Browse Forums General Discussion 1 Aug 05, 2013 11:15 pm My extension is being built under a fixed price contract with a Master Builder. The contract price includes $6,000 for electrical work (moving meter and switch board, adding a couple of down lights, and moving some power outlets). His electrician inspected the site prior to this price being quoted, and was up in the roof inspecting existing conditions. Since the work has begun, the builder has told me that the house's wiring is worse than they thought, and the whole house needs rewiring, and he wants me to sign a variation for an additional up to $5,000+, taking the cost of electrical work alone to over $11,000. This seemed excessive to me, so I got a quote from an independent electrician, and he has quoted me less than $6,000 all up (including the originally planned work and rewiring the whole house too). The master builder is not to willing to switch electrical subcontractor. He has told me that he is not legally obliged to. He is now threatening to cease work if I don't agree to the increased cost tomorrow. He knows that due to personal circumstances we cannot really afford delays with the project. I understand that Master Builders has a dispute resolution service, but I imagine that would cause delay too. I also imagine that hiring a lawyer would be expensive and not fast either. Can anyone advise what my best course of action is here? Re: Dispute with builder over increase to contract price. 2Aug 06, 2013 6:07 am It seems to me that the builder had the opportunity to inspect the house and assess what was required to construct your extension to compliance. On that basis don't sign anything. Builder does have the right to a variation if there are genuine unforeseen circumstances but he did inspect so it's builder's risk and another electrician exposed the variation price as not warranted. Just tell the builder he needs to finish for the price in the contract. Foremost Building Expert in Australia,assisting with building problems/disputes, building stage inspections,pre-contract review advice for peace of mind 200 blogs http://www.buildingexpert.net.au/blog Re: Dispute with builder over increase to contract price. 3Aug 06, 2013 7:54 am If you are in Victoria then it would be Consumer Affairs to contact - they have a building advice service that can act as a mediator when disputes happen, although they cannot make a Builder do anything. I would contact your Consumer Affairs or Fair Trading Office and get advice on your rights here. There are a few "Master Builders" out there who not very professional and do huge under quotes for work to get the clients in and then "notice" once the work has started that that the quotes were inadequate. In some states there are legal advice centres that can assist with queries - if you are in Vic i can find the link for you.
It may be that you might have to negotiate with the Builder about the costs. Make sure you understand what the costs are for. Maybe suggest that the builder remove any profit he will make from the extra work, since the error was his company/rep. Make sure you keep a record of all conversions with the Builder and their workers, take pictures of any work done (or not done), keep a build diary and confirm all discussions with the builder in writing (ie email). Re: Dispute with builder over increase to contract price. 4Aug 06, 2013 8:26 am Is this the same builder (and architect) who made a mistake with your wall? If it is, it sounds like he may be trying to recoup costs. Definitely follow Building Expert's advice. Re: Dispute with builder over increase to contract price. 5Aug 06, 2013 12:23 pm Also let this be a lesson to never get too friendly with contractor and let them in on personal details about your situation (work, personal, finacial, etc) because as this OP discovered, they can use it against you. Issue information on a need to know basis only. Re: Dispute with builder over increase to contract price. 6Aug 06, 2013 1:46 pm Good point, qebtel. Certainly something people should think about before signing up with any Builder that offers loans with renovation/building contracts. I have a friend who ended up paying heaps more for electrical than provided in the contract. The electrician would demand cash payments from them and threaten them if they didn't "pay up". The electrician also cut all the house's previous electrical wiring short (in an area not being renovated) so that it all had to be replaced - therefore more money for him. They had a fixed price contract too. Re: Dispute with builder over increase to contract price. 7Aug 07, 2013 12:10 am Thanks for the feedback everyone. @building-expert - The builder says that it was only after opening up some walls that the extent of the bad wiring could be seen. He says that there's newer wiring that is connected the the old stuff inside the walls. I suppose that's the basis on which he's claiming unforeseen circumstances. He will be replacing all wiring in the property, which was not part of original contract. I have tried to negotiate on the costs as kats_meow suggested, based on the independent quote I got. He has accounted for some of the difference in the quotes by saying that the original electrician's quote included his 30% "builders margin" on the quote, which would also be applied to any electrician's quote. I understand that the builders price for the project includes his costs for managing all subcontractors, so I presume that this is acceptable practice? He has offered to reduce the additional costs by $1,200, including waiving his builders margin on the additional work. A portion of the additional cost is "provisional", so he says will only be required in worst-case scenario if existing conduits cannot be reused and wall patching/repainting is required (old solid concrete internal walls!), but once I've signed the variation then I have no control of how much of the provisional sum I will actually be charged. At this stage I don't feel I have much option but to go along with it. @Liliana - this electrical work increase was actually raised before I spotted the wall mistake. @qebtel - that sounds like good advice. However, we wanted to make sure the builder would commit to completing the job by a given date, and the nature of the work and my wife's pregnancy bump rather give the game away anyway Re: Dispute with builder over increase to contract price. 8Aug 07, 2013 6:22 am "Thanks for the feedback everyone. @building-expert - The builder says that it was only after opening up some walls that the extent of the bad wiring could be seen. He says that there's newer wiring that is connected the the old stuff inside the walls. I suppose that's the basis on which he's claiming unforeseen circumstances. He will be replacing all wiring in the property, which was not part of original contract. He has offered to reduce the additional costs by $1,200, including waiving his builders margin on the additional work. A portion of the additional cost is "provisional", so he says will only be required in worst-case scenario if existing conduits cannot be reused and wall patching/repainting is required (old solid concrete internal walls!), but once I've signed the variation then I have no control of how much of the provisional sum I will actually be charged. At this stage I don't feel I have much option but to go along with it." It seems now that the builder's claim is genuine and he has made an effort to be accountable and to give you the discount. Therefore, you are right and you will have to go along with it. Just as there are builder's risks so are there owner's risks as you have just found out. Renovating or adding can be a risky business because you never know what you will find and that's when the budget can be blown. Foremost Building Expert in Australia,assisting with building problems/disputes, building stage inspections,pre-contract review advice for peace of mind 200 blogs http://www.buildingexpert.net.au/blog Re: Dispute with builder over increase to contract price. 9Aug 07, 2013 11:26 am Hi ergwun, That sounds like a reasonable outcome. The best thing is that you are questioning everything, taking advice and making sure all costs are accounted for. Good luck. Re: Dispute with builder over increase to contract price. 10Nov 24, 2013 5:33 pm Sometimes it is best to begin with the view that not all contractors or builders are bad. Ask questions but begin with some faith. cheers Just to makea point about this, an approach that some people have found sucessful in negotiating these rises down, Is to provide some workings to the builder, specifying… 4 81712 Fair Trading can issue orders to rectify and complete but once the matter goes to NCAT these orders are automatically vacated. You will have to terminate contract and sue… 21 29709 How are you doing Ben? Extremely interested in hearing what you are doing or plan to do! 12 15143 |