New Homes Contract - Is this normal?

Hi All,

We are first time home builders and are going through a volume builder. We have just been presented with our final contract which is based on the HIA standard contract. The builder included their section for the new home estimate etc. We noticed that there were some items incorrect and needed to be adjusted. The builder said this will be done via a variation after we sign the contract. Also, there were some errors with the plan (extra powerpoints, light points etc that should of been removed..), but we were reassured that the final plans are the ones that need to be 100% correct. The final item was that there was no engineering plans (slab/footings..) in the contract. The builder said this will come afterwards and as such we still have a provisional sum for our slab despite soil tests and surveys being done. Is this normal practice or should the contract be 100% correct with engineering specifications/drawings etc... ? I understand each builder may do things differently, just wondering if I should be worried about this or it's just part of the process...

By the sound of it I would be waiting until more details are available before I sign.

Although it is usual to have a provisional sum for rock (and sometimes for the amount of piering) the basic foundation price should have been calculated.

Unfortunately it’s part of their process but it doesn’t have to part of yours.

Don't sign the contract till its complete and correct, they are rushing you into signing so they have another build on their books.
I just don’t get it, how hard is it for volume builders who employee staff specifically for contract administration to get the $#*$&@ contracts right!!!!
Having an accurate set of plans at the contract signing stage is also critical for estimating the price, if the plans are incorrect then there’s a good chance the estimate is incorrect as well (the software that’s used to design with is also used for the estimate, directly or indirectly).

Once the contract is signed any changes have to be administered by their favourite tool, the Post Contract Variation (PCV). Some, if not all, volume builders charge admin fees for PCV's and you are also locked into the price that they come back with, e.g. if you want a fireplace after signing the contract the builder can change anything they want and you'll either accept it or go without. Ask for the fireplace prior to signing and you still have the bargaining power.

As bashworth has said, provisional sums for unknowns like rock having to be dug out is normal, provisional sums for foundations is ridiculous.

Dig your heels in and let them know in no uncertain terms that you will not sign till the contract is right – how they react to this will also give you a good indication of what they will be like to deal with if you do choose to build with them.

By the sound of it so far, unless the layout is perfect for you and the price is great, I’d be running a mile.

From what I can gather, estimations have been done based on the soil report and survey. Piering has been proposed and estimate pricing for the upgraded slab with piering has been provided. They are saying, the final amounts won't be known until the engineering plans have been drawn up... which is the next stage. To be honest, I though engineering plans would be included as part of the contract and not something that is done afterwards or do volume builders only invest the time/effort in putting together these plans once they know they have a sale locked in?

You've got it in one.

It took the engineer 4 revisions to get the design of the foundation right for my new build - all done prior to signing the contract. When we did sign we knew exactly how many piers were going in, how many trenches to be dug, how much soil to be removed, how much concrete to be ordered, etc. and most importantly, the cost of it all.

As I've said, tell them you will not sign unless the contract is complete.

I wouldn't sign when I know details are incorrect. I'd also insist on engineering to be completed as your contract price could rise substantially if the engineer determines more piers are required than the builder estimated. They can correct the errors in a day. The engineering shouldn't take long either.

Remember you are signing your acceptance of what has been documented within the contract. If you know it is incorrect, then why would you sign it?

If I were you stop don't sign anything don't believe their bull$76 I'd pay the money see a recommended solicitor not there's . The contract will have clauses to suit them and not you, verbal agreements are useless don't let them pressure you into signing anything. Also I'd get an independent building inspector to oversee the build pay the $$ let them bat for you and having said that builders today don't give a rats a$&7 about there clients especially the volume builders, remember it's your hard earned $$ stand your ground

My 2 bobs worth good luck

Dont sign. Make sure the plans are spot on first.

Although we built 5 years ago, it may still be the same, but it also may depend on who you build with and whether there is a house to be demolished in the way of final soil/survey tests, hence only prelim ones.

We signed our contract in August, knowing full well it wasn't 100% correct, but our builder had to put in a variation (at no cost to us) as there was a house on the land, and they had to do another soil test once it had been demolished. We added lots more things to this variation without paying the fee. If they don't NEED to put in a variation and end up doing one due to changes, then you probably will have to pay a fee for the changes...check with them!

The house was demolished in October and the soil tests done soon after. Then what followed was a lot of waiting after the variation went through and a few admin stuff ups. Eventually we received our final drawings (the ones that MUST be correct) in early December...with many mistakes. 6 sets of drawings backwards and forwards later, we finally signed on 22nd December...and had to wait until Feb before they could start

If you can be assured that any changes that have to be made AFTER contract signing you don't have to pay the variation fee for, then I'd happily sign again (particularly when things are clearly outlined in that contract but do not appear on your final drawings (ie; their mistakes)). Just make sure EVERYTHING you want is in that contract before you sign, then they have no argument if the final drawings are wrong and you can prove it's on the contract. Just don't sign those final drawings unless they are 100% correct.

Double check with them, and get it in WRITING about the the variation, and whether you have to pay for it, or not if one has to be done after contract signing.

I hope I haven't confused you more!

Buy the time we signed the Full contract (HIA etc) everything had been through the council, waterboard approvals etc. This meant all selections, electricials, colours, upgrades etc had all been selected and costed.