Terminating a An agreement that the law will enforce. is a serious matter. Consumers should obtain legal advice before terminating a contract. Most contracts provide a procedure for The end of something. Contracts terminate when the parties have done what they agreed. A contract can also be terminated without being completed, for example if one party breaks the contract, or it is impossible to carry out. that must be strictly followed. Normally the procedure requires the Under the Australian Consumer Law, a person who buys goods or services for less than $40 000 or for personal or home use. to notify the builder in writing of breaches of the contract and require the builder to remedy the breaches within a certain period of time. If the breaches are not remedied within that period of time the consumer is then required to deliver a second notice terminating the contract.
A consumer who fails to strictly follow the contractual procedures for the termination of a contract may later be found to have wrongfully terminated the contract and be liable for A court order for money to be paid to someone to compensate them for a loss suffered as a result of a civil wrong or breach of contract. For example, a person who caused a serious permanent injury to another person can be ordered by the court to pay damages that compensate the injured person for their loss of income from being unable to work. See also aggravated damages; compensatory damages; general damages; liquidated damages; nominal damages; special damages. to the builder. For this reason, get legal advice before terminating a building contract (see Chapter 2.1: Legal representation).
All contracts entitle the builder to terminate the contract in certain circumstances.
Domestic Building Contracts A written law made by parliament. Also called an ‘Act of parliament’, ‘statute’ or legislation. 1995 (Vic)
Under section 41 of the DBC Act, a consumer may terminate a major domestic building contract if either the contract price rises by 15 per cent or more or the contract has not been completed within one-and-a-half times the period it was to have been completed in and the increased time or cost was not reasonably foreseeable by the builder at the time the contract was entered into.
Again, legal advice should be obtained if a consumer proposes to terminate a contract under these DBC Act provisions. For information about obtaining legal services, see Chapter 2.1: Legal representation.
Aluminium composite products (flammable cladding)
Since the fire in the Lacrosse building in Melbourne on 24 November 2014, aluminium composite products (ACP) have come under scrutiny. Many high-rise residential buildings in Melbourne are clad with ACP. Such cladding is highly flammable and may pose a risk to occupants in the event of a fire.
In July 2017, the Victorian Government established the Victorian Cladding Taskforce to investigate the extent of non-compliant external cladding on buildings in Victoria. Hundreds of buildings were identified as having non-compliant cladding, predominantly ACP.
In many cases, the building’s local council has issued a notice to the building’s owners and A body corporate created by registration of a plan of subdivision or a plan of strata or cluster subdivision. See also prescribed owners corporation. demanding that the non-compliant cladding be replaced.
The cost of replacing non-compliant cladding is significant. There are also the legal fees involved with recovering compensation from builders and consultants. These The amount charged by a lawyer for legal work. Lawyers can only charge the amount agreed with the client in a costs agreement or the amount stated by a court in its rules. The party who loses a case usually has to pay all their own costs plus most of the costs reasonably incurred by the other side. See also indemnity costs. and fees are causing financial hardship for many property owners in Victoria.
In 2020, the Victorian Government launched Cladding Safety Victoria. This is a $600 million program to replace the flammable cladding on up to 400 buildings in Victoria within two years.
For more information about Cladding Safety Victoria, and to check if your building is included in the program, see https://www.vic.gov.au/cladding-safety.