Browse Forums General Discussion 1 Jan 27, 2014 3:40 pm Hi, I am currently trying to finalize my contract with my builder (Plantation Homes) and I noticed the "late completion compensation" clause says they will only refund us $15 per day if they do not finish on time. Is that normal? I have heard from friends who built that it is normally $32 ~ $50 per day? I have also asked the people who are built with Plantation Homes in my neighbourhood and it seems they are also given $15 per day late completion fee. From what I read in this forum it seems the builder can also easily dodge this by claiming delays due to weather million other "circumstances" out of their control and not have to pay for it, so is it even a moot point to raise this at the contract meeting? "Occam's Razor. The simplest explanation is almost always somebody screwed up." Re: Late completion compensation - $15 a day - is that norma 2Jan 27, 2014 10:14 pm Ours is $250 a week. They have allowed themselves 230 days to build what should only take 4 or 5 months so with a buffer like that I cant imagine them having to pay out. You could always mention it and see what they say, but only you can really decide if its a deal breaker. Re: Late completion compensation - $15 a day - is that norma 3Jan 28, 2014 11:58 am A contract is there to promote and reinforce both parties interests, not just one side. There is no normal in a contract, because either party may ask for what they want. They can ask for $15, you can ask for $100 if you like. Work out what is reasonable for you, and tell them you'll walk if they dont meet your requirements. Re: Late completion compensation - $15 a day - is that norma 4Jan 28, 2014 7:37 pm Hi there, we are also building with Plantation and were shocked by the absolutely minimal amount. It really just damages trust about their "16 week build guarantee" and makes us very suspicious. We brought it up that we wanted at least equivalent to our rent but the tender operator basically said they weren't allowed to offer any more and it was a deal breaker from their end to go more! In the end we signed it because we really want the house but, as I said, it certainly leaves a very bad taste. Build thread: viewtopic.php?f=31&t=65085 Re: Late completion compensation - $15 a day - is that norma 5Jan 28, 2014 9:20 pm What qebtel says is correct. A contract is to protect both parties. If the builder fails to complete construction in the contracted time then this clause is for your protection. It allows you to cover your expenses for not being able to take possession of your property in the agreed time. Offering you $15 a day is insulting and just says that they have little confidence in their own ability to meet the schedule that THEY have set. The construction time per contract should take into account holidays, weekends AND delay days. If they feel that they can't meet this schedule then they don't know how to plan a house build and shouldn't be in business. Contracts can always be negotiated. End of the day, if they want your money they will negotiate. A contract shouldn't ONLY be in the builders favour... Of course they'll try to say no, they won't budge. It's often a game of bluff. If they think they've got you and you'll fold, of course they'll try it on. Completed a knock down and rebuild in northern Melbourne. Handover completed 27/09/2013 and now moved in. Re: Late completion compensation - $15 a day - is that norma 6Jan 28, 2014 9:36 pm For commercial contracts its as high as $10,000 a week Re: Late completion compensation - $15 a day - is that norma 7Jan 29, 2014 12:53 am In commercial there are also performance guarantees as well that are covered by the bank that get triggered if conditions are not met. I think liquidated damages in commercial contracts, while similar, are in fact very different. Building companies must give provide performance guarantees to cover this risk and banks financing commercial buildings will also require it. And yes I think 15 is rather insulting but I guess I will reserve judgement until I see my contract.... Cheers Mark Re: Late completion compensation - $15 a day - is that norma 8Jan 29, 2014 1:52 am Insulting? Yes! I also see it as a lack of faith in their own ability. 3in1 Supadiverta. Rainwater Harvesting Best Practice using syphonic drainage. Cleaner Neater Smarter Cheaper Supa Gutter Pumper. A low cost syphonic eaves gutter overflow solution. Re: Late completion compensation - $15 a day - is that norma 9Jan 29, 2014 10:35 am AussieMark In commercial there are also performance guarantees as well that are covered by the bank that get triggered if conditions are not met. I think liquidated damages in commercial contracts, while similar, are in fact very different. Building companies must give provide performance guarantees to cover this risk and banks financing commercial buildings will also require it. And yes I think 15 is rather insulting but I guess I will reserve judgement until I see my contract.... Cheers Mark We provide our clients a bank guarantee for every project we have usually 2.5 - 5% of total contract value (otherwise they would hold retention on you) We've had projects that had liquidated damages that was $10,000 a week, not very good! Had lots of issues with the job itself! Let's just say the bosses were not impressed we couldn't handover on time. We're building with Henley and ours is $250 a week which i think is pretty standard. Isn't Plantation Henley as well? Good luck on negotiations. Second Build, this time with Carlisle 2016, can't wait! Beckham: viewtopic.php?f=31&t=67280 Canterbury: viewtopic.php?f=31&t=81175 Re: Late completion compensation - $15 a day - is that norma 10Feb 06, 2014 9:30 pm PEARZ AussieMark In commercial there are also performance guarantees as well that are covered by the bank that get triggered if conditions are not met. I think liquidated damages in commercial contracts, while similar, are in fact very different. Building companies must give provide performance guarantees to cover this risk and banks financing commercial buildings will also require it. And yes I think 15 is rather insulting but I guess I will reserve judgement until I see my contract.... Cheers Mark We provide our clients a bank guarantee for every project we have usually 2.5 - 5% of total contract value (otherwise they would hold retention on you) We've had projects that had liquidated damages that was $10,000 a week, not very good! Had lots of issues with the job itself! Let's just say the bosses were not impressed we couldn't handover on time. We're building with Henley and ours is $250 a week which i think is pretty standard. Isn't Plantation Henley as well? Good luck on negotiations. How did you get $250 a week ($35.7 a day)??! My Plantation rep absolutely would not barge on that one and I was basically forced to sign with that $15 a day clause. And yes, Plantation Home is basically Henley they are the same. "Occam's Razor. The simplest explanation is almost always somebody screwed up." Re: Late completion compensation - $15 a day - is that norma 11Feb 06, 2014 9:35 pm It was actually standard for $250 a week in our contract so we never actually negotiated... that bites that they wouldn't barge on the amount. $15 is nothing! Second Build, this time with Carlisle 2016, can't wait! Beckham: viewtopic.php?f=31&t=67280 Canterbury: viewtopic.php?f=31&t=81175 Re: Late completion compensation - $15 a day - is that norma 12Feb 07, 2014 10:27 am Dr House My Plantation rep absolutely would not barge on that one and I was basically forced to sign with that $15 a day clause. Yes we tried quite forcefully, even threatened walking away from contract but they wouldn't raise this. Glad it wasn't just us who couldn't get it increased hehehe. Quite weird really considering they keep boasting how quickly they build their houses. Build thread: viewtopic.php?f=31&t=65085 Re: Late completion compensation - $15 a day - is that norma 13Feb 07, 2014 10:51 am The whole point of liquidated damages it to have agreed fair amount of compensation if builder is late in construction and to avoid legal wrangles. If you can't get the right amount of liquidated damages in the contract you are better to leave it blank and resort to your rights under common law for damages. If this went to Tribunal I doubt that builder would get away with it on the grounds of unconscionable conduct and also perhaps a breach of fair trading (with a hefty fine). 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: Late completion compensation - $15 a day - is that norma 14Feb 07, 2014 4:02 pm Ours was $250 a week and they where 2 weeks over so they paid us $500.00 It's crucial to check your contract and local regulations regarding late completion penalties. If your builder said the permit issuance means no more penalties, you should… 8 10710 4 6797 Yes, get a builder, make sure he is experienced and a registered building practitioner 5 8934 |