Written by Chris Pickering, Client Manager - Commercial Services
The building sector is facing a triple threat this winter – supply chain issues, COVID-19 impacts and a skills shortage. Our number one piece of advice for builders and homeowners is to keep talking.
Communication is the key to keeping projects moving and preventing issues from escalating into disputes. Talk lots, talk early. For builders, as soon as you anticipate a potential issue on the horizon, have a chat with your customer. Often, they’ll understand the unique factors at play, especially those out of your hands. Give them a call or email every week, even if there isn’t much to update them on. Often, this makes all the difference in your working relationship.
The same advice applies to homeowners. If you have a query about the project or invoice, or if you can spot a potential issue, it’s important to speak up and have those conversations early. Ask questions. Explore options. Through early conversations, you can clarify information and prevent issues from escalating.
If you find yourself in real difficulty during a project or if communication breaks down between you and other person, talk to the experts. Registered Master Builder Association have engaged Fair Way to provide a facilitation service which is free for both Master Builder members and homeowners. Our focus is on early resolution. You can register online or talk to the team on 0800 77 44 02. An independent facilitator will support you to talk through the building project and issues that have emerged.
We recently facilitated a building and construction case. During the building process for a new home, plans changed. Multiple variations were made to the contract and unique additions were added to the plans. The building project progressed and prior to possession, the homeowner queried some of the amounts invoiced by the builder and sought an explanation for the additional costs.
Unfortunately, these queried amounts were not cleared up and it developed into a dispute in which the homeowner withheld $80,000 from their final payment. Following failed mediations, unsuccessful legal involvement and creditors for sub-contractors chasing up the building company for outstanding amounts, the builders reached out to Fair Way for assistance.
How we helped
Fair Way’s facilitator contacted the homeowner and quickly identified that although the parties appeared to be at odds, they had similar interests. The homeowner wanted to move into their new home and the builder wanted to complete this project and manage their cash flow. There was a clearly mutually beneficial outcome of clarifying the issues at hand and arranging for payment to be made for any items not in dispute. Both sides could see value in further exploring the legitimately disputed amounts.
A facilitated discussion was quickly scheduled to avoid the further deterioration of this situation. Preparatory work was done prior to the facilitated sessions to clarify the issues and amounts that were in dispute, and to identify where the parties already agreed without knowing it. The list of disputed amounts was quickly narrowed down and these were individually explored and agreed upon. Structure and focus were important in this facilitation due to the long list of disputed issues and the time required to cover everything that needed to be discussed.
Both parties had a real interest in resolving this matter and arranging possession, therefore the facilitator assisted the parties to reach an agreement in which 95% of the outstanding balance was paid and possession was arranged within days. Terms were agreed for the outstanding amounts.
When we followed up with the parties, both mentioned how they are now in a vastly better position than before Fair Way had been contacted – the homeowner is now in their new home and the builders have now been paid after months of delays and disputes.
You can find more information here about Fair Way’s building and construction services or talk to the team on 0800 77 44 02.
About the author
Chris Pickering (email@example.com) is Client Manager for Commercial Services at Fair Way and is based in Auckland. As Client Manager, Chris works closely with our team of Resolution Coordinators and Resolution Practitioners across a portfolio of services which includes Fair Way’s building and construction, commercial and private, financial, education and workplace dispute resolution services. Chris has been admitted as a solicitor in New Zealand and England and is an Associate Member of the Arbitrators’ and Mediators’ Institute of New Zealand (AMINZ).