Browse Forums Building A New House 1 Oct 13, 2021 6:14 pm Signed a construction contract earlier this year and builder rang me a week ago telling they want to cancel the contract or increase the price. Land will be registered next month. Has anyone experienced this? What are the options and what is the best approach in this situation? What are the pitfalls once should watch out for? Appreciate any advice. Re: Builder wants to cancel contract or increase the price 2Oct 13, 2021 8:45 pm Hey Housenoob Welcome to the forum What you have experienced is a sign of the covid times. Costs have gone up, and the builder is giving you the option to the pay the increases or cancel the contract, unfortunately you will forgo your deposit refund, copyright to the plans and time wasted Next time around you might consider doing your own plans and engineering and getting 3 builders to quote. At the first sign of delays, inconsistencies, excuses, price gouging on variations, then pull out take you plans elsewhere. I was only talking to someone yesterday who was waiting 6 months, builder kept blaming others for the delays, Client kept getting wacked with price increases ...finally decided to give the builder 14 days to sort everything out... now they are prepared to cancel and loose $10k deposit, sell their block, sadly It's all too hard. Goodluck next time around Designer,Engineer (Civil,Const & Envir),Builder,Concrete & Masonry Contract.Struct Repairs Re: Builder wants to cancel contract or increase the price 3Oct 14, 2021 7:39 am Due to Covid 19 disruptions and disruptions to the supply chain building costs have risen and will continue to do so. This is not builders fault and the builder is not your insurance against rising prices. Many builder are stuck on contracts signed before price rises and the only options are now to plead that the price rises are beyond builder's control and ask for more or end the contract. If the contract ends you will not be in better position because new builder will use current prices which are higher. The days of building contracts without cost escalation clauses will soon be over. 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: Builder wants to cancel contract or increase the price 4Oct 14, 2021 9:55 am So if I understand correctly, the price in the contract means nothing and asking for a price increase is not a breach of contract? When price goes down, builder keeps the extra profit to themselves. But when price goes up, the home owner has to pay. How is this fair? Re: Builder wants to cancel contract or increase the price 5Oct 14, 2021 10:14 am housenoob So if I understand correctly, the price in the contract means nothing and asking for a price increase is not a breach of contract? First you need to understand the HIA & MBA contract..for that you weren't prepared. The contract only becomes fixed once they start on site ie put the slab down Any unforeseen consequences out of the builders control can incur price increases, eg, covid lockdowns, price increases, material shortages.. you get the gist housenoob When price goes down, builder keeps the extra profit to themselves. Yep... housenoob But when price goes up, the home owner has to pay. Yep... housenoob How is this fair? If you want fair get your own drawings , engineering, data/proofs and contract expert involved It's the builders contract it favours them OT, Pay the increase and still be delayed on site construction... you are on a hiding to nothing Builder keeps winning as per my example above. Eventually the penny drops for the owner to pull out Designer,Engineer (Civil,Const & Envir),Builder,Concrete & Masonry Contract.Struct Repairs Re: Builder wants to cancel contract or increase the price 6Oct 14, 2021 11:04 am StructuralBIMGuy The contract only becomes fixed once they start on site ie put the slab down Do you mind sharing which clause in MBA or HIA contract that states this? Re: Builder wants to cancel contract or increase the price 7Oct 14, 2021 11:24 am All builders would be aware of this... they do get free legal advise from the MBA and HIA If you have the money to challenge the builder ... go for it Designer,Engineer (Civil,Const & Envir),Builder,Concrete & Masonry Contract.Struct Repairs Hi All, We signed a prelim agreement last year (May 2022) and paid deposit to a builder. However, we didn't go ahead with them and never signed a contract. We ended going… 0 2311 Just to makea point about this, an approach that some people have found sucessful in negotiating these rises down, Is to provide some workings to the builder, specifying… 4 81724 Thanks for the response! However, it's have been sorted. But for others benefit here is what we had to do. Unfortunately, it's not straightforward. BCC washed their hands… 3 7205 |