Builders additional cost

I have a question I wanted to get a perspective of from a builder/ someone running multiple people as a trade.

I am building a new custom home with a cost plus arrangement.

Builders margin has and is secured from the get go so he’s safe. Circa 10% on a $1mil build

We’ve been flexible with one another the whole way and we’re a week away from handover

Hasn’t charged me variations but we’ve also put in ALOT of work.

I have transparency on every single invoice
In what’s been spent to the cent.

My question is:

Builder wants to charge me for the supervisors work in his carpenter capacity for undergoiing work we would’ve had to get a separate carpenter for and charge.

I am a week away from handover.

On one hand I see this as the builder double dipping. On the other hand I can sort of understand as I wouldve been up for the costs regardless.

Any thoughts appreciated.

Hey Kuno welcome to the forum.

I am a builder based in Sydney, Currently have 10 builds underway, 9 as fixed cost and 1 as a cost plus ( for some perspective).

For our cost plus build and this is the first one we have done, the owner is heavily involved as well and we get his approval on every single item before we spend any money. And whilst our margin of 15% is guaranteed there is a lot of extra work going through this process.

This is an incredibly difficult site on the edge of a cliff overlooking the harbour. Like we dug and poured a pool on ontop of an 8 m high drop and had to crane machines in.

I only say this as background to explain that this is a job that needs full time supervision, however the owner hasn't wanted to spend that money yet. At some point in the future he may. And this is a real balance as at the start of the job we had a verbal agreement to put a foreman on full time but that hasnt happened yet.

So my partner and I are doing our best to supervise ( whilst running 9 other jobs) and the client is helping out as well, but we don't charge him for our time to attend site. We see that as part of our 15% margin.

However, if I was to do some carpentry work for him in lieu of having a contractor do the work I would tell him that I would be charging him for my time before doing the work and then allow him the option of having me do the work or someone else.

So if he has done work that you would have otherwise had to pay someone else, then it is probably fair to pay him.

If it is just him organising and supervising then no don't pay him.

FYI 10% is a pretty cheap rate for cost plus, up here a lot of builders are charging 20% so you probably have a good deal.

All the best

I hope this helps

Cheers

Simeon

Hi Simeon,

Thanks for the detailed background
And your thoughts on the situation.

I am told there is a list that’s detailed with the work that was done so it’s seems fair from that perspective but at the same time, I doubt the builder is passing that money onto the supervisor/ carpenter hence the double dipping.

Thanks again

So if it seems fair what is the issue?
It seems you want to pay because it’s fair but you don’t want to pay out of principle.

How much is the invoice? Ball park…..

Kuno

Thanks for your response.

You are close to the situation and the builder so my best advice is to do whatever it is you think is fair and reasonable.

Have a chat to your builder and pass on your concerns and I am sure you will both come to a reasonable outcome. The main thing is to communicate.

All the best

Simeon