No amendments will be made to any of the conditions in this Building Agreement

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1 No amendments will be made to any of the conditions in this Building Agreement RESIDENTIAL BUILDING AGREEMENT BETWEEN: MASTERTON HOMES PTY LIMITED Builder s Licence 35558C 76 Heathcote Road, Moorebank NSW 2170 (Builder) AND: (Owner) CONTRACT PRICE: $ (GST Inclusive) HOME BUILDING ACT WARNING AS TO MATTERS WHICH MAY CHANGE THE CONTRACT PRICE: The contract price stated above is the amount payable based upon the work to be done under the contract as at the date of the contract. If the work under the contract changes then the contract price may change. When the work is done it will also affect the contract price. The following provisions of the contract will, or may in appropriate circumstances, change the contract work and/or the contract price. Clause 3 Owner instructions; 5 Commencement date increase in cost of labour and materials; 10 Relevant materials unavailable; 12 Variations to the contract works; 13 Statutory requirements change post contract; 14 Special works; 15 Demolition and site conditions; 23 Suspension of works; 26(iv) & 8 Interest for late final payment; 31 Provisional allowances; 34 GST adjustments due to changes in the contract work.

2 ITEM THE TERM MEANING OF TERM 1. THE BUILDER MASTERTON HOMES PTY LIMITED (ACN ) Builder s Licence No C 2. THE OWNER Full Name/s Address 3. THE BUILDING WORKS 76 Heathcote Road, Moorebank, NSW THE LAND Full Address 5. CONTRACT PRICE (GST inclusive) 6 DEPOSIT $ The Contract Price is payable by way of progress payments and in accordance with Clause 6. $ (Must not exceed 5%) 7. BUILDING LOAN $ 8. FINANCE PROVIDER 9. OWNER'S CONTRIBUTION 10. CONTRACT DOCUMENTS 11. COMMENCEMENT DATE 12. CONSTRUCTION PERIOD 13. HOME WARRANTY INSURANCE $ This Contract comprises of: The Plans and Specifications, Colour Sheets, original Tender and all variations including the Final Tender. Within twenty (20) days of the Owner complying with all of the preconditions contained in Clause 5. weeks from commencement date subject to any extension of time to which the Builder may be entitled under Clause 18. A copy of the Home Warranty Insurance Certificate is to be attached to Builder s contract and the original provided to the Owner. SCHEDULE OF PROGRESS PAYMENTS (1 August 2007) 2

3 INDEX ATTACHMENT A DEFINITIONS 1. Builders Obligations 2. Owner s Obligations 3. Plans & Specifications 4. Copyright 5. Commencement Date 6. Payment of Contract Price & Possession 7. Contract Price Adjustment 8. Interest on Late Payment 9. Practical Completion 10. Provision of Labour & Materials by the Builder 11. Provision of Labour and Materials by the Owner 12. Variations 13. Compliance with the Requirements of Local Government and Other Authorities 14. Special Works 15. Demolition and Site Conditions 16. Builder s Insurance 17. Risk 18. Delays 19. Quality of construction 20. Statutory Warranties for Residential Building Work 21. Defects Liability Period 22. Owner s Maintenance Obligation after Practical Completion 23. Suspension of Works 24. Termination by the Builder 25. Termination by the Owner 26. The Builder s interest in the Land 27. Possession of the Site and Access 28. Termite Treatment and Maintenance 29. Waiver by the Builder 30. General 31. Provisional Allowances 32. Notices 33. Dispute Resolution 34. Goods & Services Tax 35. Severance 36. Guarantee GUARANTEE DEED OF GUARANTEE AND INDEMNITY ATTACHMENT B SIGNATURES (1 August 2007) 3

4 ATTACHMENT A CHECKLIST FOR OWNERS ENTERING BUILDING CONTRACTS Checklist 1. Does the Builder hold a current contractor licence? Yes No 2. Does the licence cover the type of work included in the contract? Yes No 3. Is the name and number of the Builder s licence the same as on the contract? Yes No 4. Is the work to be undertaken covered in the contract, drawings or specifications? Yes No 5. Is the contract price clearly stated? Yes No 6. If not, is there a warning that the contract price is not known? Yes No 7. If the contract price may be varied, is there a warning and an explanation about how it may be varied? Yes No 8. Are you aware of the cooling off provisions relating to the contract? Yes No 9. Is the deposit within the legal limit? The limit is 10% of work costing $20,000 or 5% for work costing more than $20,000. Yes No 10. Is the procedure for variations understood? Yes No 11. Are you aware of who is to obtain any council or other approval for the work? Yes No 12. Do you understand that the Builder must have a policy of Home Warranty Insurance under the Home Building Act 1989 and provide you with a certificate of insurance before receiving any money under the contract (including deposit) or before doing any work for more than $12,000? Yes No 13. Has the Builder given you a document that explains the operation of the Home Building Act 1989 and the procedures for the resolution of contract and insurance disputes? Yes No Signatures Do not sign this contract unless you have read and understand the clauses as well as the notes and explanations contained in this document. If you have answered no to any question in the checklist, you may not be ready to sign the contract. Both the Builder and the Owner should retain an identical signed copy of this contract including the drawings, specifications and other attached documents. Make sure that you initial all attached documents and any amendments or deletions to the contract. 3. Signed copy of contract Under the Home Building Act 1989 a signed copy of the contract must be given to the Owner within five (5) working days after the contract is entered into. 4. Home Warranty Insurance The Builder must provide the Owner with a certificate of Home Warranty Insurance (for work over $12,000) before commencement of work and before demanding or receiving any payment. 5. Owner s acknowledgement I/we have been given a copy of the Consumer Building Brochure and I/we have read and understand it. I/we have completed the check list and answered Yes to all items on it. Note: Where the Owner is a company or partnership or the contract is to be signed by an authorised agent of the Owner, the capacity of the person signing the contract, eg director, must be indicated. Signature Signature.. Name [print] Capacity [print]. Name [print]. Capacity [print]. (1 August 2007) 4

5 Definitions in this contract: Act means the Home Building Act (NSW), Builder means the party named in Item 1 and, where appropriate, includes a representative appointed by the Builder; Builder s margin means 25%; building works or work/s means building works to be carried out, completed and handed over to the Owner in accordance with this contract as shown in the contract documents and including variations. Building works will be deemed to have commenced upon the Builder s commencement of carrying out the Builder s obligations under the contract including administrative work and any other work required to activate commencement of the building works on site; contract means the agreement between the Builder and the Owner set out in the contract documents; contract documents means these general conditions, any special conditions, the plans, the specifications, the original tender and variations or amendments to the tender, colour selection sheets; contract period means the number of calendar weeks or working days stated in Item 12 as extended by Clause 18; contract price means the amount stated in Item 5 as changed by this contract; contract price adjustment means an amount that is added to or deducted from the contract price under this contract; date of practical completion means the date that is deemed to be the date of practical completion under Clause 9 except where the date is determined by a dispute resolution (including litigation) then it is that date; days means days other than Saturdays, Sundays or public holidays; defects liability period means the period commencing upon practical completion of the building works and continuing for twenty-six (26) weeks; finance provider means any corporation or institution that lends to the Owner part of or the whole of the contract price; inclement weather means any weather condition that, in the reasonable opinion of the Builder, prevents work from being carried out in the usual manner; industry shutdown period means a period of five (5) weeks commencing on or about the 22 December in each year; Owner means the party named in Item 2; practical completion means when the building works are complete and fit for occupation except for minor omissions and defects that do not prevent the building works from being reasonably capable of being used for their usual purpose. It does not relate to any work required to be completed by the Owner as a condition of the Development Consent. prime cost items includes items such as stove; cooktop; range hood; hot water service; alarm; air conditioning; remote control to the garage and carpet; provisional allowance means the amount of money included in the contract price as an allowance to cover works in respect of which full information is not available as at the date of the contract; rock means material, other than clay or soil, that cannot, in the Builder s opinion, be readily removed by hand; site means the land described in Item 4; statutory or other authority means the Local Government, State or Federal Government, or any Government agency that has power to affect the building works; variation means: an omission, addition or change to the building works; or a change in the manner of carrying out the building works; and like words having corresponding meanings. In this contract the general notes, the table of contents, clause headings and side notes do not form part of this contract and cannot be used in its interpretation. (1 August 2007) 5

6 1. Builder s Obligations In consideration of the contract price, the Builder hereby agrees to execute and complete the building works in a diligent and workmanlike manner and in accordance with this contract. The building works shall be carried out by or under the control of the Builder and once complete the Builder shall remove all its surplus material, equipment and rubbish from and off the site. 2. Owner s Obligations The Owner must pay the contract price and any other moneys that become payable under this contract in the manner and at the times stated in this contract. If there is more than one Owner: the obligations in this contract apply to each of them individually and to all of them as a group; a quote, notice, claim or any other communication to the Owner has only to be given to one of the Owners; and only one of the Owners has to sign a quote, notice, instruction, direction or other communication to bind all of the Owners; 3. Plans and Specifications Where the Owner supplies any contract documents, including any design plan, surveys or other documents to be used, the Owner warrants that the contract documents are accurate. The Owner also warrants the suitability of documents as specified. If either party becomes aware of any error, ambiguity or inconsistency in or between the contract documents, that party must within two (2) days of becoming aware, give the other party written notice detailing the problem. The Owner must, within two (2) days of receiving a notice or becoming aware of a problem, give the Builder written instructions as to how the Builder is to proceed with the building works. If the Owner fails to give the Builder such written instructions within two (2) days, the Builder may proceed with the building works applying the following order of precedence: (iv) (v) any special conditions; these general conditions; the specifications; other documents; the plans and figured dimensions in the plans will overrule scale measurements except in the case of patent error; then If: compliance with the Owner s instructions or the order of precedence, as applicable, involves more or less cost than a reasonable builder would have anticipated on the signing of this contract; and the problem is caused by documents other than those provided by the Builder, the Owner is deemed to have asked the Builder for a variation to carry out that work. (e) In relation to a document that is: supplied by; prepared under instruction of; or prepared from sketches provided by, the Owner, the Owner indemnifies the Builder for all costs, losses or damages that are incurred by the Builder relating to or as a consequence of any claim for breach of copyright or moral right arising from the Builder carrying out the building works in accordance with that document. (1 August 2007) 6

7 4. Copyright The Owner and Builder expressly agree that if the Builder prepares or supplies any plans, drawings, specifications or sketches for use under this contract then the Builder shall retain copyright in the documents; Where the Owner provides the plans and specifications, the Owner warrants that they are original plans prepared by or on behalf of the Owner and that any person entitled to claim copyright has consented to the use of those documents. 5. Commencement Date Subject to weather conditions and a second site inspection, the Builder will commence the building works within twenty (20) days after the following preconditions have been fulfilled: the Builder has received approval from the relevant Council and Water Authority and a Construction Certificate for the proposed construction; the Owner providing to the Builder s reasonable satisfaction: written proof that the Owner owns or is otherwise entitled to build on the site; if the Owner is obtaining finance from a finance provider, written advice from the finance provider that: the amount of finance, when added to the Owner s own available funds, is sufficient to pay the contract price; and the building works may commence. The commencement date will be postponed until all of the above preconditions have been fulfilled. If any of the preconditions have not been fulfilled prior to the expiry of the Tender then the Builder reserves the right to adjust the contract price to take into account any increase in the cost of labour and materials. 6. Payment of the Contract Price and Possession The Owner must pay the deposit stated in Item 6 on the later of the day that: this contract is signed by the Owner; and warranty insurance described in Item13 is in force and the Owner is provided with a certificate of insurance for such insurance; the Owner must pay the contract price progressively as follows: (iv) the Builder must give the Owner a written claim for a progress payment for the substantial completion of each stage; the Owner must pay a progress claim within five (5) days of the Builder giving the claim; payment of a progress claim is on account only and the Owner has no right of set off. The Owner must within five (5) days of practical completion conduct a Practical Completion Inspection of the building works; The final progress claim will include, where relevant, moneys payable for additional work carried out by the Builder under this contract; The Owner shall not be entitled to take possession of the building works or be provided with the keys until all moneys due to the Builder under the contract have been paid in full; Within five (5) days of payment of all moneys due to the Builder under the contract, the Builder will deliver and install all prime cost items and hand to the Owner all guarantees, instruction manuals and the like and all keys to the building works. (1 August 2007) 7

8 The Builder having given notice of practical completion to the Owner, the Owner must within five (5) days of receiving notice of practical completion conduct a Practical Completion Inspection of the building works. 7. Contract Price Adjustment A contract price adjustment is due and payable at the next progress payment after it arises unless a different time is agreed. 8. Interest on Late Payment If the Owner fails to pay any or part of any progress payment by the due date the Builder is entitled to charge interest at the rate of 11% on all monies due but unpaid by the Owner to the Builder pursuant to the provisions of Clause 6 which interest shall be payable on demand and shall be calculated on a daily basis from the due date to the date of payment. 9. Practical Completion The Builder and Owner hereby acknowledge and agree that the building works will be deemed to have reached the stage of practical completion when the building works have been substantially completed in accordance with the plans and specifications, regard not being had to minor omissions or defects: - the immediate making good of which is not practicable; - the existence of which and/or the making good of which will not significantly inconvenience the occupants, taking into account the areas in which they occur; and - which do not cause any legal impediment to the proposed use of the building works as a dwelling. (e) Practical completion of the building works referred to in above does not relate to any work required to be completed by the Owner as a condition of the Development Consent. The building works shall be at the Owner s risk upon the date of occupation or possession being taken by the Owner or any other person in the manner contemplated in Clause 26. The Owner will be responsible for insurance coverage of the building works in either of these events. Notwithstanding the above, the Builder will not be required to install the prime cost items until the contract price has been paid to the Builder in full. If, however, the Owner requests the Builder in writing to deliver and install such prime cost items prior to the taking of occupation then the Owner will assume the risk for such items. 10. Provision of Labour and Materials by the Builder The Builder will provide all of the labour and materials required for the proper completion of the building works; Subject to Clause below, the Builder warrants to the Owner that all the materials and workmanship used in the construction of the building works will accord with the plans and specifications. If any materials or goods specified by the contract are not reasonably procurable by the Builder, the Builder shall seek the Owner s written approval to use alternative materials or goods as are reasonably procurable, such approval shall not be unreasonably withheld. Any difference in cost as a result of such alternative shall be valued as a variation to the plans and specifications. The Builder will not be responsible or liable to the Owner if, despite the Builder s best efforts: the Builder is unable to meet precisely the Owner s choice in size, shape, texture or colour of any materials; or if the size, shape, texture or colour of any materials varies from the samples selected by the Owner as a result of variation in manufacturing technique, conditions or raw materials or the change of suppliers by the Builder. (1 August 2007) 8

9 11. Provision of Labour and Materials by the Owner In the event that the Builder agrees to allow the Owner to provide labour and materials then: The labour and materials to be provided by the Owner must be: approved by the Builder and be suitable for inclusion in the building works; and supplied or completed within the time frame required by the Builder so as to not in any way interfere with, delay or disrupt the progress or completion of any part of the building works; completed to the satisfaction of the Builder and in the time frame specified by the Builder. If the Owner breaches the above condition the Builder may elect to either: carry out the building works without incorporating the labour and/or materials; or do either or both of the following: suspend the carrying out of the building works under Clause 23; give to the Owner a notice of default under Clause 24; (e) The Builder is not responsible for and does not warrant the performance or suitability of labour and/or materials provided by the Owner. If as a result of a Council requirement, the Owner agrees to undertake any works required by Council then such works must be completed by the Owner within twenty (20) days following the Practical Completion Inspection referred to in Clause 6(vii). If the Owner does not complete the work within twenty (20) days following the Practical Completion Inspection then the Builder may, at its discretion, complete the work at the Owner s expense. Any fees incurred by the Builder or fines or charges issued by any authority as a direct result of the Owner s works will be the responsibility of and paid by the Owner. 12. Variations Except as otherwise provided in this Contract, the building works may only be varied where the Builder and the Owner have agreed to such variation and the variation is signed by the Builder and Owner. A variation is to be accepted by the Owner in writing within five (5) days of the variation notice being provided by the Builder. The Builder is not required to provide the written notice pursuant to sub-clause above whenever the building works to be carried out are, in the reasonable opinion of the Builder, urgently necessary in order to prevent loss of or damage to the building works or to any property or to prevent personal injury to or the death of any person. The Builder is to give to the Owner written notice (as soon as practicable after the building works have commenced) specifying the reasons for not giving the notice in writing required by sub-clause above and advising the reason for the variation. The Builder will endeavour to meet the Owner s requirements for any variation, however, the Builder reserves the right to refuse to execute any variations requested by the Owner after the date of this contract. An administration fee of $1, will be payable by the Owner for any after contract variation. Any variations must be within the general scope of this contract so as to be of a character and extent contemplated by and capable of being completed under the relevant provisions of this contract. If the Builder approves any variation to the plans and specifications requested by the Owner (either by way of alteration or addition) then the Builder will properly effect such varied building works within the time agreed between the Owner and Builder and at the agreed rate. (1 August 2007) 9

10 (e) (f) On completion of the variation the Owner must pay to the Builder the cost of such variation at the agreed rate plus the Builder s margin and GST. If the alteration results in an omission of part of the building works contained in the plans and specifications then a deduction from the contract price at agreed rates will be made by the Builder. 13. Compliance with the Requirements of Local Government and Other Authorities The Builder is to comply with and give all notices required by legislation or by any regulation or by-law of any authority or of any public service company or authority which has any jurisdiction with regard to the building works or with whose systems the same are or will be connected. The Builder will not be responsible for any legally demandable fees or charges that are imposed or adjusted (to the extent of the adjustment) after the date of this contract. Any such increased amounts will be payable by the Owner. Written Notice of Need to Alter Proposed Work or Processes The Builder, before making any variation from the specifications necessary for compliance with subclause, is to give to the Owner written notice specifying and giving the reason from the variation. The Owner is to provide written instructions within five (5) days. If the Builder after five (5) days of having applied for the instruction referred to in above does not receive those instructions, the Builder is entitled to proceed with the building works conforming to the provision, regulation or by-law in question and any change to the building works will be treated as a variation under Clause 12. If compliance with the above involves the Builder incurring costs beyond those provided for in this contract, then that cost is to be added to the contract price and treated as a variation. 14. Special Works If the Builder is required to undertake any building works not normally undertaken either as a result of: a condition imposed by any statutory authority which needs to be complied with in order to obtain approval to complete the construction of the building works, or if in the Builder s reasonable opinion the land is unsuitable for building purposes, then the Builder may give notice to the Owner describing such Special Works, and the reasons for undertaking such special works ( the Special Works Notice ). If within five (5) days of the Builder giving the Special Works Notice to the Owner the Builder does not receive instructions satisfactory to it including the Owner s consent to the payment of a further amount, if any, sufficient to cover the Builder s costs in connection with the Special Works plus the Builder s margin and GST then: the Builder may terminate this contract by giving the Owner a Notice of Termination ending the Builder s employment under this contract and requiring the Owner to pay the cost of unpaid building works to date, the Builder s margin, GST and any loss of profit on the balance of the building works within five (5) working days; or the Builder may complete the building works undertaking such Special Works. The Owner must then pay to the Builder the costs of the Special Works (including Builder s margin and GST). 15. Demolition and Site Conditions Where an existing dwelling is to be demolished by the Owner then the Owner must provide to the Builder confirmation in writing of demolition being completed and that: the site is free of all excess soil; long grass and debris; and (1 August 2007) 10

11 all footing materials, buildings; swimming pool, disused services, tree stumps and roots have been removed and backfilled to the approved levels with clean compacted fill; and the finished building platform is within building tolerances. If the Builder finds that there are conditions brought about by the physical conditions on, under or adjacent to the site or that there has been some contamination of the site which requires the Builder to carry out additional work then in that event such work shall be deemed Special Works as contemplated by clause 14 and the terms of that clause shall apply to such additional work. 16. Builder s Insurance The Builder will be entitled to an extension of time as though that additional work were a variation contemplated by Clause 12 and the Builder shall also be entitled to be paid the total of the actual increase in the contract price plus the Builder s margin brought about by such delay or interruption. Subject to clause 16 below, the Builder will insure against any loss or damage to the full reinstatement value of the building works to practical completion. The following contingencies shall be covered by the Builder s insurance and shall be in the Builder s and Owner s names and the Owner s finance provider (if any) or in the Builder s and Owner s names and the Owner s finance provider (if any) shall be nominated in the policy: Fire Explosion Earthquake Impact & Damage Civil Commotion Hail Lightning Storm & Tempest If the Owner or the finance provider are named as the insured, the insurance policy must: include a waiver by the insurer of its subrogation rights against any of the insured; and operate as if there was a separate policy of insurance covering each of the insured (subject always to the overall sum insured not being increased). (e) (f) Subject to clause 16 below, the Builder will maintain public liability insurance to the value of thirty million dollars ($30,000,000.00), with any negligent acts or omissions by the Owner or any person for whom the Owner is responsible, being excluded. The Builder will maintain workers compensation insurance over any workers or deemed workers and shall otherwise comply with all obligations under the Workers Compensation Act (NSW) as amended. If the Owner asks for proof of the insurance policies in, or being in place the Builder will give the Owner copies of the relevant Certificate of Currency. The insurance policies referred to in, and above will be in place throughout the course of the building works and will be maintained: in the case of the building works policy, to and including the date of practical completion; and in the case of public liability policy for the duration of the contract. (g) (h) Once any claim is settled the Builder shall diligently proceed to rebuild, replace or repair the damaged building works. Settlement of an insurance claim shall be dealt with as follows: where the Builder has reinstated and/or replaced parts of the building works, destroyed or damaged, the Builder shall be entitled to receive the amounts for that work of reinstatement and/or replacement direct from the insurer; where a claim is made by or on the Owner s behalf (not being in relation to the amounts referred to in subclauses 16(h) above all monies received shall be paid to the Owner and thereafter disbursed to the Builder by the Owner as and when the Builder reinstates and/or replaces the parts of the building works destroyed or damaged. (1 August 2007) 11

12 Any existing structures together with all the contents thereof on the site of the building works are at the sole risk of the Owner and the Owner must maintain insurance against the risk of insurable loss or damage thereto, including consequential loss to the Owner and any servant, agent, contractor or subcontractor of the Owner. 17. Risk (j) The Builder will maintain the contract of insurance required by Part 6 of the Home Building Act 1989 and will provide to the Owner a Certificate of Insurance evidencing that contract of insurance in the prescribed form. While carrying out the building works to and including the date the Owner takes possession, the Builder is responsible for loss or damage to the building works except to the extent that it is caused or contributed to by an act or omission, neglect, breach or default of the Owner or any servant, agent, contractor or sub-contractor of the Owner. The Builder is not responsible for loss or damage to the Owner s property or property for which the Owner is responsible that is left on the site or property of any servant, agent, contractor or sub-contractor of the Owner. 18. Delays The Builder is entitled to an extension of the construction period referred to in Item 12 if the building works are delayed by the Builder suspending the building works under Clause 23 or from a cause beyond the sole control of the Builder including: (iv) (v) (vi) (vii) (viii) (ix) (x) (xi) (xii) (xiii) (xiv) additional building works pursuant to the provisions of either Clause 12 and/or Clause 13 hereof; special works in accordance with the provisions of Clause 14 and/or clause 15 hereof; inclement weather, including a period of not more than five (5) days after such inclement weather has abated for external sewerage/drainage work and three (3) days in respect of construction work; the need for a survey or any other report in relation to the site and building works; anything done or not done by the Owner; delays in obtaining approvals or consents not as a result of the Builder s omission or negligence; where the Builder has advised the Owner that the Owner s selection or supply will cause a delay, and the Owner is not prepared within five (5) days to change such selection or supply; the unavailability of materials or trades beyond the control of the Builder as necessary for the completion of the building works; any delay caused as a result of works being carried out by the Owner including failure by the Owner to commence or complete such works within the time frame specified by the Builder; the period known as Industry Shutdown ; any combination of worker disputes, strikes or lock-outs affecting any of the building trades but not including those instigated directly by the Builder; legal proceedings being instituted or threatened by either party to this contract for whatsoever reason or disputes with adjoining or neighbouring owners to the site; an act of God, fire, explosion, earthquake, civil commotion or terrorism; any other matter or cause beyond the reasonable control of the Builder, The time for completion of the building works will be extended by the time the building works were so delayed or interrupted where the delays affect the critical path of the building works. 19. Quality of Construction To the extent required by the Home Building Act and subject to sub-clause 19 the building works will comply with: the Building Code of Australia (to the extent required under the Environmental Planning and Assessment Act 1979, including any regulation or other instrument made under that Act); and all other relevant codes, standards and specifications that the building works are required to comply with under any law; and the conditions of any relevant development consent or complying development certificate. (1 August 2007) 12

13 The Builder is not liable if the building works do not comply with the requirements of sub-clause 19 if the failure relates solely to: a design or specification prepared by or on behalf of the Owner (but not by or on behalf of the Builder); or a design or specification required by the Owner, if the Builder has advised the Owner in writing that the design or specification contravenes sub-clause 19. To the extent required by the Home Building Act: all plans and specifications for the building works including any variations to those plans and specifications form part of this contract; and any agreement to vary this contract, or to vary the plans and specifications for the building works, must be in writing and signed by the parties. 20. Statutory Warranties for Residential Building Work To the extent required by the Home Building Act the Builder warrants that: (e) (f) The building works will be performed in a proper and workmanlike manner and in accordance with the plans and specifications set out in this contract or, if not contained in this contract, agreed to by the parties; and All materials supplied by the Builder will be good and suitable for the purpose for which they are used and that, unless otherwise stated in this contract, those materials will be new; and The building works will be done in accordance with, and will comply with, the Home Building Act or any other law; and The building works will be done with due diligence and within the time stipulated in this contract, or, if no time is stipulated, within a reasonable time; and If the building works consist of the construction of a dwelling, the making of alterations and additions to a dwelling or the repairing, renovation, decoration or protective treatment of a dwelling, the building works will result, to the extent of the works conducted, in a dwelling that is reasonably fit for occupation as a dwelling; and The building works and any materials used in doing the building works will be reasonably fit for the specified purpose or result, if the Owner expressly makes known to the Builder, or any other person with express or apparent authority to enter into or vary contractual arrangements on behalf of the Builder, the particular purpose for which the building works are required or the result desired to be achieved, so as to show that the Owner relies on the Builder s skill and judgement. 21. Defects Liability Period (e) The defects liability period commences upon practical completion of the building works and will continue for twenty-six (26) weeks. The Owner may before the end of the defects liability period, give the Builder one list of defects in the building works that appear after the date of practical completion; The Builder will rectify the defects that are the Builder s responsibility and which are notified to the Builder during the defects liability period; The Owner must provide access for the Builder to carry out its obligations under this clause during normal working hours, Monday to Friday and must allow a reasonable time for any work to be carried out. The Builder s duty to attend to and carry out any work is limited to building works and materials or defects which directly relate to the workmanship of the Builder. It does not, as of right, extend to matters (1 August 2007) 13

14 caused by the use or occupation of the building works by the Owner or the Owner s agents nor does it cover fair wear and tear or design faults where the design is not the responsibility of the Builder. 22. Owner s Maintenance Obligation after Practical Completion The Owner is required to and agrees to carry out ongoing maintenance to the property and specifically the building works from the date of practical completion. Failure to do this properly or adequately will render the Owner liable for any consequential damage, loss or expense in relation to the building works. Without limiting Clause above this ongoing duty of the Owner covers things such as painting, termite management and termite system maintenance, general property inspections, cleaning and maintenance. If the Owner discovers a matter or thing which they believe is the responsibility of the Builder they must promptly notify the Builder in writing of the matter or thing and allow the Builder free access to review the matter of concern. Unless the Owner allows access for the Builder and provided the Builder responds within the defects liability period or if that has expired within thirty (30) days of receipt of the notice then the Owner agrees not to make any claim about or take any action against the Builder in relation to the building works. The Builder, provided it responds within the above time periods, is to be allowed to carry out any necessary building works. The Builder is not obliged to carry out building works where the need for the building works is due to a failure by the Owner to properly maintain the building works or is necessary due to fair wear and tear caused by use of the building works or the exposure of the building works to the environment in which they are situated. 23. Suspension of Works Should the Owner fail to: pay or cause to be paid any payment or any part thereof including an amount for GST within the time required by Clause 6; or confirm in writing instructions regarding an Owner requested or required variation to the building works; or provide instructions in a manner and within the time required so as to avoid delay to the progress of building works, then the Builder may, without prejudice to its right to determine this contract, suspend the building works. Suspension pursuant to this clause will act as a bar to any claim for damages, compensation or offset by the Owner against the Builder which relates to the period of suspension or consequences of such suspension. (e) The Builder is to give notice in writing of any suspension under this clause to the Owner. The parties must, in relation to a dispute as to payment or otherwise, conduct a meeting pursuant to Clause 33. The Builder must recommence the building works within ten (10) days of the payment being made. This period may be changed by agreement. Any period of suspension will automatically and as of right extend the construction period and by consequence the date for practical completion. (1 August 2007) 14

15 24. Termination by the Builder Should the Owner: (e) (f) fail to pay a progress claim or variation within five (5) days of the date on which it becomes due and payable; or become bankrupt or execute a Deed of Assignment or arrangement or make a composition for the benefit of creditors; or go into liquidation (voluntary or compulsory) or has a receiver and/or official manager appointed; or fail to give adequate instructions or directions; or die or become mentally ill prior to completion of the building works; or enter into occupation (actual or constructive) without the Builder s consent or attempts to take control of the building works; THEN the Builder may stop the building works and serve a Notice of Suspension of Works upon the Owner: specifying the default; requiring it to be rectified; and stating that this contract may be terminated if the default is not rectified within five (5) days. At the end of five (5) days, if the default has not been rectified, the Builder may serve a Notice of Termination, ending the contract and requiring the Owner to pay the cost of the building works to date not already paid and the Builder s margin within five (5) working days. 25. Termination by the Owner The Owner may, subject to the following, end this contract if the Builder: becomes bankrupt or executes a Deed of Assignment or arrangement or makes any composition for the benefit of creditors; or goes into liquidation, either voluntary or compulsory, or has a Receiver or Official Manager appointed; or without reasonable cause suspends the building works before practical completion; or fails to comply with any obligation under this contract; THEN the Owner must give the Builder written notice: specifying the default; requiring it to be rectified within ten (10) days. If the Builder does not comply with the Owner s request within the time allowed, or if the default cannot be remedied, the Owner may end this contract by giving a Notice of Termination to the Builder. If the reasonable cost of completion of the building works exceeds that which would have otherwise been due under this contract, the difference will be a debt payable by the Builder to the Owner. Should the reasonable cost of completion be less than otherwise due under this contract, the difference will be a debt payable to the Builder. 26. The Builder s interest in the Land By this contract it is specifically acknowledged and agreed that: the Builder is entitled to exclusive and uninterrupted possession of the land until all moneys payable to the Builder under this contract have been paid, subject to Clause 36; (1 August 2007) 15

16 (iv) if the Owner or any person claiming under the Owner goes into occupation or takes possession of the land, the building works or any part thereof without the Builder s prior written consent whilst any money is still owing by the Owner to the Builder then the Builder may treat any such person as a trespasser and act accordingly; such taking of possession without the Builder s consent will amount to an acceptance by the Owner of the building works in its present state. The Builder will thereafter be released from any claims for damages, rectification or maintenance in relation to the building works; interest will commence to accrue from the date upon which such possession of the building works is taken without the Builder s consent on all moneys then owing by the Owner to the Builder at the rate of 11% which interest shall be payable on demand and shall be calculated on a daily basis from the due date to the date of payment. Access to the land whilst the Builder is entitled to exclusive possession shall be by prior agreement with the Builder only and subject to the Builder s requirements as to safety or industrial relations issues. If access is granted then it must be during the permitted building hours and under the Builder s supervision. Such access must not interfere with, delay or interrupt the progress of the building works. If it does so, then this will be deemed to be an act or omission of the Owner contemplated by clause 18(v). The Owner charges the land with the due payment to the Builder of all moneys that are or may become payable to the Builder by virtue of this Agreement or otherwise arising out of the carrying out of the building works to the extent that a court or tribunal has made an order that the Owner pays that amount to the Builder. 27. Possession of the Site and Access The Builder is to have exclusive and uninterrupted possession of and access to the site for the performance of this contract. The Owner acknowledges that the site is a work site and can be a dangerous place. As such the Owner will abide with any reasonable direction of the Builder with regard to site access and movement around the site. The Owner or its duly appointed representative or an authorised officer of the finance provider shall not have access to the site for the purpose of inspecting and viewing the progress of the building works without the prior approval of the Builder and if access is granted by the Builder then it must be during the permitted building hours and under supervision of the Builder. Access will be granted by the Builder at such times and in such a manner that does not disrupt, interfere with or delay the progress of the building works or prevent the Builder from properly discharging its contractual or safety obligations. Access to the site by the Owner or is tradesmen and contractors to carry out the necessary Owner s works prior to practical completion will be undertaken with the prior consent and in co-ordination with the Builder. The Builder will not be liable for any loss damage or personal injury suffered by the Owner, the Owner s agents, contractors or sub-contractors in the event that access to the site occurs in contravention to the provisions of Clause 26,,. 28. Termite Treatment and Maintenance The Owner acknowledges and understands that the termite treatment system used at the site, if applicable, has a limited working life and requires ongoing maintenance and servicing. The Owner further acknowledges and accepts that any such system is a management scheme and that termites are a peculiar environmental risk. Owner s Duty to Maintain Termite Treatment System The Owner is solely responsible for having the building works and the land inspected in relation to termite activity at least every twelve (12) months with such inspection to be carried out by a licensed pest control person or firm. Nothing the Builder does will extend the warranty applicable to the termite treatment system used beyond the warranty period provided by the manufacturer of such treatment system. The Owner is responsible for all acts necessary or required to maintain the warranty. (1 August 2007) 16

17 29. Waiver by the Builder The failure of the Builder to exercise any rights including powers or privileges in consequence of a breach or default by the Owner or acceptance of any progress payment or other sum of money hereunder, shall not be construed to be a waiver of the Builder s rights, powers or privileges nor shall any custom or practice which may transpire between the parties to this contract be construed to waiver or to lessen the obligations and duties of the Owner. 30. General (e) Until the Owner has paid to the Builder all moneys due under this Contract then the Owner may not sell or dispose of the land without the Builder s consent. Notwithstanding that practical completion has been achieved the Builder will be entitled to retain possession of the site to the exclusion of the Owner until such time as the Owner has paid to the Builder all moneys which are payable to the Builder including Builder s margin and GST. Notwithstanding the above, the Builder will not be required to install the prime cost items until the contract price has been paid to the Builder in full. If, however, the Owner requests the Builder in writing to deliver and install such prime cost items prior to the taking of occupation then the Owner will assume the risk for such items and no part of the contract price may be retained by the Owner to cover these items. The Builder shall be entitled to retain all the keys and maintenance manuals to the building works until such time as the Builder has been paid all moneys due under this Contract. 31. Provisional Allowances The contract price includes the items of work set out in the Tender as Provisional Allowances for which the Builder cannot give the Owner a definite price. The Provisional Allowance Items referred to in the Tender set out the amount allowed for the cost of each item of work including GST. If the actual cost to the Builder is greater than the Provisional Allowance allowed for any particular item then the excess amount together with the Builder s margin shall be added to the contract price along with the additional GST. If the actual cost to the Builder is less than the Provisional Allowance allowed for each item then the contract price will be reduced by the difference between the Provisional Allowance and the actual cost inclusive of Builder s margin and GST for that item. Any such addition or deduction will be taken into account in the final progress payment after its expenditure or deduction or as agreed between the parties. 32. Notices Any notice required to be given by one party to the other party hereunder shall be in writing and shall be sufficiently given if delivered personally to the address of the addressee thereof hereinbefore set forth (or such other address as the addressee may have notified to the other party for the purpose of such notices) or by posting the same to such address in properly addressed, certified or registered postage, prepaid envelope, including airmail postage if appropriate. Any notice delivered as aforesaid shall be deemed to have been received by the addressee thereof upon the date of its delivery. Any notice posted as aforesaid shall be deemed to have been received by the addressee thereof three (3) business days after the date upon which it was posted. In addition to the provisions contained in Clause 32 of this Contract a notice or document will be sufficiently served if the notice or document is sent by facsimile transmission (provided the party on which service is effected displays a facsimile number on their letterhead) and in any such case shall be deemed to be duly given or made when the transaction has been completed, and the production of a transmission report produced by the sender s facsimile machine will be prime facie evidence of the time and fact of such transmission, except where: the recipient immediately notifies the sender of an incomplete transmission, in which case the facsimile transmission shall be deemed not to have been given or made at that time, or (1 August 2007) 17

18 the time of dispatch is after 5.00 pm on a day on which business is generally carried on in the place to which such notice is sent, in which case the notice shall be deemed to be received at the commencement of business on the next working day at such place. 33. Dispute Resolution (e) If there is a dispute between the Owner and the Builder as to whether any item of work is defective, has been omitted or has not been satisfactorily rectified the dispute must be dealt with in accordance with the dispute resolution procedure. If the Owner or Builder considers that a dispute has arisen in relation to any matter covered by this contract, that person must give to the other written notice of the details of the dispute by way of a Notice of Dispute ( the Notice of Dispute ). Within five (5) days of receipt of a Notice of Dispute both the Owner and/or Builder must attempt to resolve the dispute by conferring at least once to attempt to resolve the dispute or to agree on methods of resolving the dispute. If the dispute is not resolved informally following such a meeting, then, the Owner and the Builder may confer with a mutually agreed third party whose role will be to assist in the resolution of the dispute by mediation or expert appraisal of the work. If a third party is appointed to attempt to resolve the dispute then the Owner and the Builder will bear their own costs and expenses in connection with the mediation or expert appraisal of the building work. If the dispute cannot be resolved by negotiation or by mediation, the Owner or Builder may give written notice within ten (10) days, to the other party advising that they intend to resolve the matter through the Consumer, Trader and Tenancy Tribunal, if appropriate, or by litigation. Subject to Clause 6, even if a dispute has arisen the parties must, unless acting in accordance with an express provision of this contract, continue to perform their obligations under the contract so that the building works are completed satisfactorily within the agreed time. 34. Goods & Services Tax The contract price is inclusive of any amount payable by the Builder for goods and services tax ( GST ) in relation to the provision of goods and services under this contract. It is a precondition to the Builder s entitlement to receive any payment from the Owner under this contract that the Builder provides to the Owner a tax invoice in the form approved by the Australian Taxation Office for the GST inclusive amount of payment being claimed. 35. Severance Any provision in this 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 this contract. 36. Guarantee (e) The Guarantor as a separate party to this contract as witnessed by the Guarantor s execution of this contract does hereby guarantee the performance by the Owner of the Owner s obligations under the terms of this contract. The Guarantor does further agree that he will pay to the Builder on demand all monies which are now or which may at any time hereafter and from time to time be due and owing by the Owner to the Builder. This guarantee will not be considered as being satisfied by any intermediate payment or satisfaction of the whole or any part of any sum or sums of money owing but shall be a continuing security and extend to cover all or any sum or sums of money which become payable to the Builder by the Owner as a consequence of the provisions of this contract. The obligations of the Owner and the Guarantor are joint and several. This guarantee will not be prejudiced, diminished or affected nor will any of the parties be released or exonerated by reason of any of the following matters: Any increase, decrease, extension, renewal or restructure of the terms upon which monies owing under the terms of this contract are paid to the Builder without notice to the Owner or the Guarantor or either the Owner or Guarantor; (1 August 2007) 18

19 (iv) Any default action taken by the Builder without notice against the Owner or the Guarantor or either the Owner or Guarantor by reason of any default on the part of the Owner or any neglect or failure to enforce any of the Builder s rights under the terms of this contract;. Any irregularity, unenforceability, illegality or invalidity of any obligation of the Owner or any other party other than the parties to this contract; Any collateral or other security whether negotiable or otherwise including any other guarantee or indemnity which may now or at any time hereafter be held by the Builder from the Owner or from any other party to this contract or any other person or all or any part of the monies becoming due under the terms of this contract. (f) The obligations created by this contract between the Owner and the Guarantor of the one part and the Owner and Builder of the other shall be deemed to be principal obligations and the Owner and Builder and the Guarantor shall be deemed to be principal debtors for all of the monies, the payment of which is hereby guaranteed and accordingly the Owner and the Guarantors or any of them shall not be discharged nor shall the Owner s liability be affected by any act, thing, omission or means whatsoever whereby the Owner s respective liability would not have been discharged if the Owner had been principal debtor. (1 August 2007) 19

20 Signatures This contract is made between the Owner and Builder. The schedules form part of this contract. The Checklist in Attachment A and the Consumer Guide to Building in Attachment B do not form part of this contract. The Owner has received the Checklist in Attachment A and the Consumer Guide to Building in Attachment B before signing this contract. DATED the day of 200. SIGNED for and on behalf of ) MASTERTON HOMES PTY LIMITED )... Authorised Signatory... Signature of Witness SIGNED by the Owner/s ).. in the presence of: ) )..... Signature of Witness SIGNED by the Owner/s ) in the presence of: ) ).... Signature of Witness Statement setting out the owner s right to withdraw from this Contract under section 7BA of the Home Building Act This contract may be subject to a cooling off period that entitles the Owner to rescind this contract by giving a notice in writing as required by Section 7BA of the Home Building Act: If the Owner has been given a copy of the signed contract: at any time before the expiration of 5 clear business days after the Owner is given a copy of the signed contract; or If the Owner has not been given a copy of the signed contract within 5 days after the contract has been signed: at any time before the expiration of 5 clear business days after the Owner is entitled to be given a copy of the signed contract. IF the Owner exercises the right to cool off then this contract is rescinded and the Builder is entitled to a reasonable price for the work carried out under the contract until the date this contract is rescinded. (1 August 2007) 20

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