Business
This month's podcast features Mark Holland, Partner and construction law specialist at Hazelton Law, who provides a practical hands-on perspective on the ins and outs of charge-up contracts. He discusses frequent concerns that have arisen with the use of charge-up contracts in NZ residential construction due to the disruptions of the COVID pandemic.In particular, Mark addresses: • Preparing charge-up contracts, scope, rates and margins • The role of the estimate, variations in charge-up contracts, the “10% rule”? • Interim payments; actual and reasonable costs (the reasonable price rule), evidence to be provided • Ongoing obligations with regard to the final cost. Typically, there are two types of building contract used in New Zealand – fixed-price contracts and charge-up (also known as cost-plus-margin contracts), though knowing which of these contracts to go with can seem daunting, with usually either being suitable options. As both come with their advantages and disadvantages, it’s important to understand these differences so you can decide which best suits your project, budget and preferences and to avoid any surprises down the track.Mark discusses the confusion between charge-up and fixed-price contracts (note: Registered Master Builders members can access these contracts online). Mark answers common questions around how builders manage price increases and challenges around supply when using the charge-up contract. In particular, Mark covers the scope, rate and margins; the important role of the estimate, variations and the 10% rule; and implications on final cost if estimates are not outlined properly.Get help from Hazelton LawIf you have additional questions or need advice, Hazelton Law offers Master Builders members a free 15 minute call and discounted rates to assist with more gnarly issues. Contact the friendly team at Hazelton Law on (04) 472 7570.Presenter: Mark Holland, Partner, Hazelton Law Mark is currently working in the areas of construction and insurance law. He has worked on several adjudications concerning claims for variations and extensions of time. Mark also works in both drafting construction contracts and other dispute resolution matters. Mark has a very "hands on" appreciation of the pressures that all parties face on site. Mark's experience makes his legal analysis of contract documents particularly focused on the practicalities of running a site. Links Hazelton Law: https://www.hazelton.co.nz/ Registered Master Builder members can now access online Contracts and Guarantees “Ruanuku” here Where else you can find usWebsite: https://www.masterbuilder.org.nz/Elevate Platform: http://elevate.masterbuilder.org.nzInstagram: https://www.instagram.com/masterbuildernz/Facebook: https://www.facebook.com/registeredmasterbuildersYouTube: https://www.youtube.com/channel/UCmh_9vl0pFf0zSB6N7RrVegTwitter: https://twitter.com/MasterBuilderNZ