Terminate Build Contract

Hello Everyone,

Need help! We signed HIA fixed price build contract couple of months back and got finance approved for our first home in SE QLD. Now, the builder says he can't honor the contract due to price rise and has sent the revised contract increasing the price by more than 15 grand. I can't afford the increase. Is it possible to get out of the contract? The only work done by the builder so far is the build plan and the soil test. I had paid initial deposit of $2000. Would I be required to pay more to cancel? Anyone been in the same boat, please advise.

Thanks!

It seems that the builder is reneging on the contract not you.
I have heard another large builder cancelling contracts, refunding deposits+ 20k, for the same reasons, increased costs. However that puts the owner in another problem, how to get another builder. It won’t be at the same price.
It seems that we will eventually have to have cost escalation clauses in the contracts as we did 30 years ago.

Hi,

My builder sent an email informing of and asking me to sign an increase to the contract price by 11k. It says that they can increase the price as the construction has not commenced within 45 days after signing the contract when the delay was not from the builder. We do not have any extra money to put towards the construction, so I wrote to them telling that we can't afford it. Still waiting for their response. We don't want to cancel the contract as all the builders have put their construction prices high, so we are trying to negotiate. Fingers crossed.

they should have told you that loop hole before you handed over any money
You are also liable for all extra additional costs if you now pull out
The reality is the costs have gone up twice that amount... you can thank the government stimulation grants for that at the upcoming election

Hi ash19

It is possible that the Builder is breaching or repudiating the Contract. With the current surge in material price, your experience is common at the moment. You probably should get legal advice from a construction lawyer so that you know your rights and options. There is a chance that your Builder is not entitled to the price increase. You could possibly improve your negotiating position if the Builder is at fault. Something worth considering.


Cheers,
John

I love reading your advice John

Thanks for the contribution

Cheers

Simeon

Thanks John and others for the response.
I have told the builder I can't afford the increase and if he can't honor the contract we will have to cancel it. He said he will check and get back. How long do I need to wait for his response?

Hi ash19


It depends on whether or not you wish to terminate the Contract mutually or pursuant to the Contract.


If mutually, then there is no timeframe. I suppose you play this by ear on what seems appropriate in the circumstances.


If pursuant to the Contract, then you should follow the Contract timeframes for the relevant termination clause.


In both circumstances you might speak with a local solicitor or a construction lawyer to assist you with getting it right. Of course, terminating a contract is risky and getting it wrong may cause you to repudiate the Contract. Alternatively you might speak with the QBCC for assistance.


Cheers,
John

Thanks John for the great advice!