Pulling out of HIA

Hi there

We were all set to build however due to the market and financial reasons we needed to terminate our contract with our builder.

According to our HIA contract, we were able to terminate our contract but will lost money’s spent to day + 20% margin.

So far we had done the following:
- Paid 5% deposit ($18,989)
- Had draft drawings done with minor changes
- Had colour selection appt (2 hours)
- Drafts were then sent to developer
- Variations sent to us to sign (based on council wanting letterbox on plans etc. - no fault of ours).

Upon requesting to terminate, the builder sent us the following cost schedule:

Contract:
Drafting: $2,750
Estimating: $1,150
Administration(Building Co-ordinator): $1,050
Colour Selection Appointment/Documentation $1,250
Sales/Colour Commission: $3,022.19
6 Star energy: $330
HIA Building Contract: $19

Total cost to date including Builders margin @ 20% as per schedule 1, item 6 (refer 19.4) TOTAL: 11,963.988

Is this unreasonable for what we had actually done with them? I’m not sure about the commission... also $1,250 for a colour appt? We were there for 2 hours and the paperwork was sent to us that day! Nice pay for a few hours work.

Our mortgage broker suggests we are being ripped off and to go to VCAT.. our conveyancer says it’s about 3% of building cost and is kind of fair enough..

I am thinking maybe we shouldn’t poke the bear and be happy with our +$6k refund.. or should we go and ask some questions?

(Please note we are first home buyers and were mislead with our land, we were able to get out of our land contract and lost $1,500 to the land.. and the builder has been understanding and not argued with us at all, just sent us the cost schedule and said we could have a cheque for refund in 2 weeks).

I’ll just add: we didn’t have any access to any build portal systems yet, nor had we set a build date with them as land had not yet titled. No soil report done etc.

It's all fair to be honest.

It's really up to them, you're jumping out of the contract. They need to cover their costs and make a margin as any business would.

LOL. The Kelly gang lives,
Why should you have to pay the sales commission ( a bit too Rich)... what sale?
That is one for the ACCC
Australian Competition and consumer Commission Complaints

Seriously I can't see how it's your fault and why you are penalised
If the Government can't protect innocent First Home Buyers
Then this matter needs to go much higher. BTW
there would be tens of thousands of FHB affected in a similar way
Absolute outrage!

since you say it only adds up to around 3% of build cost I'd say it's fair enough. You might be able to push that lower, might. But if you do that you basically destroy the relationship with that builder and realistically when you consider the amount of time you will spend thinking and doing things to get more money back it's probably not going to be worth it overall.