Browse Forums Building A New House 1 Aug 18, 2008 4:16 pm Hi All
Hubby and I are looking to build in Canberra in a new estate. Yesterday we received from the builder a pricing proposal to build the house we like. I am now confused as to the process for signing up with the builder. We have been told they require acceptance of the proposal within 21 days and following acceptance, building agreements will be prepared and the land sale will be instructed. Does this mean that we have to settle on all pricing and upgrades within the next 21 days or does this happen at the point of contracts being signed? Also, due to the very long lead time for the land to be ready (not likely to be ready to build until June 2009), the builder has advised there will be a rise and fall clause in the contract in accordance with Clause 14. They advised they use a standard MBA building contract but we have no idea what clause 14 is. Can anyone assist with info on this clause? Thanks! Re: Can someone please explain the starting process for building 2Aug 18, 2008 10:43 pm Hi Vegemite,
Are you doing land & Build Package together? As far as I know if you are going with LDA, they do only Land Sale. I'm also in Canberra and going through same process. Our land will be ready somewhere in Mid June 09 and we got the same story from builder. Many people have advised that not to start before your actual land start date. But I’m not an experienced. I would also love to view some advice on this. Cheers, Simpson Re: Can someone please explain the starting process for building 3Aug 19, 2008 1:46 am Hi Vegemite (and simpson), we are buidling in Canberra at the moment so I will give you a run down on how it went for us - it may not be exactly the same for you but should give you an idea.
We approached our builder in Sep07 for a house and land package. At the time they didn't have any available so they put us on a waiting list. However, we didn't have to wait long as we were offered a package less than a month later in mid Oct07. We only had 14 days to accept the builders quotation and pay a deposit of $3,000 (this was for the house only). After signing this we then waited several weeks for the builder to draw up the complete (HIA) contract which included the building plan and the builders standard inclusion list. We signed this late Nov07 and had to pay another $7,000 as the final instalment on our deposit (again for the house only). Once this was completed the builder instructed Forde (Delfin, CIC + LDA) to release the land to us (at the original release price ie the builder was not able to profit on the land). We exchanged contracts for the land in mid Dec07 using a deposit bond for our 10% deposit. We also became liable for stamp duty from this date. We were contacted by the builder early Feb to make our external colour selections as they had to be submitted to Forde for estate approval. We weren't contacted again until late Apr (just prior to our land being registered) to to make an appointment to do our selections. It was at this appointment that we did our selections and discussed (most of) our variations/costs. Our land registered late May and we settled on our land contract mid Jun (and made our first interest only payment late June - ouch!). And, of course, our building began several weeks later . We have been very happy with the process and would not hesitate recommending this path to others with only one consideration. As you are probably aware the ACT is having an election later this year and I think the current opposition has promised to abolish stamp duties up to $500k. If this is true you may want to ask your builder to hold back on releasing the land to you until after the election, just in case, lol. Please feel free to pm if you have any more questions. 'We make a living by what we get, but we make a life by what we give.' - Winston Churchill Re: Can someone please explain the starting process for building 4Aug 19, 2008 8:47 am Hi Vegemite
Not sure what the number is, but the rise & fall clause basically says that the builder can increase/ decrease the price by up to a certain percentage (15% here in VIC), after giving you the reason for the change ... and you will still be bound by the contract, despite the increase/ decrease. So if you are signing a contract with such a clause, it would be prudent to budget for the contract price, plus the maximum rise & fall percentage. Re: Can someone please explain the starting process for building 5Aug 19, 2008 9:16 am A useful glossary..... http://www.banks.com.au/tools/glossary/ ... ll-clause/
Rise and Fall Clause The Rise and Fall Clause is a provision in a building contract that allows the price of a property to move up or down according to changes in construction expenses. This may include worker wages, the price of fuel and construction materials, and other common factors, all of which must be specified in the clause. Price movements may be monitored based on published indices or on the builder's own list. In the case of the latter, the material must be drawn from official sources and agreed upon by both parties. Note: Rise and Falls are not ambit claims they must be based on facts, e.g. published construction cost indices for building works, the basis for the rise and fall must be specified in the Clause. The MBA contract may not have this - but it should - "real" construction contracts have the basis for the rise and fall, so both parties are aware of the possible price changes. mmm....donuts Homer Simpson 1956- Links: Site Costs Ready Reckoner | H1 Addiction Medical Advice | Château TDL: The Backyard Thanks. I wish there was a youtube video explaining this concept. 10 27340 I apologise for any confusion, but your understanding is correct. We approached our situation differently based on advice from… 11 54464 |