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ARTICLE · 10 FEBRUARY 2016

Construction contracts: What commercial investors need to know

Coleman Greig Lawyers
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Corporation interests should be protected by contract, so they aren't vulnerable to a builder's lack of reasonable care.

AustraliaReal Estate and Construction
Dean Claughton
Dean Claughton
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I wrote a few weeks ago about the diligence needed by prospective purchasers of commercial property. However a unanimous decision by the High Court indicates that commercial investors will have to be just as careful, particularly when drafting their contract to protect their own interests.

The case of Brookfield Multiplex Ltd v Owners Strata Plan 61288 [2014] HCA 36 concerned the construction of an apartment complex under a design and construct contract. The apartments were to be operated collectively as serviced apartments and the lots had been sold to investors.

An 'Owners Corporation' was formed following the registration of the strata plan and acted as the manager of the scheme, as well as the agent for the owners of the serviced apartments.

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