Late Start Date Fee Incured - Porter Davis

I was wondering if anyone could provide any feedback on this little piece of information I was just advised by PD. We have just heard that our land won’t be ready in time for PD to start building to the agreed start date (agreed meaning the approx date we were given by the developers of the land). The developers have now advised that it will be another month and PD is now charging us $1000 for that.

Can anyone please provide any feedback on this, has it happened to you ?

Thanks

Hi Gemini67.

Looks like you're not the only one with this problem. Check this thread out...

http://forum.homeone.com.au/viewtopic.php?t=2982

Cheers,
Mike.

Our site start was for June 06 but our land didnt settle till end of July, then we had some hiccups with finance (not our fault), we started mid September,we never got charged anymore than initial $600.

Sounds suss?

I have been having this argument with PD as indicated in the post supplied.

What estate are you building in. I would be intrested to see if it is simlar direction to mine. Iam in Inisfail in point cook.

They do say they charge $1000 per month late but I have not signed my Tender documents as yet and will be taking this up with them furthure on the day and getting something written in this to guarantee me the price quoted.

I purchased a house and land package so if it is late it is their problem.

Does it say anywhere in your signed documents that you have to pay $1000 if the title is not ready if it doesnt I would not pay them.

also ask them how they come up with this figure as I would love to know as they would not ansrew me.

I let it go and thought I will let them prepare Tender and then discuss it face to face when they have put more work into the project

Thanks for the reply Stevec

Ok we are building in Lyndhurst.
Secondly I have read the tender doc, the HIA housing contract and any document that PD have provided us and not once does it mention ANYTHING about charging due to late start date. Not even ANYTHING that remotely relates to start date. Yes there is a 'August approximate start' but thats it.
Each time I have been talking to our PD rep about the land and that fact that it's still a paddock there not not been ANY mention of this until now.

You mentioned that "They do say they charge $1000 per month late", can you advise where you saw this?

And don't worry I will be asking those questions tomorrow !!

Thanks again

Not written anywhere just what my sales rep told me. I had a $3000 allowance for a Jan start in my sales quote which is suppose to be a $3000 price capping allowance if the price of the house rose. Which it has. This meant that I would not be more than $3000 extra. They have not said anything about if it started after Jan what chargers they would impose

One thing I can guarantee if it is not on my contract I would not pay it. They cannot make you do anything that is not signed on the contract and I would tell them to go jump if they tried it.

Simply say NO. Refer contract

Your not wrong, there is no way I am paying for something thats totally out of my control. Yes my PD rep said something to me about the price of the house has gone up, but like you said we have also signed a fixed price contract.

It's as if they are saying, ok the price of the house has gone up since we signed our contract, ok great, heres a loop hole we can recover some of that by slugging them as the land is not ready.......what a crock !

I may be wrong, but I think the fixed price contract is subject to the agreed starting date (which is signed off at Tender appointment time).

If you can't start at the agreed time, and the costs have gone up, you might find that $1000 per month is actually less than the increases.

Something to think about.

Have you signed the contract yet?
If not, then there's a gray area for negotiation.
If you already signed, then it's a different issue, might need to get your solicitors involved...
If you bought it as land+house package, then why should you care? The builder should get that from the land developer isn't it??

PD - does it stand for Pricing Dilemmas??

Eimaj

Answers to the above questions

Yes contract has been signed
It wasn't a house and land contract, we bought the land ourselves separately.
And yeah I'm not starting to recall something relating to subject to the agreed starting date.

I;m still checking though.

my land is settled and paid for.have signed all my contracts with pd and my site start isnt till dec 31 this yr. pd have told me that if they cant start on that date and their are any price rises after that date i will incurr the extra costs. well its the holiday period and i cant see it happening but you never know. crossing my fingers they will get things started earler

How can you check if there is a price rise? Do you and the builder use one of the Australian Bureau of Statistics (ABS) building cost statistics or do you "trust" the builder. Any contract in which the supplier determines price rises is unfair and should, in my opinion, be cancelled on the basis that it is unfair since there is no method for you to independently check price rises (or it should be based on, or challenged, using ABS figures).

Why people sign contract in which builders have a blank cheque is beyond me.

Hmm did someone say breach of contract???

Just be nice, and let them know that your solicitors will be in touch if the fees are not waived....

If you visit the builder's display home or web site regularly, you will see the price adjusted every 3 to 4 months...

Interesting. What sort of price rises are you seeing?

By the way, this should still be checked against ABS figures since a good trick is to let old designs go by pushing up the price beyond what it should be. More revenue from late starters and those that have already purchased get a warm feeling from "knowing" that their house has appreciated.

Another thing to look out for is inclusions. The base price can go up and they can have a "promotion" with plenty of inclusions. If your price goes up you don't get the inclusions.

You never want to reduce prices since this reduces the sense of urgency that salespeople need to close a sale. Better to increase the price and include more.

Do you get the impression that I'm a cynic

Hey everyone, we are building with Henley and they would not commence until we gave them the copies of the section 32 and we need to provide a clear copy of title showing that we own the land before they will proceed any further than the tender stage.

How can you own land if it is not ready to build on? The titles would not be released and therefore are unable to be transfered to you and settled on? Isn't this the way it goes?

PD are obviously different to Henley.

So far average $2500 - $3000 every few months...


Good point, where do you get the ABS figures?

ahaung,

$2500 to $3000 every few months translates to about 10% per annum. Building costs are not going up that much.

You can get price statistics from the Australian Burea of Statistics (ABS) website www.abs.gov.au.

More specifically, the page with prices is:

www.abs.gov.au/AUSSTATS/abs@.nsf/ViewCo ... nd&Num=6.4

The series that will probably interest you the most are 6416.0 and 6427. Ignore any of the listed series that have dates that are more than a year ago - they have been discontinued and indcorprated elsewhere.

Cheers,
Casa