Browse Forums Building A New House 1 Sep 23, 2021 11:56 am Hi Everyone, Hope you are well! I am a new member and need your advice. I bought an "house and land" package in West Sydney in March 2021. The land size is 396 sq. meters and two floors house built up area is 244 sq. meters. The land has been settled in April 2021 and the house construction yet to be started as it got delayed due to multiple reasons like builder's office was very slow, DA approval etc. As per the building contract, I have already paid 10% deposit of the contract price and my housing loan installments have been started for the land loan since May 2021. I have already paid 5 months' interest on my loan and the construction has not been started yet. Yesterday, I have received a letter "Authority to Variation" from builder for signature before builder can finalize the construction plan. The builder has asked for more than $18K in addition to the contract price. The key items in the variation form are as follows: 1. ~$8700 to provide timber retaining wall to right hand side and left-hand side boundaries (I have selected landscaping package and as per builder this package doesn't include retaining wall) 2. ~$3000 to achieve energy commitments (R2.5 and R5.0 insulations) 3. ~$2500 to import clean fill to achieve benching level for builders platform (contract includes site preparation and establishment, bulk earthworks for site levelling, cut and fill up to 1 metre and 50 tonne spoil removal allowance) 4. ~$1000 to provide additional 400mm bored concrete piers to dwelling 5. ~$1000 to provide additional underground electrical mains and fibre-optics provision due to location of electrical turret and communications pit As I am new to this country and house construction, kindly suggest 1. Are above charges legitimate and normally paid by all buyers? 2. If not, what should I do to avoid these charges? 3. May I get more such demands in future as the construction yet to start? 4. Can I do something about the delay in construction and the burden of loan installment and rent I have been paying for last 5 months. 4. As HIA contract is in favor of builder, would you suggest to approach fair-trading/NCAT? I appreciate your quick response as I need to reply to builder. Thanks so much! Regards Tarun Re: Pre-Constructions Charges by the builder 2Sep 24, 2021 8:45 am Hey tarunkumar Welcome to the forum Unfortunately, you will need to do the best you can out of a worsening situation 1. Without drawings, engineering, data and more info it's hard to say if the increases are genuine or an attempt by the builder, trades, suppliers to gouge more money from projects ( always own your own drawing, engineering and data) 2. The builder doesn't have to give you any information he owns the plans and associated data 3. If you don't pay you will be in breach of contract, loose your deposit and incur a lot of extra costs 4. Delays are potential cost increases which clients have to pay...always seek legal advice before you sign your life savings away on bullsh!t sales promises, sketches and artistic fake presentations 5.Fair trading is probably sick and tired of dealing with builders contract complaints ... Buyer beware Estimates are 10-15% of contracts are currently being price gouge... what gets posted here is the tip of the ice berg Cheers Chris Designer,Engineer (Civil,Const & Envir),Builder,Concrete & Masonry Contract.Struct Repairs Re: Pre-Constructions Charges by the builder 3Sep 24, 2021 9:26 am tarunkumar Hi Everyone, Hope you are well! I am a new member and need your advice. I bought an "house and land" package in West Sydney in March 2021. The land size is 396 sq. meters and two floors house built up area is 244 sq. meters. The land has been settled in April 2021 and the house construction yet to be started as it got delayed due to multiple reasons like builder's office was very slow, DA approval etc. As per the building contract, I have already paid 10% deposit of the contract price and my housing loan installments have been started for the land loan since May 2021. I have already paid 5 months' interest on my loan and the construction has not been started yet. Yesterday, I have received a letter "Authority to Variation" from builder for signature before builder can finalize the construction plan. The builder has asked for more than $18K in addition to the contract price. The key items in the variation form are as follows: 1. ~$8700 to provide timber retaining wall to right hand side and left-hand side boundaries (I have selected landscaping package and as per builder this package doesn't include retaining wall) 2. ~$3000 to achieve energy commitments (R2.5 and R5.0 insulations) 3. ~$2500 to import clean fill to achieve benching level for builders platform (contract includes site preparation and establishment, bulk earthworks for site levelling, cut and fill up to 1 metre and 50 tonne spoil removal allowance) 4. ~$1000 to provide additional 400mm bored concrete piers to dwelling 5. ~$1000 to provide additional underground electrical mains and fibre-optics provision due to location of electrical turret and communications pit As I am new to this country and house construction, kindly suggest 1. Are above charges legitimate and normally paid by all buyers? 2. If not, what should I do to avoid these charges? 3. May I get more such demands in future as the construction yet to start? 4. Can I do something about the delay in construction and the burden of loan installment and rent I have been paying for last 5 months. 4. As HIA contract is in favor of builder, would you suggest to approach fair-trading/NCAT? I appreciate your quick response as I need to reply to builder. Thanks so much! Regards Tarun Hi Tarun Sorry to hear about the situation you are in. $18,000 is a lot of money to come up with especially when you haven't budgeted for it. Unfortunately this is a very common trap that people can get caught in when signing a contract without the plans being finalised and leaving themselves open to so many variations. One thing that really upsets me is when homeowners get charged a "BASIX" fee for items that are basically standard in all homes these days. Case in point the R2.5 insulation to walls and R5.0 to the ceilings. I might be wrong but when was the last time R2.5 wasn't required in a home, in Sydney anyway? The volume building model is based on getting homeowners to get excited by cheap prices without realising that that there will be a lot of variations down the track, such as "site costs" "BASIX", "BAL rating charges" ( talking 12.5-29 which cost next to nothing), I have even seen some builders charging a "suburb allowance" for their supervisors to drive to Sylvania. Anyway, you have 2 clear issues as far as I can tell, being: 1. Are these charges reasonable in line with market rates? - On the surface these numbers seem fair 2. Is the builder able to charge you these variations under the HIA contract? - I would suggest that you get some legal advice on this. The HIA contract is very heavily weighted in favour of the builder, but there are some standard construction law principles that can often be deployed by a skilled lawyer. I would suggest you get help especially where $18k is involved. There is a very knowledgeable construction lawyer on here, suggest you give him a call and seek his advice all the best Simeon Architectural Homes & Duplexes - specialising in custom designing homes to your budget Get a Free Onsite Consultation Today or send a PM for information, questions or advice. Re: Pre-Constructions Charges by the builder 4Sep 24, 2021 12:12 pm Ashington Homes tarunkumar Hi Everyone, Hope you are well! I am a new member and need your advice. I bought an "house and land" package in West Sydney in March 2021. The land size is 396 sq. meters and two floors house built up area is 244 sq. meters. The land has been settled in April 2021 and the house construction yet to be started as it got delayed due to multiple reasons like builder's office was very slow, DA approval etc. As per the building contract, I have already paid 10% deposit of the contract price and my housing loan installments have been started for the land loan since May 2021. I have already paid 5 months' interest on my loan and the construction has not been started yet. Yesterday, I have received a letter "Authority to Variation" from builder for signature before builder can finalize the construction plan. The builder has asked for more than $18K in addition to the contract price. The key items in the variation form are as follows: 1. ~$8700 to provide timber retaining wall to right hand side and left-hand side boundaries (I have selected landscaping package and as per builder this package doesn't include retaining wall) 2. ~$3000 to achieve energy commitments (R2.5 and R5.0 insulations) 3. ~$2500 to import clean fill to achieve benching level for builders platform (contract includes site preparation and establishment, bulk earthworks for site levelling, cut and fill up to 1 metre and 50 tonne spoil removal allowance) 4. ~$1000 to provide additional 400mm bored concrete piers to dwelling 5. ~$1000 to provide additional underground electrical mains and fibre-optics provision due to location of electrical turret and communications pit As I am new to this country and house construction, kindly suggest 1. Are above charges legitimate and normally paid by all buyers? 2. If not, what should I do to avoid these charges? 3. May I get more such demands in future as the construction yet to start? 4. Can I do something about the delay in construction and the burden of loan installment and rent I have been paying for last 5 months. 4. As HIA contract is in favor of builder, would you suggest to approach fair-trading/NCAT? I appreciate your quick response as I need to reply to builder. Thanks so much! Regards Tarun Hi Tarun Sorry to hear about the situation you are in. $18,000 is a lot of money to come up with especially when you haven't budgeted for it. Unfortunately this is a very common trap that people can get caught in when signing a contract without the plans being finalised and leaving themselves open to so many variations. One thing that really upsets me is when homeowners get charged a "BASIX" fee for items that are basically standard in all homes these days. Case in point the R2.5 insulation to walls and R5.0 to the ceilings. I might be wrong but when was the last time R2.5 wasn't required in a home, in Sydney anyway? The volume building model is based on getting homeowners to get excited by cheap prices without realising that that there will be a lot of variations down the track, such as "site costs" "BASIX", "BAL rating charges" ( talking 12.5-29 which cost next to nothing), I have even seen some builders charging a "suburb allowance" for their supervisors to drive to Sylvania. Anyway, you have 2 clear issues as far as I can tell, being: 1. Are these charges reasonable in line with market rates? - On the surface these numbers seem fair 2. Is the builder able to charge you these variations under the HIA contract? - I would suggest that you get some legal advice on this. The HIA contract is very heavily weighted in favour of the builder, but there are some standard construction law principles that can often be deployed by a skilled lawyer. I would suggest you get help especially where $18k is involved. There is a very knowledgeable construction lawyer on here, suggest you give him a call and seek his advice all the best Simeon Hi Simeon Thanks for your response and advice. Appreciate it. Could you please share construction lawyer contact information. Also, please suggest is it possible to get the retaining wall and landscaping done my own hiring another vendor to save money as this builder charging very high price for it. Will there be any complications related to occupation certificate (OC)? Will builder agree to take out landscaping package from the contract? Thanks Tarun Re: Pre-Constructions Charges by the builder 5Sep 24, 2021 12:14 pm StructuralBIMGuy Hey tarunkumar Welcome to the forum Unfortunately, you will need to do the best you can out of a worsening situation 1. Without drawings, engineering, data and more info it's hard to say if the increases are genuine or an attempt by the builder, trades, suppliers to gouge more money from projects ( always own your own drawing, engineering and data) 2. The builder doesn't have to give you any information he owns the plans and associated data 3. If you don't pay you will be in breach of contract, loose your deposit and incur a lot of extra costs 4. Delays are potential cost increases which clients have to pay...always seek legal advice before you sign your life savings away on bullsh!t sales promises, sketches and artistic fake presentations 5.Fair trading is probably sick and tired of dealing with builders contract complaints ... Buyer beware Estimates are 10-15% of contracts are currently being price gouge... what gets posted here is the tip of the ice berg Cheers Chris Hi Chris Thanks for your response and advice. Appreciate it. Please suggest is it possible to get the retaining wall and landscaping done my own hiring another vendor to save money as this builder charging very high price for it. Will there be any complications related to occupation certificate (OC)? Will builder agree to take out landscaping package from the contract? Thanks Tarun Re: Pre-Constructions Charges by the builder 6Sep 24, 2021 12:50 pm The problem with taking things out or adding by variations to the contract is the builders feels entitled to keep the profit margins and rarely gives back the full amount in the first instance. Adding things in always gets charged at a much higher rate.... the builder never looses out either way The secret is to know what's involved and a far price, some changes can't be made whereby you will be left in a far worse position later on. Try to avoid taking too much out...you'll end up with an expensive shell that you have to fit out after handover. Most retaining, storm water, site works provisions (BIG TICKET ITEMS) should be dealt with in the first instance-> upfront Beware, putting a deposit down, with the aim of sorting items out later on.... Later on.. is too late to back out Cheers Chris Designer,Engineer (Civil,Const & Envir),Builder,Concrete & Masonry Contract.Struct Repairs Re: Pre-Constructions Charges by the builder 7Sep 24, 2021 1:09 pm tarunkumar Ashington Homes tarunkumar Hi Everyone, Hope you are well! I am a new member and need your advice. I bought an "house and land" package in West Sydney in March 2021. The land size is 396 sq. meters and two floors house built up area is 244 sq. meters. The land has been settled in April 2021 and the house construction yet to be started as it got delayed due to multiple reasons like builder's office was very slow, DA approval etc. As per the building contract, I have already paid 10% deposit of the contract price and my housing loan installments have been started for the land loan since May 2021. I have already paid 5 months' interest on my loan and the construction has not been started yet. Yesterday, I have received a letter "Authority to Variation" from builder for signature before builder can finalize the construction plan. The builder has asked for more than $18K in addition to the contract price. The key items in the variation form are as follows: 1. ~$8700 to provide timber retaining wall to right hand side and left-hand side boundaries (I have selected landscaping package and as per builder this package doesn't include retaining wall) 2. ~$3000 to achieve energy commitments (R2.5 and R5.0 insulations) 3. ~$2500 to import clean fill to achieve benching level for builders platform (contract includes site preparation and establishment, bulk earthworks for site levelling, cut and fill up to 1 metre and 50 tonne spoil removal allowance) 4. ~$1000 to provide additional 400mm bored concrete piers to dwelling 5. ~$1000 to provide additional underground electrical mains and fibre-optics provision due to location of electrical turret and communications pit As I am new to this country and house construction, kindly suggest 1. Are above charges legitimate and normally paid by all buyers? 2. If not, what should I do to avoid these charges? 3. May I get more such demands in future as the construction yet to start? 4. Can I do something about the delay in construction and the burden of loan installment and rent I have been paying for last 5 months. 4. As HIA contract is in favor of builder, would you suggest to approach fair-trading/NCAT? I appreciate your quick response as I need to reply to builder. Thanks so much! Regards Tarun Hi Tarun Sorry to hear about the situation you are in. $18,000 is a lot of money to come up with especially when you haven't budgeted for it. Unfortunately this is a very common trap that people can get caught in when signing a contract without the plans being finalised and leaving themselves open to so many variations. One thing that really upsets me is when homeowners get charged a "BASIX" fee for items that are basically standard in all homes these days. Case in point the R2.5 insulation to walls and R5.0 to the ceilings. I might be wrong but when was the last time R2.5 wasn't required in a home, in Sydney anyway? The volume building model is based on getting homeowners to get excited by cheap prices without realising that that there will be a lot of variations down the track, such as "site costs" "BASIX", "BAL rating charges" ( talking 12.5-29 which cost next to nothing), I have even seen some builders charging a "suburb allowance" for their supervisors to drive to Sylvania. Anyway, you have 2 clear issues as far as I can tell, being: 1. Are these charges reasonable in line with market rates? - On the surface these numbers seem fair 2. Is the builder able to charge you these variations under the HIA contract? - I would suggest that you get some legal advice on this. The HIA contract is very heavily weighted in favour of the builder, but there are some standard construction law principles that can often be deployed by a skilled lawyer. I would suggest you get help especially where $18k is involved. There is a very knowledgeable construction lawyer on here, suggest you give him a call and seek his advice all the best Simeon Hi Simeon Thanks for your response and advice. Appreciate it. Could you please share construction lawyer contact information. Also, please suggest is it possible to get the retaining wall and landscaping done my own hiring another vendor to save money as this builder charging very high price for it. Will there be any complications related to occupation certificate (OC)? Will builder agree to take out landscaping package from the contract? Thanks Tarun Tarun I will PM you his number. yes it is possible to do your own retaining wall later but you need to consider site access issues. It sounds like your land is quite small and not sure whether you are building zero lot style ( ie no side setbacks) so just think about how you will get trades and materials into the yard after the build. And Chris is correct, once you start varying the contract in your favour often builders will still retain the profit anyway. Cheers Simeon Architectural Homes & Duplexes - specialising in custom designing homes to your budget Get a Free Onsite Consultation Today or send a PM for information, questions or advice. Re: Pre-Constructions Charges by the builder 8Sep 25, 2021 1:56 pm StructuralBIMGuy The problem with taking things out or adding by variations to the contract is the builders feels entitled to keep the profit margins and rarely gives back the full amount in the first instance. Adding things in always gets charged at a much higher rate.... the builder never looses out either way The secret is to know what's involved and a far price, some changes can't be made whereby you will be left in a far worse position later on. Try to avoid taking too much out...you'll end up with an expensive shell that you have to fit out after handover. Most retaining, storm water, site works provisions (BIG TICKET ITEMS) should be dealt with in the first instance-> upfront Beware, putting a deposit down, with the aim of sorting items out later on.... Later on.. is too late to back out Cheers Chris Hi Chris Thanks again for your advice. Appreciate it. Cheers Tarun Re: Pre-Constructions Charges by the builder 9Oct 12, 2021 12:19 pm tarunkumar Hi Everyone, Hope you are well! I am a new member and need your advice. I bought an "house and land" package in West Sydney in March 2021. The land size is 396 sq. meters and two floors house built up area is 244 sq. meters. The land has been settled in April 2021 and the house construction yet to be started as it got delayed due to multiple reasons like builder's office was very slow, DA approval etc. As per the building contract, I have already paid 10% deposit of the contract price and my housing loan installments have been started for the land loan since May 2021. I have already paid 5 months' interest on my loan and the construction has not been started yet. Yesterday, I have received a letter "Authority to Variation" from builder for signature before builder can finalize the construction plan. The builder has asked for more than $18K in addition to the contract price. The key items in the variation form are as follows: 1. ~$8700 to provide timber retaining wall to right hand side and left-hand side boundaries (I have selected landscaping package and as per builder this package doesn't include retaining wall) 2. ~$3000 to achieve energy commitments (R2.5 and R5.0 insulations) 3. ~$2500 to import clean fill to achieve benching level for builders platform (contract includes site preparation and establishment, bulk earthworks for site levelling, cut and fill up to 1 metre and 50 tonne spoil removal allowance) 4. ~$1000 to provide additional 400mm bored concrete piers to dwelling 5. ~$1000 to provide additional underground electrical mains and fibre-optics provision due to location of electrical turret and communications pit As I am new to this country and house construction, kindly suggest 1. Are above charges legitimate and normally paid by all buyers? 2. If not, what should I do to avoid these charges? 3. May I get more such demands in future as the construction yet to start? 4. Can I do something about the delay in construction and the burden of loan installment and rent I have been paying for last 5 months. 4. As HIA contract is in favor of builder, would you suggest to approach fair-trading/NCAT? I appreciate your quick response as I need to reply to builder. Thanks so much! Regards Tarun Hi tarunkumar! Whether the variations, and the corresponding charges, are allowable, depends on what your contract says. You might want to look at your contract’s variations clause. If you intend to pursue action with the Office of Fair Trading or with the NCAT, then you need to first attempt to negotiate with the builder. If that fails, then you can apply for building dispute resolution with Fair Trading. It may also be a good idea to engage a specialist construction lawyer who can assist you with settling the dispute with your builder. Cheers, John Get sound legal advice. We manage Building Disputes, Construction Contracts, Security of Payment. PM for queries. https://www.contractsspecialist.com.au/articles/ Re: Pre-Constructions Charges by the builder 10Oct 12, 2021 8:17 pm Contracts-Specialist tarunkumar Hi Everyone, Hope you are well! I am a new member and need your advice. I bought an "house and land" package in West Sydney in March 2021. The land size is 396 sq. meters and two floors house built up area is 244 sq. meters. The land has been settled in April 2021 and the house construction yet to be started as it got delayed due to multiple reasons like builder's office was very slow, DA approval etc. As per the building contract, I have already paid 10% deposit of the contract price and my housing loan installments have been started for the land loan since May 2021. I have already paid 5 months' interest on my loan and the construction has not been started yet. Yesterday, I have received a letter "Authority to Variation" from builder for signature before builder can finalize the construction plan. The builder has asked for more than $18K in addition to the contract price. The key items in the variation form are as follows: 1. ~$8700 to provide timber retaining wall to right hand side and left-hand side boundaries (I have selected landscaping package and as per builder this package doesn't include retaining wall) 2. ~$3000 to achieve energy commitments (R2.5 and R5.0 insulations) 3. ~$2500 to import clean fill to achieve benching level for builders platform (contract includes site preparation and establishment, bulk earthworks for site levelling, cut and fill up to 1 metre and 50 tonne spoil removal allowance) 4. ~$1000 to provide additional 400mm bored concrete piers to dwelling 5. ~$1000 to provide additional underground electrical mains and fibre-optics provision due to location of electrical turret and communications pit As I am new to this country and house construction, kindly suggest 1. Are above charges legitimate and normally paid by all buyers? 2. If not, what should I do to avoid these charges? 3. May I get more such demands in future as the construction yet to start? 4. Can I do something about the delay in construction and the burden of loan installment and rent I have been paying for last 5 months. 4. As HIA contract is in favor of builder, would you suggest to approach fair-trading/NCAT? I appreciate your quick response as I need to reply to builder. Thanks so much! Regards Tarun Hi tarunkumar! Whether the variations, and the corresponding charges, are allowable, depends on what your contract says. You might want to look at your contract’s variations clause. If you intend to pursue action with the Office of Fair Trading or with the NCAT, then you need to first attempt to negotiate with the builder. If that fails, then you can apply for building dispute resolution with Fair Trading. It may also be a good idea to engage a specialist construction lawyer who can assist you with settling the dispute with your builder. Cheers, John Hi John Thanks for your feedback. I have already consulted the lawyer and signed the variations with some minor changes. Cheers Tarun Unless there were unforeseeable issues with the site, I dont think you should have to pay for contractors errors or poor planning. I'd probably try and be reasonable and… 5 4645 We already paid for somfy motors for the blinds. The quote above was purely for “pre-wiring” so the blinds company can install the motors and blinds. That’s why we… 5 16863 We've had the offer of a short term tenant whilst waiting for CDC/DA home approval and demolition for our knock down rebuild. It would achieve a pretty low rent as it's… 0 13879 |