Clarendon demands money on top of the $4000 when I cancelled

Hi everyone,

I have been with this forum for a few months now and find it very friendly and helpful. Thanks for all the people who have taken the time to post and share the expereince and knowledge.

This is the first time I post as I really need some advises. Can someone please help me with my problem below?

We paid the remaining of the deposit to a total of $4000 to Clarendon back in May 2009 for building our first home with them.

We signed a "Deposit Tender" in June. After that, during the external color selection phase, we discoverred some flaws with the designs and requested changes via emails and phone calls. We were aware and fine with the fact that changes after this stage would incur some cost for redrawing etc...

The process at this point was painful as Clarendon had not been as responsive as the period before we signed the Tender. The feeling has been they tried to talk us out of the any further changes from this point. Some changes were critical i.e. we had an extra car space next to the garage and the driveway was drawn in a way that it would be almost impossible to park a car in the extra car space or the garage on the other end...

The suboptimal design, the lack of responses and many bad reviews we have read about Clarendon Homes prompted us to cancel.

We sent an email to cancel in August. At this stage, Clarendon was waiting for us to select the external colors, so the plan has not been finalised and submitted to Council yet.

We were prepared to loose $4000 as we figured out it would be more important to have a good design and loose $4000 now rather than sorry later as we will have to live in it for a long time.

We did not expect that Clarendon Homes sent us an invoice asking us to pay an extra $2199.26 to cover their cost to this point.

The invoice lists the following items:
Surveyor: 1565.30
Energy Assessment: 330.00
Engineer: 1441.00
Water Authority: 273.46
Private Certifier: 544.50
Stormwater Consultant: 605.00
Administration Fee: 1000
Total: 6199.26
Paid: 4000
Invoice Amount: $2199.26 to be paid to Clarendon Homes.

My question is is it fair and legal that Clarendon can demand this amount of money on top of the deposit of $4000?

We have lost $4000 and a lot of time. Clarendon too but $4000 deposit should legally cover this cost? That was legally, morally, I beleive the $4000 has not been spent as it is meant to cover council submission to approval but the plan has not been submitted so Clarendon should respect consumer's choice not to choose them and refund us back the unused money.

Has anyone gone through the same thing before and can give me some advises. Is what Clarendon Homes demanding correct?

P.S we are now looking at building with another builder (paid another $4000 with this builder) and I did tell Clarendon about this.

Have a good weekend and thanks in advance for any advises you might have for me.

Regards

Hi synthman,
We also cancelled with Clarendon, but we were a lot further along than you are. We had a DA approved with council & then they gave us a variation for a water tank & the cost was a whopping $23,000 & they also wanted us to sign a variation that if they damaged any adjoining properties whilst they were building our house it was at our expense to pay for the repairs to the neighbours properties.
We argued with them for weeks about getting both variations changed but the would not budge on either, so we had no other choice but to find another builder.
That was after 9 month & $4000, they didn't ask us for any other money in fact we never heard from them again.
Good luck with it I would just ignore them, just like they do to you & see what comes of it.

Hi Danma,
Thanks a lot for your advise. It has made us feel better as it seems that our thinking/frustration is not wrong...

With regards to your story, I could not beleive a builder would come up with such a variation clause! Asking the owner to be responsible for the builder's skill and work!

Danma, thanks again for sharing!

Regards,
Synthman

Hi synthman,
Just came across this interesting story and I'm wondering how did you go with this issue? Are they hassling you?? (hehehe good advice - do to them what they do to you - just ignore them, )
BTW, this is strange to me: At the stage when you pulled out, ie. not even at Council yet - they have allegedly alrady spent that money on all of the services listed. For example, the PCA - what would the PCA need to do at this early stage ?!?!? The plans haven't even been submitted to the council yet, and their PCA is already involved??? Odd ...
Cheers

We're still waiting for a quote from them for a house design we liked back in June...luckily we decided to cut our losses after waiting 4 weeks. We had one email from the sales consultant saying he would send us the quote in the next few days.....never heard from him again.

Hope you get/got your issue resolved.

Depends on the contract - does it cover $1,000 admin? This is not a real cost as Claredon have to pay their staff anyway. For other costs, I would ask for itemised receipts from their suppliers.

We too had bad experiences with the first builder we were going to go with. Decided to cut our losses and move on - best move we made. Hopefully you can move forward without hearing anything further from them!!

This is the latest update.

As there was no contact details on the letter (it was written by an Office Admin without signing), I had to make a contact via the orginal Sales person at the display centre. He said he could not do much but would forward my email inquiry to his manager. That was 14 days ago. When I followed up last Saturday, he said he was on leave and would follow up today.

Thanks all for sharing your experience.

Post from Free Will was interesting as I don't think $1000 was mentioned anywhere on the Tender.

Lex, like yourself, I was wondering whether all money has been spent at this early stage in my case (I did raise this in my email to the Sales person). I can understand that they had spent time talking to me, going over the changes to the designs, seeing me at their head office etc...that equates to a loss for them compared to the profit they would have earned if I went ahead all the way...but that is part of the cost for conducting a business anyway I would have thought. There is no clauses stating that once you have paid a deposit of $4000, you can not pull out does not matter whether you like to proceed or not, whether you discover flaws in the design or the way the builder conduct business, or you will be billed for losses...This is odd to me...I work for a business too and customers have the right to walk away. We then attempt to contact the customers to find out the reasons, calm them down, match competitor's offers, resolve conflicts etc...for the purpose of improving the competitiveness of our business. We don't send our customer a bill on top of the deposit they have lost, just because they cancel. They legally will loose the non-refundable deposit but in many cases, the deposit is refunded if it was our fault that we had caused this customer to walk away...Oh, in other cases, we had to compensate for the customer's losses...I think we are in an over regulated business anyway but that is good for the general consumers who may be victims of hungry businesses. Perhaps we need similar regulation for the project homes building industry?

Anyway, I will eventually at one stage, request them to itemise and supply invoices for the charges that they are claiming.

I hope to be able to move on without any hassle.

P.S I have noticed that they have just increased the deposit from $4000 to $5000 or $6000. Please look at their website. This may be the result of dealing with many cancelling customers and I am just one of these. To me, this is a good action on their part. If they decide that it costs them 5 or 6k each time a customer walks away then it should be stated upfront like this.

This is not how things work in this bloody industry. Having 15+ years of experience in IT where the customer is a king I was thrilled and shocked by the absence of customer service (at least in the form I'm used to deliver and receive it). My Clarendon tender presenter was just a piece of rotten turd to put it in plain English. I was going to pull off and disengage, however, thanks to this forum, after reading others' experiences I understood that the problems happen plus quite often we have unrealistic expectations. Currently I'm quite happily building a house with Clarendon and so far so good.. But yeah, the tender was a nightmare and a way to test if I had nerves of steel or not....

ebyelyakov, yes you have described exactly how I feel. Agreed that I may have to lower my expectation when dealing with this industry...

All the best with your home with Clarendon...

I have nothing to complaint about the builder that I am looking at building with so far...

I suggest making a complaint to consumer affairs in your state (actually I suggest everyone that is having issues with their builder to do this - they log the number of complaints directed about a particular company or industry and if a pattern of issues emerges they step in to investigate and regulate the industry). They might not be able to help you directly but the more people with legitimate concerns about how builders are running their business the more likely something is to be done about the rampant issues in the industry... it certainly has made a huge difference in the way cars and holidays are now advertised.

... After my building nightmare with the Big M I spoke to them and they pointed me in the direction of some very helpful free legal advice regarding contract and consumer law and they helped me draft a letter and gave me advice on the "what to do next" steps if it was ignored.

Good luck - I hope this works out for you

Sorry to hear about your ordeal. I paid my deposit 3x to 3 different builders and I learnt that if the builder demands a higher than expected deposit, it's best not to proceed.

$1000 to Metricon - only to get it back after I threaten to file a misleading sales practises complaint to Consumer Affairs. The soil test report was done by then and I was scheduled for color/fittings selections. The changes to the plan I wanted were almost all knocked back by Metricon Drafting Dept. I was no push-over when the sales consultant told me she was not the one to approve changes.

$2500 to Ashford Homes - never got it back.
Filed complaint to Consumer Affairs and BACV but to no avail as Ashford Homes produced paperwork to back that it spent the money on soil test report, contour survey, rescode compliance, drafting of plans, site investigation for service requirements. In fact, I was told I had to pay extra $1000 on top of the $2500 to get tender documents prepared. Ashford took 6-months to prepare tender documents and back-flipped on the $150 pw compensation for per week building delay. I got cold feet and terminated further dealings.

$1500 to Simonds Homes - so far so good. I think it all boils down who handles your file, the SS assigned to you and how much "fingerwork", footwork you do. I am getting my own independent builder inspector to check the stages.

[quote="rocketleaves"] I paid my deposit 3x to 3 different builders...

I am glad to hear you are going well so far with the last builder. I used to feel bad about the deposit money we had lost as it is a sizeable amount to us but thinking a bit more about this, a small loss now but likely will result in greater benefits in the long term...

I have just followed up with the sales person and have not heard back from him yet.

Hi everyone,
I am pleased to report a happy ending to this story. Just before Christmas, Clarendon Homes sent me a letter advising that I did not have to pay any extra money on top of the $4000 deposit.

Great stuff, synthman, and thanks for the update!! And good on Clarendon!!! Fantastic!

that's graet synth - although I thought their $1K admin fee was a bit of a giggle!!!
builders really do try it on don't they.

good luck with your next venture...