STAGE 4 RESTRICTIONS AND THE IMPACT ON THE BUILDING INDUSTRY

Whether you’re a builder, a tradesperson or operate a garden maintenance business, Stage Four restrictions in metropolitan Melbourne have had a huge impact on those that operate within the building industry. The restrictions have not only affected trades and suppliers, but homeowners who have had the completion of their new home delayed or renovation works suspended to comply with the Victorian Government’s restrictions.

Whilst we know the impact on the construction industry will continue to change as we travel along the road map out of Stage Four restrictions, we thought we would highlight some of the current issues for our clients.

Five workers on site

The implementation of five workers and one supervisor on small scale construction sites has been problematic for builders in the residential space. For many, the limit has made completing projects within the building period unachievable and triggered concerns about what rights owners have to claim liquidated damages as a result of builders not being able to complete the works on time.  

Furthermore, many builders have found it impractical to commence building projects with only five people on site due to the nature of the work. The recent changes that permit more than five workers on site (where it is not practical to have five) before base stage and after fixing stage on small scale construction sites, has been welcomed by the industry. However, as builders still need to be mindful to keep the number of workers on site as low as possible, it is only a small relief. The restriction of five workers on site has also been further complicated by the ever-growing list of specialist trades being limited to three sites per week. Meaning the task force at times has been further limited.

Renovations

The restrictions on renovation projects has been problematic for builders, with current restrictions on occupied properties likely to remain until 26 October 2020. Many owners are in the unfortunate position of having to live with incomplete renovations whilst in lockdown. This is of concern to the building industry as residential works make up a large portion of building works in Victoria. Many builders continue to face the predicament of having to wait until the government lifts restrictions on occupied properties.

There has been some suggestion that restrictions to works which are external, such as external renovation works or landscaping works, should be eased prior to 26 October 2020. We will continue to monitor the situation around any easing of restrictions to renovation works.

Signing contracts

Many owners and builders have faced challenges around locking in projects due to impracticalities of not being able to sign contracts in person. While some have adapted to electronic signing, others have had to delay the signing of contracts until the restrictions are eased so that they can finalise product selections prior to signing the contract. This has been an obstacle for many within the industry who are unable to finalise contracts and are in hope of recommencing works as soon as permitted.

For many builders in metropolitan Melbourne, Stage Four restrictions have meant that display homes and colour showrooms are closed. Which makes the finalisation of a building contract near to impossible (especially for the small to medium builders who may not have facilities for virtual online tours). The HIA recently reported that the effects of lost sales are being felt with new home sales in Victoria declining by 14.4% in August.

While there is still some ambiguity about what lies ahead, we hope to see many of the restrictions that impede our industry lifted, so that workers can continue to be employed and businesses can continue to work with homeowners to complete current and future projects.

At Spectrum Lawyers, we will continue to keep abreast of the continual changes relating to the building industry and the impact of these changes on our clients.

Chat to us if you’d like to learn more.

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