Who pays for construction delays?

November 11, 2024

There is an old joke in the construction sector that says, “All construction projects follow the 3, 2, 1 rule – It takes three times longer than planned, costs twice as much as planned, and you only ever develop property once.” This is obviously an exaggeration, but as is often the case, there is some truth in the joke. In this article, we explore construction projects that are not completed by their deadlines, examining who should be held accountable for this and the additional costs that usually follow.

Understanding liability for project delays

The liability for delay is ultimately determined by the contractual risk matrix that the parties (the contractor and the employer/developer) have agreed to before the project starts. Reading and understanding your construction contract is essential to determine who will stand in for delays and associated costs.

However, given that many construction contracts follow standard-form agreements, we will look at general industry norms in standard-form contracts such as the NEC or FIDIC contracts. For a start, these contracts provide that the party responsible for the delay must (generally) carry the cost of the delay. As an example, if the contractor fails to manage its time frames and sub-contractors properly and this leads to the delay, the contractor will likely be responsible for the increased cost. On the other hand, if the delay is caused by the developer’s refusal to provide access to the construction site to the contractor, the responsibility will most likely fall on the developer, who will have to carry the cost.

External factors and unforeseen delays

These examples are relatively straightforward and sensical, but what happens when neither party is responsible for the delay? A more difficult example would be when the contractor cannot access the construction site due to community protests and can therefore not continue with construction. Generally, it would be difficult to expect the contractor to take responsibility for such completely unforeseen circumstances. It is therefore reasonable to expect that the developer might have to carry the cost of such a delay. Of course, this is not a given and may very well change if the employer can prove that some of the instigators of the protest are employees of the contractor and that the risk should therefore fall to the contractor.

Force majeure and compensation events

Another reality that many projects face is what is termed force majeure events, they may be loosely defined as events that occur outside of the control of the parties to a contract. These may vary greatly, depending on circumstances and your particular contract. An example that may resonate with most South Africans is severe weather events or perhaps even wildfires that can lead to substantial project delays. In such circumstances, the NEC3 Engineering and Construction Contract for example makes provision that a compensation event may be notified by a contractor. The compensation event is then assessed following the provisions of the contract, considering the effect of the delay, the reason for the delay and whether the event could have or should have been foreseen by the contractor.

If the event does constitute a compensation event by meeting all the requirements, an assessment is done of the effect of the compensation event, which then allows for compensation which may include an increase in price, or an increase in time to complete the project, or both. The process can be complex but fortunately, various experts can assist with finding the answers, such as engineers, quantity surveyors and legal experts, who often work as a team to make out the best case possible for their client.

Each of these steps taken by a contractor or developer must be done in accordance with the contract, within certain time frames, in the NEC3 contract discussed above, it is within eight weeks of the event coming to the contractor’s knowledge that the contractor must give notice of the compensation event to the employer, otherwise the contractor loses the claim. The understanding and management of such notifications, time frames and general contract compliance are vital as otherwise, the likelihood of losses increases exponentially.

The importance of contractual awareness and legal preparation

The allocation of risk and the increased cost of delays may be typically borne by the “guilty party”. However, establishing ‘guilt’ or responsibility can be complex and require a full appreciation of not only the factual circumstances surrounding the delay but also the contract that has been signed to determine where liability will fall considering what has been agreed by the parties. In some cases, the parties may have excluded claims for certain types of risks or events, which will then result in the responsibility for loss falling to the agreed party irrespective of fault or responsibility.

It remains a prudent call to ensure that you understand your construction contract and the risk allocations before you sign. Likewise, when issues start, you must obtain legal advice as soon as possible to determine your contractual and legal position and ensure you are prepared for the rough waters that could be ahead.

Disclaimer: This article is the personal opinion/view of the author(s) and is not necessarily that of the firm. The content is provided for information only and should not be seen as an exact or complete exposition of the law. Accordingly, no reliance should be placed on the content for any reason whatsoever and no action should be taken on the basis thereof unless its application and accuracy have been confirmed by a legal advisor. The firm and author(s) cannot be held liable for any prejudice or damage resulting from action taken on the basis of this content without further written confirmation by the author(s).

Author: Herman du Randt, PH Attorneys

Website: https://www.phinc.co.za/

Selling Your House This Summer? Get Your Ducks in a Row With This Checklist

“In the summertime, when the weather is high, you can stretch right up and touch the sky.” (Mungo Jerry)

Summer’s here with its blue skies, happy holidaymakers from around the country and the world, and, as always, an upsurge in demand for houses. If you’re going to capitalise on this seasonal upswing, start planning your sales strategy now with our simple, practical Seller’s Checklist below.

Follow these 10 steps for a successful sale:

1. Ask yourself “What’s my goal and how will I get there?”

The first step is to outline your strategy, starting with your end goal. Of course, all sellers want to get the best price and to get paid out as quickly as possible, but brainstorm the specifics. What price do you actually want to achieve? Define your perfect buyers (a critical and much-overlooked step) and think about how you’ll find them. Which estate agent should you employ? And so on…

It pays to bring us in from the start. Not only can we help you find the right agent for the job, but we’ll also tell you what prices are being achieved in your area and share our thoughts on how to avoid the over-pricing trap – a common mistake which can taint a property for months, or even years.

We’ll also outline the whole sales and transfer process for you from a legal perspective, highlighting both the potential pitfalls to watch out for, and the many ways in which you can help make the whole process as smooth, quick and hassle-free as possible.

2. Give notice to your bondholder

If you have a home loan, remember that some banks will charge an early settlement penalty unless you give them 90 days’ written notice.

3. Prepare a cashflow projection

Get your finances ready to cover all your selling costs, including:

Compliance certificates and any repair work needed to get them issued. Bond cancellation fees (if you have a home loan).
Final municipal accounts (rates, refuse, sewerage, and water) and, if your property is in a sectional title scheme or Homeowners Association complex, outstanding levies. CGT: Plan for possible Capital Gains Tax on your profit (subject of course to exemption thresholds).
Estate agent’s commission is normally paid out by the conveyancer on transfer – but don’t lose sight of it when you’re dreaming about how to spend the proceeds!

4. Spruce up your property

Pretend you’re a house hunter seeing your property for the first time:

What’s its “kerb appeal”? How about its “front door appeal”? First impressions can make or break a sale, so ask yourself “what will potential buyers see when they first drive up to my property, park, and walk through the garden into my house?” Imagine being greeted by a neat, tidy, colourful garden with a sparkling pool, bright and airy rooms with homely wafts of fresh air and brewing coffee – get this bit right and you could seal the deal in the first few minutes of a viewing.

Declutter and tidy up, both inside and out, particularly on viewing and show days – the hassle is well worth it.
To give your property that all-important feeling of being well maintained, find and fix small issues like leaky taps, peeling paint, dark musty corners, scruffy gardens, murky swimming pools and the like. Deep clean if there’s any risk of doggy smells or stained carpeting spoiling that positive first impression.

And last but not least, we come to a deal breaker of note. Many a sale has been lost purely because of old, unwelcoming bathrooms or kitchens. Spruce them up now: repaint, retile or renovate completely, if necessary.

5. Start getting your paperwork together

To speed up the transfer process when you do sell, and in case potential buyers ask to see them before offering, make a start now on putting these basics together:

Your original title deed (or a copy from your bank if the original is held as security for a bond). If the original has been lost, we’ll be able to get an early start on obtaining a replacement for you.

Your ID (and your spouse’s, if you own the property jointly or are married in community of property).
Approved building plans and any compliance certificates you already have.
A recent municipal rates account showing you’re up to date.

6. Make sure your property is compliant

Find out what compliance certificates you will need early so you have time to fix any issues:

Electrical compliance certificate. Plumbing/water installation compliance certificate (required in Cape Town – check whether your local authority has any similar provision). Gas compliance certificate if you have a gas installation. Electric fence certificate (if applicable). Beetle clearance certificate where needed.

7. Complete the disclosure form

You’ll need to sign a mandatory disclosure form in which you must list all defects or issues you know about, such as damp, leaks, structural issues, boundary disputes, unapproved alterations and the like.

8. Don’t sign blind

Most importantly, when you do get an acceptable offer, don’t sign anything until we’ve checked it all out for you. The terms and conditions in the sale agreement (often titled “offer to purchase”) become binding as soon as you sign. There’s no going back and many a seller has regretted “signing blind”. Even “standard” clauses may come back to bite you because every sale’s different, and every seller has their own areas of risk.

9. Nominate the conveyancer

It’s your right as seller to choose the conveyancer, so don’t let anyone convince you otherwise.

10. Communication is key!

Remain in constant touch with your agent, with us, and with the buyer. Quick responses to requests for documents or signatures can save days or even weeks in the transfer timeline.

In closing…

Selling a property doesn’t have to be stressful. Work through this checklist step by step and keep us constantly in the loop to avoid delays, disputes, and unwelcome surprises.

Parental Leave: Out With the Old, in With the New

“Raising kids is part joy and part guerilla warfare.” – Ed Asner (actor with a great sense of humour!)

A game-changing judgment from our Constitutional Court sets out new rules for parental leave.

The Joy of Becoming Parents, and a Father’s Leave Dilemma

The birth of a couple’s first child presented them with both a bundle of joy and a practical dilemma.

Dad wanted to be the baby’s primary caregiver while his wife carried on running her two businesses, so he asked his employer for four months’ parental leave.

“Sorry,” said his boss, “the law only allows you ten days.”

In the end, he had to take six months’ unpaid leave – which came with some unhappy financial and career consequences.

Off to the High Court he went. That Court’s declaration of invalidity of the relevant provisions in the Basic Conditions of Employment Act (BCEA) and Unemployment Insurance Fund (UIF) Act has now been confirmed by the Constitutional Court – with some important modifications.

Let’s start with a quick look at how the current wording of the two Acts creates an inherent inequality between parents.

Out With the Old: Different Rules for Mums and Dads

In the far-off “bad old days”, many expectant mothers had no job security or entitlement to maternity leave.

That gradually changed for the better over many years, but even after a general entitlement to maternity leave was introduced, it was – as the name suggests – available to women only.

Then in 2020 came the brand-new and widely welcomed concept of “parental leave”, which brought fathers (and other non-birth parents) into the fold.

It was ground-breaking at the time but still not perfect. While biological birth mothers were entitled to maternity leave of at least four consecutive months, fathers (and other non-birth parents) got parental leave of only ten consecutive days.

Adoptive leave and commissioning (surrogacy) leave were ten weeks for one parent but only ten days for the other. The UIF Act inevitably mirrored these inequalities.

In With the New: Parity for Parents

The High Court found these discrepancies to be unconstitutional, and the Constitutional Court has now agreed.

It’s given Parliament 36 months to sort out the invalid provisions (new legislation is reportedly already in the pipeline), and in the interim the following changes apply:

1. One Parent Employed

Where only one parent is employed, or in the case of a single parent, that parent gets the full four consecutive months’ leave.

If the parent is an expectant mother, she can start her leave up to four weeks pre-birth (or earlier if medically certified). Otherwise, it starts on the day of birth.

2. Both Parents Employed

Where both parents are employed, they get a total of four months and ten days of parental leave – the sum of what used to be the mother’s four months and the father’s ten days.

This total can be shared between them as they agree, taking it:

Consecutively (one after the other), or
Concurrently (together), or
A mix of consecutive and concurrent.

However they split it, each must take their portion of leave in one single sequence of days.

If they can’t agree on the split, it must be as close as possible to 50/50.

Shared leave must be completed within the four-month period.

3. Compulsory Periods

There are no changes to the compulsory no-work period for the birth mother – a six-week recovery period after birth during which she may not work unless medically cleared.

In the event of either a miscarriage during the third trimester, or a stillbirth, the birth mother must get the same six-week recovery period.

4. Adoptive and Commissioning (Surrogacy) Leave

The same equal splits now apply to all parents – natural, adoptive and commissioning.

A provision limiting adoptive leave to children under two years old was declared invalid and unconstitutional, but remains in place for now, with the Court leaving Parliament to decide on an appropriate age limit.

5. Other “Parties to a Parental Relationship”

Leave in the shared pool applies only to “parties to a parental relationship”, defined as people who have assumed parental rights and responsibilities under the Children’s Act.

6. Notice to Employer

Employed parents must still give their employers at least four weeks’ notice (some sections refer to “one month” – just to confuse the issue!) of their intention to take leave.

If that’s not practical, notice must be given “as soon as reasonably practicable.”

Are You Entitled to Paid Leave, and What About UIF?

Although you now have extended job security protection, you are still not entitled to paid parental leave unless:

Your employment contract provides for it,
Your company policy allows for it, or
A collective agreement covers it.

(These are more common in larger corporates.)

The better news is that the UIF allows you to claim for maternity and parental leave benefits, but currently still with restrictions mirroring the BCEA’s.

The Court declared the relevant sections of the UIF Act invalid, but again left it to Parliament to sort out, so nothing changes there for now.

An Important Note for Employers

Review all your employment contracts, company policies and procedures to ensure compliance with these new rules.

Communicate them clearly to your employees to prevent misunderstandings and unrealistic expectations – especially since not all media reports and online articles on this topic are accurate!

Wedding Bells? You Can Both Choose Your Own Surnames Now

“A family name holds the music of generations – it’s the first inheritance we receive.”
(Attributed to Irish poet-philosopher John O’Donohue)

The Constitutional Court has just confirmed (with some significant adjustments) last year’s High Court ruling that both partners in a marriage have equal rights to choose their surname.

Previously, a woman – and only a woman – could choose when marrying to take her spouse’s surname, or to retain her own surname, or to assume a double-barrelled surname (her own surname with her husband’s surname).

However, if a man wanted to do the same – to adopt his wife’s surname or a double-barrelled surname – he had to apply formally to the Department of Home Affairs (DHA) and provide “good and sufficient reason” for wanting to change. The problem was that the reason had to be related to “a change in the marital status of a woman” – an impossible ask for men.

A Tale of Two Couples

The Constitutional Court, and the High Court before it, grappled with this issue via applications from two couples whose attempts to depart from the “only women can choose” rule had been thwarted by the existing wording of the Births and Deaths Registration Act.

The couples’ reasons for wanting to depart from the norm will ring a bell with many. One couple wanted their new family to bear the wife’s maiden name as it symbolized her connection to her parents, who had died when she was young. The other wanted both spouses to use a combined (double-barrelled) name so that the wife’s maiden name, which was important to her, would not be lost.

Our apex court has now confirmed that this unequal treatment was unconstitutional because it discriminated on the basis of gender, infringing on their rights to equality and dignity.

So, What Are Your Choices Now?

In a nutshell, the Court’s order employs gender-neutral language to ensure that everyone, regardless of gender or type of marriage, now has the same automatic rights when it comes to assuming a new surname.

Although the declaration of invalidity is suspended for 24 months to enable Parliament to either amend existing legislation or pass new legislation, the Court’s ruling includes the provision that in the interim everyone can, as of right and without needing DHA authority:

After marriage, take their spouse’s surname or, having taken it, resume a previous surname.
After marriage, divorce, or the death of a spouse, resume a previous surname or create a double-barrelled surname.

Any other surname changes (including changes to your children’s surnames) still require formal application to the DHA.

To avoid any confusion, it’s a good idea to tell the marriage officer before you marry what names you’ve chosen so that the correct choices appear in the marriage register and on your marriage certificate.

As 1 December Looms, Here’s What AARTO Means for Motorists and Employers

“Forewarned is forearmed.” — Wise old proverb

Government keeps assuring us that the long-delayed AARTO (Administrative Adjudication of Road Traffic Offences) system will finally begin its full national rollout on 1 December 2025.

Is This Another False Start or the Real Thing This Time?

There have been so many false starts to AARTO over the last fifteen years that many of us will no doubt take the attitude: “I’ll believe it when I see it.”

Particularly with all the speculation that the implementation could be delayed, varied, or even blocked again by legal and other challenges.

But let’s not be caught unawares here – this time, the first phase really could be shooting out of the starting blocks on time. It seems a good idea to start prepping for the changes, especially now that the holiday season, with its surge in year-end travel, speed trapping and roadblocks, is almost upon us.

In a nutshell, the way traffic fines work is about to change for millions of drivers — including private motorists, fleet operators, delivery drivers, taxi operators, and vehicle owners.

Firstly, Driver Demerits Are Still Nine Months Away

Sensational, click-bait headlines and fake news reports notwithstanding, the “driver demerit points” system — with its licence suspensions and cancellations for repeat offenders — is only scheduled to kick in on 1 September 2026.

So What Will Actually Change on 1 December?

If your vehicle is registered in, or if you drive in, any of the 69 major municipalities and metros scheduled for commencement on 1 December 2025, you’ll be subject to these new rules from day one.

The other 144 areas are set to commence on 1 April 2026.

Fines Will Become Administrative, Not Criminal

Traffic infringements such as speeding, traffic light violations, licence issues, parking offences, and so on will no longer be handled in criminal courts.
Instead, the Road Traffic Infringement Agency (RTIA) will run everything as an administrative process.

Electronic Notices

Infringement notices, courtesy letters, and enforcement orders can now be sent by email or SMS (even by fax if you still list a number) as well as by post or personal service.

Not receiving notices will not be a defence – legal service will be deemed to have been made whether you receive/open them or not.

The onus is on you to make sure you get them by updating all your contact details with your licensing authority now – and by configuring your spam and junk filters to let them through.

Discounts and Deadlines

A 50% discount will be your reward for paying within 32 days of receiving an Infringement Notice.
Miss that window and you lose the discount.

You may then get a Courtesy Letter allowing you another 32 days to pay the full fine plus a fee.
If you still don’t pay, an Enforcement Order is issued.

Enforcement Orders Will Block Licence and Permit Renewals

Unpaid fines that reach the enforcement order stage are recorded on the National Contraventions Register.

If your name appears on the register, you will be automatically blocked from:

Registering a vehicle, and
Renewing your vehicle licence disc or driver’s licence/professional driving permit.

If You Aren’t the Driver

You must nominate the actual driver within 32 days to prevent the fine being attached to you.

Keep a copy of all drivers’ licences so you have a record of the infringer’s full names and ID number.

Businesses in particular should be able to identify the drivers of their vehicles at all times so that fines can be allocated correctly.

Also, review all your staff training processes, vehicle policies, and disciplinary procedures accordingly.

Beware of Scammers

Scammers are reportedly already issuing fake notices, so be sure to pay only on authorised payment portals.

Know Your Rights – But Act Quickly

You can still make representations or appeal against fines you disagree with, but strict deadlines apply.

Johannesburg and Tshwane Motorists

Note that although Johannesburg and Tshwane motorists have already lived with AARTO’s pilot fine system for years, from 1 December 2025 they will move onto the amended national AARTO framework.

You can expect:

Stricter electronic service of notices
Updated fine tariffs
Stronger enforcement order blocks on licence renewals
New proxy nomination duties

Bottom Line

If you need our help with anything, please get in touch immediately!

Legal Speak Made Easy

“Title Deed”

A property’s title deed (more formally, deed of transfer) is the legal document that proves ownership of immovable property (land, house, sectional title unit etc). It’s issued by the local Deeds Office, and contains detailed information about the property – owner/s, size and description, purchase details, mortgage bonds, servitudes etc.

You’ll need your property’s original title deed when you come to sell or get a home loan, so keep track of it. If your property is bonded, the bank will have it. Otherwise it’s up to you to keep it safe!

It’s possible to replace a lost title deed, but that will cause unnecessary delay in the transfer process.