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Key differences between commercial and domestic building disputes

April 1, 2020
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Key differences between commercial and domestic building disputes
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Dispute resolution
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Discover where you stand with commercial and domestic construction disputes

The construction industry is dominated by contractors, builders, tradies, and developers. Each party is looking to make the most of opportunities to build domestic and commercial projects, alongside the added satisfaction of adding to a city's skyline.

Much of what is completed in the construction industry, whether commercial or residential, is predicated on work being completed on time and to a required standard. When work is not completed adequately, or where there are issues between parties, disputes may arise. The dispute management process differs depending on whether you are involved in a commercial or domestic construction project.

This article explains key differences between commercial and domestic disputes and discusses the steps to take in resolving disputes.

AANDI Lawyers are experienced in resolving commercial and domestic construction disputes. Contact us today on [phone] for a free, confidential discussion about your matter and find out where you stand.

Commercial construction disputes

Commercial construction projects are those which are built for non-residential purposes such as office buildings, schools, and public use buildings. Apartment buildings for commercial sale are also considered commercial construction projects.

  • Commercial construction disputes may arise due to conflict between the developer and the builders contracted to complete the works.
  • Commercial construction projects often have a high net worth compared to domestic projects, which means that swift and accurate resolution of matters is vital for all parties involved.
  • Commercial construction contracts usually have dispute resolution clauses contained within them which outline how a dispute should be managed.

Commercial construction projects often have exacting contracts for completion of works. If works are not completed on time or to the standard outlined, this can be grounds for termination of the contract or other serious outcomes.

Domestic construction disputes

Domestic building work is associated with building or improving a home, such as a unit or house. With a domestic construction dispute, your home is the subject of the dispute, whether due to poor quality work, or works not being completed on time. Each party must work to find common ground together to resolve the dispute.

  • Victoria has a domestic building dispute resolution service which aims to help resolve matters between parties swiftly, without the need for litigation.
  • If you cannot resolve your matter domestic disputes are primarily litigated through VCAT.
  • VCAT hears domestic building disputes about defective work, costs of rectification, validity of contract, and termination matters — among other issues.

Domestic construction disputes are often fraught with emotion due to your home being involved. It helps to have legal representation and support when going through a dispute so that you secure the best possible outcome for your matter.

Processes in resolving disputes

In every construction project there are usually extensions and modifications required as works progress. Such delays and changes can cause disputes, in which case the parties must engage in dispute resolution processes.

The process for resolving a dispute in either commercial or domestic construction projects looks much like this:

  1. Make contact with the other party, outlining the dispute and providing them with options to rectify the dispute and a date by which to respond to the dispute.
  2. If the dispute is managed by the date outlined then no further action is needed. If the dispute is not resolved then you should engage with the relevant body, whether the DBDRV or a legal commercial construction dispute resolution practitioner, to get help to take your next steps.
  3. If you cannot reach an agreement then you may need to commence action against the other party in the correct forum, whether VCAT or a Victorian Court.
  4. You may be ordered to attend mediation or conciliation as part of the dispute resolution process.
  5. If an agreement is reached the parties should confirm the agreement in writing. If an agreement cannot be reached then the relevant court will be relied upon to decide on the outcome of the matter.

Commercial construction disputes will follow a more formal process, while a domestic dispute will often be more relaxed in terms of contact and formalities. Despite this, is it still vital to record all contact with the other party so that you have details of all attempts to resolve your matter if it does proceed to dispute resolution and/or litigation.

Similarities

Disputes between commercial and domestic construction contracts share some similarities, namely:

  • Parties in dispute who need to find common ground to resolve a matter satisfactorily;
  • A contract for works performed, whether oral or written; and
  • A desire to resolve matters with minimum hassle and expense.

Beyond this, the nature of dispute resolution differs in many ways when comparing commercial and domestic projects.

Key differences

There are a number of key differences between commercial and domestic construction disputes:

  • Commercial construction disputes are usually complex matters and may require some form of dispute resolution and/or litigation, while domestic disputes are often more straightforward in nature and may be resolved prior to litigation in many cases.
  • Commercial disputes will generally have a dispute resolution clause to abide by, whereas a domestic dispute will be dictated by the parties involved.
  • Commercial construction disputes may take some time to resolve, and require legal advice, while domestic disputes may be resolved more rapidly. That's not to say that all domestic disputes will resolve quickly without litigation; many domestic disputes do need time and careful

Both domestic and commercial construction disputes benefit from legal guidance and support. Going through any type of dispute is difficult, and legal dispute resolution lawyers help by providing guidance and support throughout this process.

Possible outcomes

The possible outcomes of a commercial or domestic construction dispute are as follows:

  1. A resolution is achieved and the parties are able to move forward;
  2. The parties cannot agree on a resolution and are ordered to attend mediation, during which a compromise is reached;
  3. The parties cannot agree and the matter is taken to court, in which case the courts decide on an outcome;
  4. One or both parties wishes to terminate the contract and the matter is resolved satisfactorily without proceeding to court;
  5. The contract is terminated by one party and one or both parties seek damages for costs, rectification, and/or other associated expenses.

The best possible outcome is one that happens swiftly, and with minimal expense. In many cases better to resolve a matter without proceeding to litigation, purely as there are potentially significant costs and time involved in going to court.

AANDI Lawyers are experienced in working with building and construction disputes and can assist you in resolving your construction dispute. Contact our team today on [phone] or online and find out where you stand in your dispute.

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