How To Address An Extension Of Time?
Extensions of time, what are valid claims and can you dispute them for a more favourable outcome?
You will likely receive an Extension of time claim or EOT during your home build. What is an Extension of Time or EOT, and what should you do?
Seeking professional and legal assistance should be your first step if you don't understand the claim or know what to do. Doing nothing or failing to meet your contractual obligations may find you at a disadvantage.
How to Address an Extension of time Claim
What is an Extension of Time (EOT) claims
The importance of Extension of Time claims
What gives rise to an Extension of Time claim
What should an Extension of Time claim include
Can I dispute the claim
Practical advice
What Is An Extension Of Time (EOT) Claims
Home building is exposed to many variables and variations, some of which can give rise to additional time requests to complete the project; the request for extra time is referred to as an EOT. Sometimes, a saving of time may be warranted, resulting in an earlier completion date; this article will assume extra time, which is the more common event.
Common reasons for EOT claims are client changes or variations, weather, and authority delays; however, the list is not exclusive to these reasons. Always check your contract first to determine if the reason for a delay claim is listed; if not, it may not be a legitimate claim.
This article is not legal advice nor a substitute for obtaining professional legal advice. Always seek legal advice before taking action, especially if you lack the professional expertise and experience to address the situation.
The Importance Of Extension Of Time Claims
The importance of EOT claims is they allow the date for practical completion to be extended. If granted, it will entitle the builder to additional time and when you can claim liquidated damages.
Some contracts allow additional costs associated with the EOT; check if this applies to your contract.
In summary, EOT claims can cost you time and money, so be mindful of your rights before blindly accepting the claim without questioning it and seeking legal advice.
What Gives Rise To An Extension Of Time Claim
There is generally an expectation of three issues to be established to ascertain if an EOT is valid, claimable and reasonable in terms of the length of time claimed; they are:
Was there a qualifying cause of the delay?
Has the contractor complied with the timelines?
Did the reason for the delay actually delay the builder?
If you receive an EOT, your contract will generally have a process that you should follow.
A builder can issue an EOT; however, they should only do so if circumstances are out of their control. If the builder does not follow the procedure in the contract and cannot reasonably justify the claim, then you may be entitled to request justification and supporting evidence to assess the claim.
Monitor the builders program, if you don’t have one insist and ask how they will address extension of time claims without one when the come due.
What should an Extension of Time claim include
The builder should generally issue an EOT claims per the contract in writing, which typically include the following:
Outline of the EOT detailing the reason and length of the claim.
Issue the claim within a stipulated timeframe from when the cause and extent of delay became evident.
If you approve the EOT, generally, the builder must provide you with a copy within a stipulated contractual time frame.
When the builder does not claim the EOT in accordance with the contract timelines, it may give you a reason to dispute it and reject the claim. Before doing so, always seek professional legal advice to ensure you are acting in compliance with your contract.
If your builder has failed to provide you with a program or maintain the original program that reflects changes to progress, that is a potential sign that they are not as organised as they should be. Without a program, it would be difficult to justify a time extension as there is no record of what the program should be other than the date for practical completion.
Can I Dispute The Claim?
If you receive an EOT, you cannot unreasonably refuse it; equally, you are entitled to dispute it to either have it dismissed or agree to a mutual compromise if you have justifiable grounds.
Yes, you can dispute the claim if you feel that the claim is unreasonable or lacks clarity. Most contracts require a dispute to be submitted within a stipulated time frame and in writing advising:
of the dispute to the extension of time
the reason why the EOT is disputed
Once the dispute is issued, there is generally a structured process both parties are expected to comply with to resolve the dispute. This can vary greatly depending on the contract being used.
Seek professional advice promptly and follow your contractual provisions. You may find that despite being in a position to contest the claim rightly, you could breach the contract by not complying with the process despite being in the rightful position.
Practical Advice
Always ask if you are unsure
If the claim seems unreasonable, check your contract and seek advice promptly to ensure you do not breach it. Many contracts set time frames to address these claims, some as little as five working days.
If you have not been issued a program at the commencement of the build, request one, as it is challenging to assess EOT claims without understanding the program. If there is continued resistance, this may assist your cause to refuse EOT claims, however, seek advice on this.
Considering the potentially horrendous duration of EOT claims that you could face and the impact it can have on your finances and personal life, we strongly suggest:
Query any EOT if you feel it is unjustified or unreasonable, ensuring compliance with your contractual obligations.
Seek professional and legal assistance.
Monitor and record possible delays, dates, weather, and general site circumstances.
Try to anticipate the reason for delays if things are not going to the program.
If there are delays, regularly request an update of the program.
Record everything and request everything in writing, as your memory will fail you if you have to dispute a claim.
Extensions of time are one element of the home building process. If you need more help to navigate your home build journey, check out Dreams to Reality your home build companion course, which is curated to help you navigate your journey from start to finish.
Good luck on your journey. Feel free to drop us a line at Dddreamhouse or join our Facebook group and hit us up with any questions you may have and see if we can help you navigate your home build journey.
