation of clause 12.1: The progress payments will be issued as invoices and due when issued. 

Customer Question and Answers about clause 12.1: 

2. The owner must make progress payments on completion of each of the stages set out in Item 13 of Schedule 1. Payment must be made within 5 days after receiving a progress claim from the builder.

Basic explanation of clause 12.2: Payments for the progress payments are due 5 working days after being issued. 

3. If the owner does not make a progress payment or any payment after it becomes due, the builder is entitled:
(a) to interest on the unpaid amount, at the rate set out in Item 11 of Schedule 1. This is calculated from the date when the payment was due until the date when the payment is made; and
(b) to suspend the building works in accordance with the suspension of the building works under Clause 24. The builder must notify the owner in writing of the intention to suspend the building works due to non-payment of a progress payment claim. The builder is to recommence the building works within a reasonable time after the owner has given the builder written notice that the outstanding amount has been paid in full.

Basic explanation of clause 12.3: Interest begins accumulating 5 days after issuance at a rate of 14%. CGFB retains the right to notify of suspension of building works based on non-payment until the amount, including interest has been paid in full.

Clause 13. Survey of the site

1. If the boundaries of the land, the location of the site or the siting of the building works are unclear, the builder must write to the owner asking the owner to arrange and pay for a survey.

Basic explanation of clause 13.1: Should the site's location, boundary of land or site is unclear, the builder must ask the owner to arrange the survey and pay costs.  

Customer Question and Answers about clause 13.1:

2. If the owner does not engage a surveyor within 5 days after receiving the letter, the builder may do so. If the builder engages a surveyor, this is deemed a variation to the contract (see Clause 21).

Basic explanation of clause 13.2: If CGFB engages in a survey cost that is the responsibility of the owner to acquire, the cost of the contract will change to reflect that cost and the difference applied to the next progress payment.

Clause 14. Access to the site

1. The owner gives the builder exclusive access to and possession of the site to carry out the building works.

2. The builder has the owner's authority to allow or refuse anyone access, and may order unauthorised people from the site.

3. The owner and any authorised officer of the lending authority, may go on to the site to inspect the work at a reasonable time during normal working hours, as long as it does not delay the progress of the building works.

4. The builder retains ownership of all supplied materials which are not used in the building works. The builder also owns all recovered and demolished material. The builder will remove all unused, recovered and demolished materials from the site.

Basic explanation of clause 14.2: Any materials left over after the project, including demolished materials belong to CGFB and it is CGFB’s responsibility to remove the materials from the site.

5. Where it is agreed that the owner will remain in residence in an existing building during the building works the owner:
(a) must give the builder free and uninterrupted access to the site;
(b) must secure any animals so that they do not interfere with, or prevent access to, the site; and
(c) is responsible for the care of all household items, floor coverings and fittings.

6. The owner and the owner's agents, contractors and invitees must comply with the builder's occupational health and safety requirements

Basic explanation of clause 14.6: People on the site, including the owner and their invitees, must follow CGFB health and safety requirements. 

Clause 15. Insurance and risk

1. The builder must insure for loss or damage to the building works by accident, theft, fire, explosion, lightning, hail, storm and tempest, vandalism, civil commotion and against personal injury, death, property loss or damage arising from the building works. If so requested by the owner, the insurance policy must note the names of the owner and the lending authority.

2. The builder must obtain public liability insurance in relation to the building works to a minimum cover of $5 million for any one claim.

3. The builder must show proof of these insurances if the owner so requests.

4. The builder must have workers' compensation insurance for the builder's own employees.

5. The builder is not responsible for any loss or liability arising from something done or not done by the owner. The builder is also not responsible for any loss or damage caused by war or terrorism.

6. Unless otherwise stated elsewhere in the contract, the builder is not responsible for:
(a) loss or damage to the owner's property or for property for which the owner is responsible that is left on the site;
(b) subject to paragraph(c) below, any defect, structural deficiency, settlement or deterioration in the existing building except to the extent that it is caused by the builder failing to take reasonable care in the carrying out of the building works;
(c) damage to ceilings in the existing building except to the extent that it is caused by the builder failing to take reasonable care in carrying out the building works, but then only to the extent of repairing and excluding any repainting;
(d) damage to paths, gardens, driveways, trees, lawns and other landscaping;
(e) the restoration of areas affected by the building works to their original condition.

Customer Question and Answers about clause 15.6:

7. The owner must:
(a) keep and maintain until the date of practical completion, a home and contents insurance policy which includes public liability cover over the existing building, the site and all of the owner's property on the land including cover against fire, burglary, storm and tempest; and
(b) before the builder commences the building works, notify the insurer of that insurance policy that the building works are to be carried out.

Customer Question and Answers about clause 15.7:

Clause 16. Guarantor(s)

1. The guarantor(s) guarantees that the owner, at the times agreed to in the contract, will punctually perform all obligations under the contract.

2. The guarantor(s) indemnifies the builder. This means that the guarantor(s) must pay back to the builder any money the builder pays out for loss or damage that:
(a) is caused by the owner not paying the guaranteed money on time;
or
(b) arises from legal action, claims, compensation costs or legal fees or expenses; or
(c) is caused by the owner not doing everything the owner promises to do under the contract.

3. This guarantee and indemnity continues until the builder receives all of this money.

Basic explanation of clause 16.2: There is no time limit on the payment being due until the money has been paid according to the contract. The terms of the contract continue until completion. 

4. If there is more than one guarantor the obligations in the contract apply to them individually and to all of them as a group.

5. This guarantee and indemnity shall not be discharged, released or otherwise affected by:
(a) a variation to the contract;
(b) waiver by the builder of any breach, failure or default of the owner; or
(c) anything which, under the law relating to sureties, would have such effect, but for this provision.

Basic explanation of clause 16.5: The contract and the rights and obligations conferred by the contract is not affected by cost variation or breaches that have been waived by the builder.  

Clause 17. Prime cost items

1. Prime costs are allowances for the supply only of goods included in the contract price. These are listed in Schedule 4. Each prime cost item must have the allowance listed next to it.

Basic explanation of clause 17.1: Prime goods are goods or materials that have not been selected and are unknown prior to entering into a contract. Therefore, the items listed under ‘prime goods’ may vary the contract price. So, if the cost of the goods is less than the contract set out, the cost owed will be lower. The same is true if the prime goods are higher cost than set out in the contract. See Clause 17(4) and 17(5). 

Customer Question and Answers about clause 17.1:

2. The owner must select such a prime cost item or an item required for a provisional sum item in sufficient time to ensure that there is no delay as required by the builder to the building works. If an item selected by the owner is unavailable and the owner fails to give timely directions regarding the selection of an alternative item, the builder may select a comparable alternative item.

Basic explanation of clause 17.2: The owner selects the prime cost items. If the owner does not select in a reasonable amount of time, or if the item is unavailable CGFB may select a comparable item as an alternate. 

3. The price of each prime cost item must be calculated separately.

4. If the actual cost is less than the prime cost item allowance, the difference is deducted from the contract price.

5. If the actual price is more than the prime cost item allowance, the total difference and the builder's margin applied to that difference is added to the contract price.

6. Payment for any adjustments to the contract price under this clause must be made at the next progress payment stage.

Clause 18. Provisional sums

1. Provisional sums are allowances included in the contract price for work including the supply and installation of goods and services which cannot be entirely foreseen, defined or detailed at the time of signing the contract. These are listed in Schedule 5. Each provisional sum item must have the allowance listed next to it.

Basic explanation of clause 18.1: CGFB does not provide any provisional sums to vary the contract price for supply and installation of goods and services. Provisions under clause 18 do not apply to HIAs from CGFB. 

2. The price of each provisional sum item must be calculated separately.

3. If the actual price is less than the provisional sum item allowance, the difference is deducted from the contract price.

4. If the actual price is more than the provisional sum item allowance, the total of the difference and the builder's margin applied to that difference is added to the contract price.

5. Payment for any adjustments to the contract price under this clause must be made at the next progress payment stage.

Clause 19. Goods and services supplied by the owner

1. The goods and services supplied by the owner stated in Schedule 3 must be suitable for inclusion into the building works and supplied or completed in the time reasonably nominated by the builder. If not, the builder may supply the goods or services and this is a deemed variation (see Clause 21).

Basic explanation of clause 19.1: If goods and services provided by the builder but are not suitable for the project or not supplied in a reasonable time, CGFB can vary the cost of the contract to cover this expense. 

Customer Question and Answers about clause 19.1:

2. The owner indemnifies the builder for loss or damage caused by:
(a) the owner's delay in supplying or completing the goods and services; and
(b) the goods and services supplied by the owner being unsuitable.

Basic explanation of clause 19.2: Any cost arising from loss or damage caused by a delay in supplying goods and services and those goods and services being unsuitable are payable to CGFB. 

Clause 20. Builder's employees or subcontractors

The owner or an authorised officer of the lending authority must not give directions to the builder's employees, subcontractors or suppliers without the builder's written consent. This applies on the site and anywhere else.

Clause 21. Variation to the building works

1. Deemed variations will be necessary if:
(a) statutory authorities require them;
(b) the law has changed since the date of the contract;
(c) there are differences or errors in the plans and specifications provided by the owner;
(d) the site needs to be surveyed (see Clause 13);
(e) the builder does not receive goods and services supplied by the owner on time (See Clause 19);
(f) the surface or sub-soil conditions of the land (including rock) or an existing building will not support or is likely to affect the building works;
(g) specified materials become unavailable; or
(h) something happens that the builder could not reasonably have foreseen.

In each of these cases the price for the variation, including an amount for the builder's margin, is added to the contract price. Payment for the variation must be made at the next progress stage.

Basic explanation of clause 21.1: Clause 21 outlines how the contract price can vary both from occurrences that happen throughout the project (e.g. if the statutory authorities require a change) or if the owner wants to vary the scope of the project. In which case, both CGFB and the owner must sign an agreement authorising the variation to the project. CGFB retains the right to refuse a variation. 

2. The owner and the builder may agree in writing to vary the building works.

3. If the owner asks for a variation, the builder must reply in writing to the owner within 5 days of the request, or as soon as is reasonably practicable. The owner is, at the builder's election, to pay the administration fee stated in Item 14 of Schedule 1 for any variation requested by the owner.

4. The builder has the right to refuse a variation.

5. The builder and the owner must both agree in writing to the variation, its details and how much it will cost or save prior to commencement of the variation work.

6. The price or cost of the variation, as the case may be, is added to or deducted from the contract price. Payment for the variation must be made at the next progress payment stage (unless a different time is stated in the variation agreement). Any credit to the owner is to be made to the final progress claim.

Basic explanation of clause 21.6: Any change to the price as a result of variation must be done at the next payment stage.

Clause 22. Delays and extensions of time

1. The completion time will be extended if the building works are delayed because of:
(a) a variation;
(b) any suspension of the building works beyond the builder's control or under the contract;
(c) bad weather conditions that affect the building works;
(d) disputes with neighbouring owners or residents, or proceedings brought or threatened by them, that are out of the builder's control;
(e) civil commotion or industrial action affecting the work of sub- contractors, tradespeople, a manufacturer or a supplier of materials for the building works;
(f) anything done or not done by the owner;
(g) delays in getting any approvals that are out of the builder's control;
(h) the industry shutdown during the 25 day period beginning on or about 22 December each year;
(i) delay in the supply of materials selected by the owner;
(j) an "act of God", fire, earthquake or explosion;
(k) any discrepancy in the plans and specifications which is not the fault of the builder; or 
(l) the need for a survey of the site or the land.

Basic explanation of clause 22.1: Practical completion of the building works can be extended for a number of reasons, including but not limited to: poor weather conditions, disputes with owners, delays in approval from the ACT Planning department. In the case of extension CGFB must send a letter advising the owner of the change in completion date within 5 days of becoming aware of the issue. 

Customer Question and Answers about clause 22:

2. The builder must notify the owner in writing within 5 days of becoming aware that the building works will be delayed. The builder must set out in the notice the reasons for the delay and how much extra time is needed.

3. Except for the industry shutdown referred to in Clause 22.1(h), the builder shall be entitled to an increase in the contract price, but only if the delay results in an increase to the costs of the builder. The builder must include this amount in the next progress claim.

Clause 23. Practical completion

1. When the building works have reached the stage of practical completion, the builder must give the owner a notice of practical completion and the final progress claim.

Basic explanation of clause 23.1: Practical completion is the stage at which the project is complete except for minor omissions and could be issued a certificate of occupancy for the project. The notice of practical completion is typically given by CGFB through invoicing. 

2. Within 5 days, the owner and the builder must meet together to inspect the building works. The owner must give the builder a written and signed list of any work required by the contract which the owner claims is defective or unfinished and which is to be rectified or done for practical completion to be reached. If the owner fails to do so within 5 days, the owner must immediately pay the amount of the final progress claim.

Basic explanation of clause 23.2: Following walk through the owner must given written and signed notice about the defective or unfinished work that is needed to reach practical completion. If no notice is given within 5 days of the walkthrough the owner must pay the progress payment. 

3. The builder must promptly rectify the listed defective or unfinished work in accordance with the contract.

4. When the builder has rectified the listed defective or unfinished work necessary to reach the stage of practical completion, the builder must notify the owner. The owner must pay the final progress payment in full within 5 days of receiving the notice.

5. The owner must not take possession of the building works without the builder's consent until all outstanding money owed to the builder is paid.

Basic explanation of clause 23.5: The owner needs to wait until the builder has consented and all money paid to take possession of the building works. 

6. The owner may be entitled to liquidated damages if the building works are not finished by the completion time. These damages are calculated by the extra time taken to finish the work, at the rate set out in Item 12 of Schedule 1. If the rate set out is zero or nil, then the owner is not entitled to damages.

Basic explanation of clause 23.6: Should the project completion run beyond the set completion date without extension, then the owner is entitled to $1,750.00 per week calculated on a daily basis.

7. Within 65 days after the date of practical completion, the owner must provide the builder with a written list of the claimed defects if any, in the building works. The builder must within 15 days after the expiry of the 65 day period rectify the defects resulting from work or materials not being in accordance with the contract.

Basic explanation of clause 23.7: The owner must provide written notice of any defects within 65 days and CGFB must rectify the defects that are not in accordance with the contract in 15 working days. 

8. Where the builder is required to rectify claimed defects as notified by the owner, the owner must allow reasonable access to the property for these works to be completed. Access to the property will need to be provided at suitable times as reasonably required by the builder in order to rectify the defects

Clause 24. Suspending the building works

1. If the owner breaches the contract, the builder may suspend the building works by notifying the owner in writing. This right is additional to that in Clause 12.3.

Basic explanation of clause 24.1: Any violation of the contract by the owner entitles CGFB to suspend building work through notice in writing. Any suspension of the building works due to the owner breach constitutes an extension of completion time.  

2. If the owner corrects the breach within 5 days of the builder's notice, the building works must resume within a reasonable timeframe of the builder being notified of the owner's correction of the breach

Basic explanation of clause 24.2: If there has been a breach of the HIA by the owner and the breach is rectified in 5 days, the building works must resume within a reasonable time frame after the owner notifies CGFB that the breach has been fixed. 

Clause 25. Ending the contract

1. If the owner breaches the contract the builder may suspend the building works and must notify the owner of the breach in writing by certified mail or personal service.

2. The builder may end the contract if:
(a) 10 days have passed since the builder gave notice of the breach;
(b) the owner is still in breach of the contract; and
(c) the builder notifies the owner in writing by certified mail or personal service that the contract is at an end.

Basic explanation of clause 25.2:CGFB retains the right to terminate the contract if the owner has not responded to the breach within 10 days, if the owner is still in breach of the contract and CGFB gives notice through certified mail or personal service that the contract has been terminated. 

3. If the owner disputes the builder's notice before the contract is ended, the owner must notify the builder in writing by certified mail or personal service. The builder may suspend the building works and the dispute must be taken to dispute resolution (see Clause 26).

Basic explanation of clause 25.3: If the owner does not agree with the notice of breach before the termination of the contract, the owner must communicate this through certified mail or personal service. 

4. If the builder breaches the contract, the owner must notify the builder of the breach in writing by certified mail or personal service.

Basic explanation of clause 25.4:If CGFB breaches the contract, the notification by the owner must be sent through certified mail or personal service. 

5. The owner may end the contract if:
(a) 10 days have passed since the owner gave notice of the breach;
(b) the builder is still in breach of the contract; and
(c) the owner notifies the builder in writing by certified mail or personal service that the contract is at an end.

Basic explanation of clause 25.5: The owner retains the right to terminate the contract if CGFB has not responded to the breach within 10 days, if CGFB is still in breach of the contract and the owner gives notice through certified mail or personal service that the contract has been terminated. 

6. If the builder disputes the owner's notice before the contract is ended, the builder must notify the owner in writing by certified mail or personal service. The builder may suspend the building works and the dispute must be taken to dispute resolution (see Clause 26).

7. The owner or the builder may also end the contract by written agreement or by sending the other written notice by certified mail or personal service:
(a) if the other becomes bankrupt or goes into liquidation;
(b) if a deemed variation makes the contract price rise by more than 10 percent; or
(c) if planning or building approvals cannot be obtained within the time specified in Clause 7.

Basic explanation of clause 25.7:If the owner becomes bankrupt, variation of the contract increases the price by over 10% or if the building approvals cannot be obtained in the 90 working days after the signing of the contract, assuming no extension has been given, then the contract can be terminated through written agreement. 

8. If the contract is ended, then the owner must pay as a debt due and payable:
(a) the cost of the building works to date;
(b) the cost of any materials on the site or already ordered from suppliers;
(c) the cost of leaving the site;
(d) the builder's margin, applied to the total of (a) plus (b) plus (c);
(e) default interest on any unpaid monies under Clause 12.3(a); and
(f) all other costs and losses incurred by the builder as a consequence of this contract being ended.

Basic explanation of clause 25.8: If the contract is terminated for any reason, the owner must pay all amounts owing, including the losses incurred as a consequence of the contract being ended. 

9. Nothing in this Clause prejudices the right of a party to recover damages or exercise any other right or remedy against the other party for breach (including repudiatory breach) of contract.

Basic explanation of clause 25.9: Even if the owner pays the debt owed to CGFB, both parties are able to exercise any right to remedy breach of the contract. 

Clause 26. Dispute resolution

1. If there is a dispute between the owner and the builder, either one must promptly give the other written notice of the dispute.

Basic explanation of clause 23.1: If there is a dispute, written notice must be given. The dispute is subject to all relevant ACT laws and the owner and CGFB must meet within 7 working days to discuss the dispute 

Customer Question and Answers about clause 26.1:

2. Disputes must be resolved according to Territory laws that govern the resolution of building disputes.

3. The owner and the builder must meet within 7 days to discuss the matters in dispute and attempt to resolve them by negotiation, mediation or other agreed method.

Clause 27. Notices

1. A notice is received when delivered in person, transmitted by facsimile or sent by post and 2 days have passed after it is sent.

2. This does not include notices that must be sent by certified mail.

3. The owner and the builder must promptly notify each other if they change address.

Basic explanation of clause 27.2: If the owner changes address throughout the process of the project, they must let CGFB know of the change.

Clause 28. Assignment and sub-letting

1. The owner and the builder may only assign their rights and obligations under the contract, with the written agreement of the other.

Basic explanation of clause 28.1: Any variation of the contract that assigns rights and obligations must be done through written agreement.

2. The builder may sub-contract any part of the building works, but the builder remains responsible for all the building works.

Basic explanation of clause 28.2: CGFB is responsible for the building works, even if a part of the work has been done through a sub-contractor.

Clause 29. Manufacturer's warranty

The builder is not responsible for defective goods or services covered by manufacturer's or supplier's warranty.

Basic explanation of clause 29: Defective goods that are covered by the manufacturer's or suppliers' warranty are not the responsibility of CGFB.

Clause 30. Security over site

1. The owner charges the land constituting the site with the due payment to the builder of all monies that will and/or may become payable under the contract or otherwise in connection with carrying out the building works.

Basic explanation of clause 30.1: CGFB has a legal ‘interest’ in the property. The land that the site is on acts as security for the money that CGFB is entitled to under the HIA. 

2. The owner irrevocably authorises and consents to the builder lodging a caveat in respect of the land consituting the site to protect the builder's interest and the charge created under the contract.

Basic explanation of clause 30.2: CGFB retains the right to lodge a caveat on the property should there be issues with the money owed. This means that the property cannot be sold or rented during this period. 

Clause 31. General

1. Except as provided at law or in equity or elsewhere in the contract, none of the provisions of the contract may be varied, waived, discharged or released, except with the prior written consent of the parties.

Basic explanation of clause 31.1: All the terms of the contract are valid and cannot be changed unless there is the written consent of both parties. 

2. Any provision in the contract which is illegal, void or unenforceable will be ineffective to the extent only of such illegality, voidness or unenforceability and will not invalidate any other provision of the contract.

Basic explanation of clause 31.2: Should a term of the contract be illegal or void, this does not mean that the whole contract is void, just the part that is unenforcable. 

Customer Question and Answers about clause 31.2:

Question and Answers related to Housing Industry Association (HIA) building agreements and Building Contracts in the ACT