Browse Forums Building A New House Re: Initial Deposit Dispute 22Sep 10, 2021 4:40 pm sparshrohatgi strannik the legal steps will cost you more money than 50% of your deposit. i'd take as much as you can get out of them, and then complain to wherever you can complain for free. I was also thinking of the same plan initially , but taking 50% deposit back would then weaken my case as they might say I have agreed to the 50% refund by accepting the amount. Complain for free can be done in ? Consumer affairs Victoria is the only place I know of . Is there anything else ? there would be no case, the purpose of complaint would be to put it on their record and create problems for them, rather than try and recoup the rest of money Re: Initial Deposit Dispute 23Sep 10, 2021 7:31 pm You need to be fair to the builder and the builder has to be fair to you. The cost increase is an item outside builders control and had it not been for it the builder would have honoured their price. I am sure builder too is disappointed that you are not going ahead after investing their time with you. It is up to the builder to detail their expense and the fee for the work done. Keep in mind that any professional is now upwards of $100/hr If you get the offer of 50% refund you should consider it. The amount in dispute is not worth your time, I am sure your time is valuable. Or you can bleat about it on social media, make complaints to VBA, Consumer affairs or even make small civil claim in VCAT Just the parking will cost you $75 + your wasted time, to prepare your case 1 day + to attend hearing 1 day , + stress of a dispute + filing fee. You may get nothing, If decision is less than what your builder offered you may have to pay their costs, if they bring a Barrister 3-4K. It just seems vindictive and its no good for your health. Take whatever refund you can and cut your loses. Builder is not your enemy, your enemy is increasing costs of building 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: Initial Deposit Dispute 24Sep 11, 2021 10:09 am building-expert You need to be fair to the builder and the builder has to be fair to you. The cost increase is an item outside builders control and had it not been for it the builder would have honoured their price. I am sure builder too is disappointed that you are not going ahead after investing their time with you. It is up to the builder to detail their expense and the fee for the work done. Keep in mind that any professional is now upwards of $100/hr If you get the offer of 50% refund you should consider it. The amount in dispute is not worth your time, I am sure your time is valuable. Or you can bleat about it on social media, make complaints to VBA, Consumer affairs or even make small civil claim in VCAT Just the parking will cost you $75 + your wasted time, to prepare your case 1 day + to attend hearing 1 day , + stress of a dispute + filing fee. You may get nothing, If decision is less than what your builder offered you may have to pay their costs, if they bring a Barrister 3-4K. It just seems vindictive and its no good for your health. Take whatever refund you can and cut your loses. Builder is not your enemy, your enemy is increasing costs of building I understand what you say , but the thing is price increases are always happening and if it keeps on affecting the contract then what is the purpose of initial deposit ? I thought that the deposit was to lock in the base price and start the project (soil test and land survey). They didn’t start any work except for preparing a contract . And I don’t want to build my house by taking a loss , so I am happy to let go the initial contract price . Just refund the initial deposit because you have not honoured the contract. And if required . Split the costs which has incurred. You can’t just say 50% of the refund. What if the deposit was 10k ? I am sure they would have said 50% refund in that case as well. Re: Initial Deposit Dispute 25Sep 11, 2021 10:20 am sparshrohatgi building-expert You need to be fair to the builder and the builder has to be fair to you. The cost increase is an item outside builders control and had it not been for it the builder would have honoured their price. I am sure builder too is disappointed that you are not going ahead after investing their time with you. It is up to the builder to detail their expense and the fee for the work done. Keep in mind that any professional is now upwards of $100/hr If you get the offer of 50% refund you should consider it. The amount in dispute is not worth your time, I am sure your time is valuable. Or you can bleat about it on social media, make complaints to VBA, Consumer affairs or even make small civil claim in VCAT Just the parking will cost you $75 + your wasted time, to prepare your case 1 day + to attend hearing 1 day , + stress of a dispute + filing fee. You may get nothing, If decision is less than what your builder offered you may have to pay their costs, if they bring a Barrister 3-4K. It just seems vindictive and its no good for your health. Take whatever refund you can and cut your loses. Builder is not your enemy, your enemy is increasing costs of building I understand what you say , but the thing is price increases are always happening and if it keeps on affecting the contract then what is the purpose of initial deposit ? I thought that the deposit was to lock in the base price and start the project (soil test and land survey). They didn’t start any work except for preparing a contract . And I don’t want to build my house by taking a loss , so I am happy to let go the initial contract price . Just refund the initial deposit because you have not honoured the contract. And if required . Split the costs which has incurred. You can’t just say 50% of the refund. What if the deposit was 10k ? I am sure they would have said 50% refund in that case as well. Didn’t you have 2 week window to sign building contract and lock in the price? But you did not. The future of building won’t be fixed price contacts but contracts with cost escalation clauses as they were 30-40 years ago in times of high inflation. Get used to it. 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: Initial Deposit Dispute 26Sep 11, 2021 10:32 am building-expert sparshrohatgi building-expert You need to be fair to the builder and the builder has to be fair to you. The cost increase is an item outside builders control and had it not been for it the builder would have honoured their price. I am sure builder too is disappointed that you are not going ahead after investing their time with you. It is up to the builder to detail their expense and the fee for the work done. Keep in mind that any professional is now upwards of $100/hr If you get the offer of 50% refund you should consider it. The amount in dispute is not worth your time, I am sure your time is valuable. Or you can bleat about it on social media, make complaints to VBA, Consumer affairs or even make small civil claim in VCAT Just the parking will cost you $75 + your wasted time, to prepare your case 1 day + to attend hearing 1 day , + stress of a dispute + filing fee. You may get nothing, If decision is less than what your builder offered you may have to pay their costs, if they bring a Barrister 3-4K. It just seems vindictive and its no good for your health. Take whatever refund you can and cut your loses. Builder is not your enemy, your enemy is increasing costs of building I understand what you say , but the thing is price increases are always happening and if it keeps on affecting the contract then what is the purpose of initial deposit ? I thought that the deposit was to lock in the base price and start the project (soil test and land survey). They didn’t start any work except for preparing a contract . And I don’t want to build my house by taking a loss , so I am happy to let go the initial contract price . Just refund the initial deposit because you have not honoured the contract. And if required . Split the costs which has incurred. You can’t just say 50% of the refund. What if the deposit was 10k ? I am sure they would have said 50% refund in that case as well. Didn’t you have 2 week window to sign building contract and lock in the price? But you did not. The future of building won’t be fixed price contacts but contracts with cost escalation clauses as they were 30-40 years ago in times of high inflation. Get used to it. How do I sign the contract without a loan approval from bank ? I need to have unconditional approval from bank to be sure of the finances before I pay 5% deposit to sign the contract.. right ? And for getting the bank approval I need to have a complete drawing which wasn’t yet ready by the builder ! Re: Initial Deposit Dispute 27Sep 11, 2021 11:17 am How do I sign the contract without a loan approval from bank ? I need to have unconditional approval from bank to be sure of the finances before I pay 5% deposit to sign the contract.. right ? And for getting the bank approval I need to have a complete drawing which wasn’t yet ready by the builder ![/quote] For getting a pre approval from bank you don’t need a signed contract. In fact they will tell you the borrowing limit and then you decide how much you can spend on build. Signed contracts are required for final approval of loan. Your bank or mortgage broker should have mentioned this. Did they ? Also when you paid the deposit what terms and conditions did you sign ? Re: Initial Deposit Dispute 28Sep 11, 2021 11:22 am Ozshaz How do I sign the contract without a loan approval from bank ? I need to have unconditional approval from bank to be sure of the finances before I pay 5% deposit to sign the contract.. right ? And for getting the bank approval I need to have a complete drawing which wasn’t yet ready by the builder ! For getting a pre approval from bank you don’t need a signed contract. In fact they will tell you the borrowing limit and then you decide how much you can spend on build. Signed contracts are required for final approval of loan. Your bank or mortgage broker should have mentioned this. Did they ? Also when you paid the deposit what terms and conditions did you sign ?[/quote] When I paid the deposit it was based on a verbal agreement with the builder about the inclusions list and the initial contract price . I didn’t sign any documents as everything was done online over phone in this lockdown. I expected that the base price would freeze once I have paid the deposit and then when the pre approval from bank comes in I would have signed the HIA contract with 5% payment. I knew that the contract price could rise when I do any upgrade or due to additional site cost, but wasn’t expecting the base price to rise all of a sudden. Re: Initial Deposit Dispute 29Sep 11, 2021 12:23 pm Ozshaz How do I sign the contract without a loan approval from bank ? I need to have unconditional approval from bank to be sure of the finances before I pay 5% deposit to sign the contract.. right ? And for getting the bank approval I need to have a complete drawing which wasn’t yet ready by the builder ! For getting a pre approval from bank you don’t need a signed contract. In fact they will tell you the borrowing limit and then you decide how much you can spend on build. Signed contracts are required for final approval of loan. Your bank or mortgage broker should have mentioned this. Did they ? Also when you paid the deposit what terms and conditions did you sign ?[/quote] Pre-approval is just a letter with lots of conditions, one of the conditions is to provide a fixed price building contract. And also most of people are borrowing at their maximum LVR and loan amount against their security/property, if there is an unexpected increase like this, it means that the customer cannot meet their loan conditions and lost their initial deposit. What you are saying is an ideal position, customers have the ability to borrow more and have plenty equity in their property to borrow against. But this does not apply to everyone. I agree that the base price should be locked after initial deposit is paid. Builders can advise customer how long does the period of fixed price last for. If they increase their price right after customer’s deposit, this is not a ethical practice. Re: Initial Deposit Dispute 30Sep 11, 2021 12:27 pm building-expert sparshrohatgi building-expert You need to be fair to the builder and the builder has to be fair to you. The cost increase is an item outside builders control and had it not been for it the builder would have honoured their price. I am sure builder too is disappointed that you are not going ahead after investing their time with you. It is up to the builder to detail their expense and the fee for the work done. Keep in mind that any professional is now upwards of $100/hr If you get the offer of 50% refund you should consider it. The amount in dispute is not worth your time, I am sure your time is valuable. Or you can bleat about it on social media, make complaints to VBA, Consumer affairs or even make small civil claim in VCAT Just the parking will cost you $75 + your wasted time, to prepare your case 1 day + to attend hearing 1 day , + stress of a dispute + filing fee. You may get nothing, If decision is less than what your builder offered you may have to pay their costs, if they bring a Barrister 3-4K. It just seems vindictive and its no good for your health. Take whatever refund you can and cut your loses. Builder is not your enemy, your enemy is increasing costs of building I understand what you say , but the thing is price increases are always happening and if it keeps on affecting the contract then what is the purpose of initial deposit ? I thought that the deposit was to lock in the base price and start the project (soil test and land survey). They didn’t start any work except for preparing a contract . And I don’t want to build my house by taking a loss , so I am happy to let go the initial contract price . Just refund the initial deposit because you have not honoured the contract. And if required . Split the costs which has incurred. You can’t just say 50% of the refund. What if the deposit was 10k ? I am sure they would have said 50% refund in that case as well. Didn’t you have 2 week window to sign building contract and lock in the price? But you did not. The future of building won’t be fixed price contacts but contracts with cost escalation clauses as they were 30-40 years ago in times of high inflation. Get used to it. Future of building won’t be fixed price contract, this is not up to builders but big banks, they require fixed price building contract for this type of loan, if they don’t change the policy, I think building industry will have a cold season, lol. Re: Initial Deposit Dispute 32Sep 14, 2021 1:19 pm mcbks You've only paid $2k. And they're offering you half of that back. This seems like a lot of jumping up and down over $1000. $1000 is not a small amount for me sorry .. Re: Initial Deposit Dispute 33Sep 14, 2021 3:04 pm sparshrohatgi Ozshaz How do I sign the contract without a loan approval from bank ? I need to have unconditional approval from bank to be sure of the finances before I pay 5% deposit to sign the contract.. right ? And for getting the bank approval I need to have a complete drawing which wasn’t yet ready by the builder ! For getting a pre approval from bank you don’t need a signed contract. In fact they will tell you the borrowing limit and then you decide how much you can spend on build. Signed contracts are required for final approval of loan. Your bank or mortgage broker should have mentioned this. Did they ? Also when you paid the deposit what terms and conditions did you sign ? When I paid the deposit it was based on a verbal agreement with the builder about the inclusions list and the initial contract price . I didn’t sign any documents as everything was done online over phone in this lockdown. I expected that the base price would freeze once I have paid the deposit and then when the pre approval from bank comes in I would have signed the HIA contract with 5% payment. I knew that the contract price could rise when I do any upgrade or due to additional site cost, but wasn’t expecting the base price to rise all of a sudden.[/quote] So just to clarify, you just paid the builder $2K on a verbal agreement without signing any documents or without getting any receipts form them stating what is for and what is included ? Do you know if your builder is following HIA or MBA guidelines ? When we signed for our initial deposit we signed a lot of documents including the quote, inclusions, shopping list etc and also there was a disclaimer that the quote is valid for only 14days and needs to be signed to hold the pricing. We did this online and they emailed back with signed documents. Did you sign anything ? Re: Initial Deposit Dispute 34Sep 16, 2021 8:53 am I think the builder offering you half your deposit back is reasonable. The builder is entitled to recover any costs they have spent to date on your build out of the deposit. Even though you didn't sign any documentation the fact that you committed and paid a deposit is reflects IMHO that you agreed to what had been discussed even if it was verbally but you transacted on that verbal agreement by paying money. Like Building Expert stated above you can go to VCAT or engage a solicitor but your likely to spend way more than the $1000. I'm of the view if you don't want to continue with this builder take the $1000 hit. Learn your lesson and move on. Re: Initial Deposit Dispute 35Sep 20, 2021 10:12 am Ozshaz sparshrohatgi Ozshaz How do I sign the contract without a loan approval from bank ? I need to have unconditional approval from bank to be sure of the finances before I pay 5% deposit to sign the contract.. right ? And for getting the bank approval I need to have a complete drawing which wasn’t yet ready by the builder ! For getting a pre approval from bank you don’t need a signed contract. In fact they will tell you the borrowing limit and then you decide how much you can spend on build. Signed contracts are required for final approval of loan. Your bank or mortgage broker should have mentioned this. Did they ? Also when you paid the deposit what terms and conditions did you sign ? When I paid the deposit it was based on a verbal agreement with the builder about the inclusions list and the initial contract price . I didn’t sign any documents as everything was done online over phone in this lockdown. I expected that the base price would freeze once I have paid the deposit and then when the pre approval from bank comes in I would have signed the HIA contract with 5% payment. I knew that the contract price could rise when I do any upgrade or due to additional site cost, but wasn’t expecting the base price to rise all of a sudden. So just to clarify, you just paid the builder $2K on a verbal agreement without signing any documents or without getting any receipts form them stating what is for and what is included ? Do you know if your builder is following HIA or MBA guidelines ? When we signed for our initial deposit we signed a lot of documents including the quote, inclusions, shopping list etc and also there was a disclaimer that the quote is valid for only 14days and needs to be signed to hold the pricing. We did this online and they emailed back with signed documents. Did you sign anything ?[/quote] Can you guide me as what documents did you sign and check before transferring the initial deposit ? Something I will keep in mind for the next time I engage with a builder. Re: Initial Deposit Dispute 36Sep 20, 2021 5:51 pm icat2000 I think the builder offering you half your deposit back is reasonable. The builder is entitled to recover any costs they have spent to date on your build out of the deposit. Even though you didn't sign any documentation the fact that you committed and paid a deposit is reflects IMHO that you agreed to what had been discussed even if it was verbally but you transacted on that verbal agreement by paying money. Like Building Expert stated above you can go to VCAT or engage a solicitor but your likely to spend way more than the $1000. I'm of the view if you don't want to continue with this builder take the $1000 hit. Learn your lesson and move on. Building journey can be very emotional at times. From what i have learnt so far nothing goes according to plan. Better take the $1000 and negotiate the discounts in build package. If the builders don't increase their prices, some will go bankrupt before build completion and which case everybody looses bigly!. Re: Initial Deposit Dispute 37Sep 28, 2021 1:06 pm sparshrohatgi Hi Guys, Need some advice about a scenario I am facing. I had paid a builder initial deposit (says non refundable) of 2000$ based on there initial quote and inclusions list we discussed verbally. They then gave me an HIA contract with the same contract price as discussed and even a draft drawing. However within 2 weeks before I could sign and send the HIA contract they came back saying that they would not be able to build at the same price and are now asking for 15000$ extra for the same inclusions. This new contract price is above my budget and hence I have asked for my deposit back as it was paid on a verbal agreement of initial contract price. The builder is not willing to give me a full refund. What can I do in this situation ? No contract is signed yet. Hi sparshrohatgi It is possible that the Builder is breaching or repudiating the original agreement. If there is no Contract because the Owner did not “accept” the HIA contract, then it seems logical you would be entitled to recover your deposit. A deposit is not payment for works performed but rather as intended, a deposit. Much will depend on the facts of your case. You might speak with the Office of Fair Trading for advice. You might escalate this to the NCAT if the Builder is not willing to refund the payment. It will likely cost more than $2k to get legal representation so you might spend the time to study the Contract and get assistance from Fair Trading and the Tribunal. Cheers, John Get sound legal advice. We manage Building Disputes, Construction Contracts, Security of Payment. PM for queries. https://www.contractsspecialist.com.au/articles/ Building Standards; Getting It Right! It is the neighbours builders responsibility to remove and then make good the fence. It's not your responsibility. Builders do it all the time and are used to handling… 2 4769 |