Provisional Sums in Contract - Verification of actual costs

We have some provisional sums in our contract for certain items, like installing a septic Tank. What should I expect from the builder to verify the costs I will actually be charged for these. Do they need to give me a copy of the quote from the subcontractor with their margin added? My concern is that the builder has now reached the end of contract date and have barely gotten the house past lockup, so they have several months of work left.. They now need to pay me $250 a week penalty. I am concerned they will just add the cost of the penalty payments to the provisional sum amounts so they dont end up out of pocket.

Under your domestic building contract, you are legally entitled to receive a copy of the invoices relating to all PS items 'as soon as practicable after receiving the invoice....' (refer to Section 23 of the Domestic Building Contracts 1995). Your contract is required to have a stated mark-up on PS items (usually 20% in VIC but as high as 30-35% in other states) so have a good read of your contract. Actually, having just read your build entry on H1, I would have a very good read of your contract particularly the bits about penalty provisions, time lost due to inclement weather (which your builder is normally allowed to claim for) and exit conditions.

Understand that you want your house built so it does put you in the tricky position of having to deal with the ugly side of any contract.

All I can suggest is several things

a) Remain calm and steady but firm when dealing with them, referring to the contract whenever necessary.
b) Put all communications to them in writing and use registered post if the relationship sours.
c) Live by the letter of the contract. Make sure you understand all the obligations on you. Make payment for each stage promptly but only when they are done to standards and been passed in writing by your building inspector.
d) Consider getting an independent building inspector if they start rushing things or start rejecting items when it comes to handover.
e) Only make final payment once all outstanding defects are complete.
f) Seek legal advice if its all too complicated.

Some links for you

Consumer Affairs VIC - building contract http://www.consumer.vic.gov.au/CA256EB5000644CE/page/Building+and+renovating-For+home+owners+and+buyers-Contracts+for+building+projects?OpenDocument&1=09-Building+and+renovating~&2=10-For+home+owners+and+buyers~&3=070-Contracts+for+building+projects~

and the Domestic Building Contract act http://www.legislation.vic.gov.au/Domino/Web_Notes/LDMS/LTObject_Store/LTObjSt5.nsf/DDE300B846EED9C7CA257616000A3571/E16B3B65AE7BB5E2CA25780E00113C36/$FILE/95-91aa070%20authorised.pdf

Good luck

RiH

Thanks for the information appreciate it. At the moment we have a very good relationship with the builder and prefer to keep it that way, its a difficult one for us as we dont want a rush job but we do want to see steady progress, which in the last month there has not been much of anything. I have kept track of any rain days where work would have been delayed and to be honest there were about 3, most of the rain we got was before they even started the build. Most of the time seems to be bad management. Not having materials on site, and doing the work single file. I think we will leave the haggling on the penalty payments etc until the end of the build, just needed to understand where We stood in case we need to use it remind them they need to get a move on.