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THREE WAYS TO OBTAIN THE CONSTRUCTION CONTRACT FROM THE DEVELOPER

In Queensland, a developer must provide key documents, such as construction contracts and safety certificates, at the first annual general meeting. These documents are essential for effective property management and maintenance. If a developer fails to comply, the body corporate has several options. This article explores these options and underscores the importance of acting swiftly to preserve the body corporate’s rights and address potential building defects.

Developer obligation

The regulation modules state that the developer must handover documents in the developer’s possession or control relevant to buildings or improvements, including:

  • Contracts for building work, or other work of a developmental nature.
  • Certificates of classification for buildings and fire safety certificates.

First option: request the construction contract

The simplest option is to request the construction contract from the developer. It may be that either the body corporate has lost that record, or that the developer forgot to hand it over. The sooner this request can be made the better, as it is possible the development company may be wound up after the development is complete.

Second option: pursue the matter through the Magistrates Court

If the developer does not hand over the construction contract, it constitutes an offence under the regulation modules. The offence attracts a maximum penalty of 150 penalty units, which is presently $23,220. This can be pursued against the developer through the Magistrates Court.

While the Magistrates Court will not order the developer to hand over the construction contract, the possibility of this criminal outcome, and any implications it may have on the directors of a development company, may be sufficient for the development company to voluntarily handover the construction contract.

Third option: act early to preserve your rights as a body corporate

A reason for wanting the construction contract is so a body corporate can investigate suing the builder for any defects in the construction. The Courts have the power to order a party to produce a document that would assist a body corporate to ascertain or identify the whereabouts of the builder.
 
Amongst other things, the body corporate must satisfy the Courts that it has made reasonable inquiries to identify the builder before making the application. The matters that the Court would need to be told about include:

  • The extent of the body corporate record search that has been performed.
  • Written requests made to the developer or any possible builder.
  • The reason the body corporate considers it may have a claim against the builder (such as a building defect report).

There are strict limitation dates that apply to claims under a construction contract. If a body corporate does not have the construction contract or is contemplating a need to pursue building defects, it is important that the body corporate acts early to preserve its rights before those rights are lost forever.

Summary

In summary, if the critical documents are not handed over by the developer, the body corporate has several courses of action: requesting the documents, pursuing legal penalties against the developer, or seeking a court order to obtain them. Timely action is crucial to address potential defects and preserve legal rights. Understanding these options and acting swiftly helps the body corporate ensure proper management and compliance, protecting its interests and facilitating effective property maintenance.

Article Contribute by Brendan Pitman, Partner, Grace Lawyers

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