Choosing the Best Construction Contract in QLD

When a body corporate undertakes renovation or repair work, selecting the right building contract is crucial to managing risks, ensuring compliance and protecting the interests of lot owners. Most of the contracts used in residential building projects are standard form contracts, such as those published by Australian Standards (e.g., AS 4000, AS 4902), the Master Builders Association (MBA) and the Housing Industry Association (HIA). While these contracts provide a useful framework, they are not tailored to body corporate projects and often require amendments to properly allocate risk and responsibilities.

Why standard form contracts matter

Standard form contracts attempt to achieve a balance between the interests of principals (such as a body corporate) and contractors. However, they are designed for general construction projects and may not account for the unique considerations of body corporate works, such as common property obligations, funding approvals and strata-specific legal requirements. Failing to select and amend an appropriate contract can expose the body corporate to unnecessary risks, disputes and financial losses.

Key considerations when selecting a contract

1. Project scope and complexity

Minor Repairs and Maintenance: Smaller-scale work, such as routine maintenance or minor repairs, may be covered under Minor Works, MBA or HIA contracts.
Major Renovations and Structural Work: More comprehensive contracts like AS 4000 (construct-only) or AS 4902 (design and construct) may be appropriate for larger projects.

2. Risk allocation

Construction contracts allocate risks such as delays, cost variations and defects. Without careful amendments, a body corporate could bear excessive risks, particularly in:

Extensions of time and delay damages
Defective work liability
Insurance and indemnities
Dispute resolution processes

3. Compliance with Laws and Regulations

Most standard contracts do not reflect current legislation, such as:

Security of Payment Laws – Ensuring that payment terms align with statutory requirements of approval processes.
Workplace Health & Safety – Addressing responsibilities for common property.
GST and PPSA Laws – Ensuring proper risk apportionment and security.

Managing access requirements to avoid delays

For projects involving common property or exclusive-use areas, it is critical to manage access requirements effectively to prevent unnecessary delays and additional costs. Under section 163 of the Body Corporate and Community Management Act 1997 (Qld), notices must be provided to lot owners before access is granted. Standard form contracts often do not account for this requirement, meaning amendments may be necessary to clarify the contractor’s obligations in scheduling work around occupiers and ensuring proper notice is given.

Without careful planning, contractors may face delays in accessing work areas, leading to claims for extensions of time and additional costs. Contracts should include provisions requiring contractors to coordinate with the body corporate and provide advanced work schedules to facilitate smooth access arrangements.

Why early contract reviews are essential

Reviewing and amending contracts before they are signed helps bodies corporate:

Identify and mitigate key risks – Many standard contracts shift risk onto the party least able to manage it.
Ensure compliance with legal requirements – Standard contracts may not reflect recent legislative changes.
Simplify contract administration – Tailoring contracts to body corporate needs can reduce administrative burdens and streamline project management.

How we can help

Our construction law team assists bodies corporate with:

Selecting the most appropriate contract for renovation and repair projects.
Reviewing and amending standard form contracts to align with body corporate requirements.
Ensuring compliance with Queensland building laws and strata legislation.
Advising on contract administration and dispute resolution.

Engaging an experienced construction lawyer early in the process ensures that the contract properly protects the body corporate’s interests, minimises risks and promotes smooth project execution.

Written by Peter Waller, Special Counsel – QLS Accredited Specialist – Commercial Litigation and Brendan Pitman, Partner, Grace Lawyers

QLD Article