Browse Forums General Discussion 1 Oct 25, 2010 1:25 pm Our builder has, two-thirds into the job, discovered he's left out some money (gst/margin) on his estimate (which we used to get finance from the bank). If he had come to us with the correct estimate in the first place we would have cut things out to suit the budget. However, now we're so far into the project, there's very little to take out. He says according to the builder's contract we have to pay him the money, but we're not sure the bank will lend us the extra funds now. He wants us to sign a contract saying we'll sell the house in order to repay the funds if the bank won't lend us the money. I feel he should come to the party and at least only charge us half, seeing as it was his mistake. Even if the bank does approve the funds, we will have a huge mortgage because of his mistake and this will impact on us for a very long time. Has anyone had a similar experience and, if so, what did they do? Re: Cost of building 3Oct 25, 2010 1:52 pm I wouldn't be signing anything like that! The whole thing sounds very unusual. How can a builder forget gst and margin? Metricon Riva 33 - http://herlihy-riva.blogspot.com Site start 15/03/2010 - Handover 23/12/2010 9 months and 8 days (284 calendar days) from site start to handover Re: Cost of building 4Oct 25, 2010 1:58 pm Are you talking about builders indemnity insurance? We paid this as part of the contract - this I thought just protected us in case the builder didn't finish the job. Can we make a claim to his insurance company for the extra funds? Re: Cost of building 5Oct 25, 2010 1:58 pm lisa10 Our builder has, two-thirds into the job, discovered he's left out some money (gst/margin) on his estimate (which we used to get finance from the bank). If he had come to us with the correct estimate in the first place we would have cut things out to suit the budget. However, now we're so far into the project, there's very little to take out. He says according to the builder's contract we have to pay him the money, but we're not sure the bank will lend us the extra funds now. He wants us to sign a contract saying we'll sell the house in order to repay the funds if the bank won't lend us the money. I feel he should come to the party and at least only charge us half, seeing as it was his mistake. Even if the bank does approve the funds, we will have a huge mortgage because of his mistake and this will impact on us for a very long time. Has anyone had a similar experience and, if so, what did they do? Speak to a solicitor ASAP! This sounds *******! You and the builder have a contract I assume which should set out the amounts due and payable and when they are due-said contract is binding as far as I know and if he's c@cked up, that's his problem! Deemaree Kyndylan Capers: viewtopic.php?f=36&t=46852 My blog: http://www.sufficientlysufficient.blogspot.com/ Re: Cost of building 6Oct 25, 2010 2:02 pm Deemaree Speak to a solicitor ASAP! This sounds *******! You and the builder have a contract I assume which should set out the amounts due and payable and when they are due-said contract is binding as far as I know and if he's c@cked up, that's his problem! +1 'A bottle of wine contains more philosophy than all the books in the world.' Louis Pasteur Vegie garden: viewtopic.php?f=19&t=27637&start=0 My Backyard Adventure Re: Cost of building 7Oct 25, 2010 2:03 pm I know, this is the third house we have built so I am fully aware of all the problems that can occur, like defects, builder not finishing the job, etc, etc, but I have never come up against this. Talk about hopeless economic management. My argument is that his first estimate dictated our budget and we built accordingly -had I known beforehand that it was going to actually cost $100,000 more, we would have definitely changed the scope! Perhaps I need some legal advice....those general building contracts really just protect the builder. Re: Cost of building 8Oct 25, 2010 2:10 pm True, however our contract is a cost-plus contract, not a fixed price, so the total amount was never set in stone. However, we did get approval from the bank for up to a certain amount based on his estimate, and it's not a cost blow out, it's an administrative mistake on his behalf. Whatever happened to if you make a mistake, you deal the consequences??!! He is totally absolving himself of any responsibility in this matter, financial or otherwise. Re: Cost of building 9Oct 25, 2010 2:18 pm All his pricing especially in contracts etc should say "+ gst" if not included. Re: Cost of building 10Oct 25, 2010 7:20 pm Until I read your last post, I was going to ask if it was a fixed price or cost plus contract. You can seek legal advice, but cost plus is always going to be a risky position to put yourself in. No figures are known until it's all calculated at the end. Maybe just compare your final project to similar recently completed projects. If it is close, then you should feel slightly satisfied. I'm very suprised the bank lent based on an cost plus estimate and not a fixed price contract. Re: Cost of building 11Oct 25, 2010 9:38 pm SOLICITOR or FAIR TRADING ASAP!!! I had the opposite thing recently where builder forgot to include something I did want, i.e. floors, and when I tried to have them included at the late stage after I found out I was told it was not possible without a contract variation and this would effect eligibility for FHOG, etc as it would change the date of signing. Maybe start with Fair Trading to get free advice and point you in the right direction, but anytime I've received an invoice where GST isn't in the final price it states plus GST. But also for him to try to hassle you into signing a contract must be a breach of some law somewhere, so I wouldn't sign anything until I spoke to a solicitor. Estrela81 Now Building the Allworth Concerto in Spring Farm http://apollolandinginspringfarm.blogspot.com/ Re: Cost of building 12Oct 25, 2010 9:48 pm There really are some terrible situations out there - it seems there is a body to protect builders, but nothing for us (except expensive lawyers!) Thanks for all your responses everyone. I think we will get legal advice and no, we're not signing anything! Good luck with your new homes! multiple occ properties are always billed by trades at a premium, rarely per sqm for the lot. You either have trades you know whoe will do by sqm or youre going to get… 1 7565 We are getting the same kinds of figures. 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