Residential building material and labour shortages

The Queensland residential construction industry is currently impacted by an Australia-wide shortage of building materials and skilled trades.
 
These shortages are due to market forces amplified by the COVID-19 pandemic and they are impacting everyone in the supply chain, from suppliers and builders to subcontractors, employees, and consumers. It is expected it will take some time for the industry to get back to its usual supply and operating rhythm.

The QBCC is working together with the Queensland Government and industry associations such as Master Builders Queensland and the Housing Industry Association to help everyone understand the challenges these shortages pose.

Delays, additional costs and their flow-on effects can have a significant personal impact. If you feel like you need support, please reach out to organisations that are there to help, like Mates in Construction (1300 642 111) and Lifeline (13 11 14).

Accelerated Builder / Consumer Dispute Framework

The Accelerated Builder / Consumer Dispute Framework (ABCD) is a temporary independent mediation service that will be available from 1 July 2021 to help address the challenges currently facing the residential construction industry.

The ABCD mediation service will match applicants with a qualified mediator, to help facilitate a conversation between parties experiencing issues with domestic building contracts underway due to industry material or labour shortages. 

The mediation process provides an opportunity for impacted parties to discuss the situation, its impact and work towards a realistic solution together. Applications are free and are subject to the following eligibility requirements:

  • you must be either a QBCC licensee or property owner
  • you must be a party to a domestic building contract for a new home or a major renovation over the value of $150,000
  • work must have commenced on this contract
  • the dispute you are experiencing must be as a result of industry materials or labour shortages
  • you must have made an attempt to resolve the dispute between parties prior to applying.

Full eligibility criteria can be found here.

How to apply

You can apply by completing and submitting the online Mediation Intake Form – Industry Shortages.

Information for licensees

It is essential to keep the lines of communication open with your clients so they understand the situation and you can manage expectations regarding the project.

To help with this, you may wish to share the Industry shortages in the residential construction industry consumer factsheet with your clients. 

Product substitution

If you cannot access the building products you usually use and are considering alternatives, please ensure they conform to Australian building standards and your clients agree to the product change where required. 

Extensions of time for contracts on foot

You may wish to seek an extension of time to complete the contract due to issues beyond your control. We recommend you contact the property owner before requesting an extension of time to explain the situation and seek their cooperation. 

Under Schedule 1B, section 42 of the Queensland Building and Construction Commission Act 1991 (QBCC Act), you can only claim an extension of time if the delay was:

  • not reasonably foreseeable and beyond the reasonable control of the contractor; or
  • caused by the building owner; or
  • caused by a variation that complies with the requirements in section 40 of Schedule 1B of the QBCC Act (essentially, the variation must be recorded in a written variation document, promptly copied to the owner and agreed in writing by the owner before the variation work is started).    

Any extension of time request must be provided to the property owner within 10 business days of the builder or tradesperson becoming aware of the cause and extent of the delay, or when the builder or tradesperson reasonably ought to have become aware of the cause and extent of the delay. It is at the discretion of the property owner to approve or decline the request. You cannot adjust the date for practical completion without approval from the owner.

Dispute mediation services

If you have tried to reach an agreement about impacts due to material or labour shortages but still have concerns, as a first step you can consider mediation.  

If you belong to an industry association, such as Master Builders Queensland or the Housing Industry Association, your association may be able to assist with contractual disputes. The Queensland Government’s Accelerated Building / Consumer Dispute (ABCD) Framework is also an option.

Before you enter into a new contract

When calculating the start and finish dates in your domestic building contracts, always make sure you allow for delays reasonably foreseeable and within your reasonable control at the time of contract signing. 

It is essential in the current circumstances that you are especially careful when calculating the start date and date for practical completion to include in your domestic building contracts. Be sure to allow ample time for any unforeseen delays in the construction period. 

It is recommended that you check the availability of key personnel (including engineers, certifiers and subcontractors, where relevant) and all major supplies before finalising these dates and signing the contract.  

We also suggest you explain the impact of the current shortages to your clients so they have realistic expectations and understand the reasons for what may seem to them to be an extended construction period.  

Further information

We have a range of licensee resources available:

If you have any concerns or questions, you can submit a general enquiry to the QBCC or call us at 139 333.

Information for home owners 

During the construction, renovation or repair of your property, keep in contact with your builder or tradesperson to understand how industry labour or material shortages may impact your work and which measures can be put in place to address the situation.   

Extensions of time for contracts on foot

Your builder or tradesperson may request an extension of time to complete your contract due to issues beyond their control. They may also seek your approval to use alternative products, if they cannot access the products they usually use or those specified in your contract.

Under Queensland legislation, your builder or tradesperson has an obligation when calculating the start and finish times for your project to include an allowance for all likely delays, which are reasonably foreseeable at the time of signing the contract. 

Any extension of time request to your contract should be provided to you in writing within 10 business days of your builder or tradesperson becoming aware of the cause and extent of the delay, or when they reasonably ought to have become aware of the cause and extent of the delay. It is your decision to either approve or decline the request for an extension of time. Your builder or tradesperson cannot adjust the date for practical completion without your approval.

It is recommended you consider obtaining your own legal advice if you are looking to make changes to an existing contract due to industry shortages. 

Dispute mediation services

If you have tried to reach an agreement about labour or material shortages but still have concerns, as a first step you can consider mediation.  

The Queensland Government’s Accelerated Building / Consumer Dispute (ABCD) Framework may be a suitable option. 

Before you enter into a new contract

If you are looking to build or renovate, we suggest you discuss the current industry shortages with your builder or tradesperson. Ask them about what delays they anticipate and seek confirmation that they have incorporated reasonable allowances when calculating the start and practical completion dates stated in the contract. Check also with your builder or tradesperson to make sure that the materials they need for your work are available.

It is also important that if you are likely to incur extra costs if the builder or tradesperson does not complete the work within the time allowed for in the contract (including any lawful extensions of time), you carefully consider and insert a reasonable daily amount for liquidated damages to compensate you. You can find more information about liquidated damages in our Domestic Building Contracts – general information for owners and contractors.

Cost-plus contracts

You should also be aware of risks associated with cost-plus contracts. A cost-plus contract involves a “pay as you go” arrangement, with no certainty as to the final cost of the work.

Regardless of the impacts of market forces, Queensland laws that help protect consumers and keep the Queensland building and construction industry safe and sustainable still apply. 

Further information

We have a range of home owner resources available:

If you have any concerns or questions, you can submit a general enquiry to the QBCC or call us at 139 333. 

This information is general in nature. It does not constitute legal advice and shouldn’t be relied upon as such. For advice regarding a specific project or contract you should obtain formal legal advice from a practising lawyer.