Browse Forums Building A New House Re: Builder is increasing the price 21May 29, 2022 9:34 pm For the benefit of others here is what the HIA is telling builders about increasing prices https://hia.com.au/-/media/files/qanda- ... delays.pdf https://hia.com.au/-/media/files/managi ... delays.pdf https://www.youtube.com/watch?v=WUGHfN4BPpo Re: Builder is increasing the price 22May 30, 2022 11:57 am Hi Chokyulate How did you go with this? We are in a similar position. We signed the initial contract last year June, then did all selections and variations, and signed the final fixed price contract about 3 months ago and paid the deposit (around $25k). Total price just over $500k. The builder is supposed to commence construction by mid-June (in two weeks time). But last week they emailed to say that we had to pay them another $85k due to cost increases. We do not have that kind of money so would really appreciate any information you and others can share. I have written back to the builder to provide me the clause in the contract they are using to increase the price since we have a fixed price contract. Have not heard back yet. We are based in NSW. I will not name the builder just yet as they will get upset and may claim that we are breaching the contract. Re: Builder is increasing the price 23May 30, 2022 12:04 pm Lkumar Hi Chokyulate How did you go with this? We are in a similar position. We signed the initial contract last year June, then did all selections and variations, and signed the final fixed price contract about 3 months ago and paid the deposit (around $25k). Total price just over $500k. The builder is supposed to commence construction by mid-June (in two weeks time). But last week they emailed to say that we had to pay them another $85k due to cost increases. We do not have that kind of money so would really appreciate any information you and others can share. I have written back to the builder to provide me the clause in the contract they are using to increase the price since we have a fixed price contract. Have not heard back yet. We are based in NSW. I will not name the builder just yet as they will get upset and may claim that we are breaching the contract. Nothing yet, I am looking for lawyer. I can understand where you coming from. It is very tough situation Our work started early last year. It has been delayed a lot already and builder won’t complete the work now Re: Builder is increasing the price 24May 30, 2022 12:31 pm chokyulate Lkumar Hi Chokyulate How did you go with this? We are in a similar position. We signed the initial contract last year June, then did all selections and variations, and signed the final fixed price contract about 3 months ago and paid the deposit (around $25k). Total price just over $500k. The builder is supposed to commence construction by mid-June (in two weeks time). But last week they emailed to say that we had to pay them another $85k due to cost increases. We do not have that kind of money so would really appreciate any information you and others can share. I have written back to the builder to provide me the clause in the contract they are using to increase the price since we have a fixed price contract. Have not heard back yet. We are based in NSW. I will not name the builder just yet as they will get upset and may claim that we are breaching the contract. Nothing yet, I am looking for lawyer. I can understand where you coming from. It is very tough situation Our work started early last year. It has been delayed a lot already and builder won’t complete the work now Thx. Please keep us informed. I don't have the extra $85k to pay so am in a bind. Also, if I pay now, there is nothing stopping the builder to come back and ask for more. Re: Builder is increasing the price 25May 30, 2022 12:51 pm Lkumar chokyulate [Also, if I pay now, there is nothing stopping the builder to come back and ask for more. There is. The contract stipulate a %amount of the contract price is eligible to be claimed for price increases (yes, even in fixed price ones) Dark matter scientist, can breathe underwater, mind reader and can freeze matter just by willing it. Trust me, its in my sig. Re: Builder is increasing the price 26May 30, 2022 1:28 pm Noname Lkumar chokyulate [Also, if I pay now, there is nothing stopping the builder to come back and ask for more. There is. The contract stipulate a %amount of the contract price is eligible to be claimed for price increases (yes, even in fixed price ones) No there is no such clause. Only one provisional item: piering. All else is fixed price as we have completed all selections and they are part of the signed final contract. Re: Builder is increasing the price 27May 30, 2022 1:32 pm Lkumar Noname Lkumar There is. The contract stipulate a %amount of the contract price is eligible to be claimed for price increases (yes, even in fixed price ones) No there is no such clause. Only one provisional item: piering. All else is fixed price as we have completed all selections and they are part of the signed final contract. Trust me, it is in there. They all have it. This is the single most common symptom of people who don't understand every single point in their contract. Dark matter scientist, can breathe underwater, mind reader and can freeze matter just by willing it. Trust me, its in my sig. Re: Builder is increasing the price 28May 30, 2022 2:08 pm Noname There is. The contract stipulate a %amount of the contract price is eligible to be claimed for price increases (yes, even in fixed price ones) I wouldn't mind seeing these clauses. From what I have read these are not allowed in Victoria https://www.consumer.vic.gov.au/licensi ... g-contract Here are relevant clauses in a standard HIA contract Contract price PRICE EXCLUDING GST: GST ON THE ABOVE AMOUNT: THE CONTRACT PRICE IS: $.00 The Contract Price may be adjusted for one of the following reasons:
Re: Builder is increasing the price 29May 30, 2022 3:06 pm HIA has produced documents that clearly state: If you are using a fixed price contract then the builder is responsible for any costs above the fixed price except for those costs: • incurred because of variations requested by the client or • matters outside the control of the builder, such as a fire, war, strike or natural disaster. . Under a fixed price contract, unless there is a contractual provision which allows you to, you cannot pass on a price increase. Re: Builder is increasing the price 30May 30, 2022 3:15 pm *sigh* Anyone who was on a fixed price contract before covid really started to play havoc with supply chains and and prior the addition of various explicit Covid clauses into standard contracts will have had something like the below in their contract. (basically all of you guys saying "derpdy derp derp I dont have any such clause. Blah blah blah). The reason that various covid clauses started appearing was because at some point Covid related delays and increases aren't really "unforeseeable" or "out of the builders control" anymore. However for a fairly significant part of the period in question one could argue that the craziness that has seen raw materials increase exponentially and supply to dry up was unforeseeable and out of the builders control (pandemic falls into the same category as natural disaster for the purpose of this argument). It happened so quickly and severely that the reality is that both builder and owner should be afforded teh right to cancel the contract. So if you don't think you have such clauses, because they arent explicit, think again. (This is from a Victorian HIA contract BTW) Like ⋅ Add a comment ⋅ Pin to Ideaboard ⋅ Dark matter scientist, can breathe underwater, mind reader and can freeze matter just by willing it. Trust me, its in my sig. Re: Builder is increasing the price 31May 30, 2022 3:18 pm to be honest i could care less to argue with you about these clauses too. Go and argue with your builder. Take it to court if you want. let me know how you all get on. Dark matter scientist, can breathe underwater, mind reader and can freeze matter just by willing it. Trust me, its in my sig. Re: Builder is increasing the price 32May 30, 2022 3:35 pm Noname to be honest i could care less to argue with you about these clauses too. Go and argue with your builder. Take it to court if you want. let me know how you all get on. And to be honest I don't care for your attitude. BTW what is a variation ... Re: Builder is increasing the price 33May 30, 2022 3:42 pm theshack And to be honest I don't care for your attitude. Do I give you the impression that I could give two $hits what you think about my attitude? I'm literally having to explain basic contract terms to people who have signed stuff they evidently DONT understand and think they know what they are talking about. Its like dealing with walking dunning-kreuger graphs on a daily basis. theshack BTW what is a variation ... Case in point. Also covered in your contract. Dark matter scientist, can breathe underwater, mind reader and can freeze matter just by willing it. Trust me, its in my sig. Re: Builder is increasing the price 34May 30, 2022 3:56 pm Noname Do I give you the impression that I could give two $hits what you think about my attitude? I'm literally having to explain basic contract terms to people who have signed stuff they evidently DONT understand and think they know what they are talking about. Its like dealing with walking dunning-kreuger graphs on a daily basis. theshack BTW what is a variation ... Case in point. Also covered in your contract. LoL, I already have had several variations triggered by Clause 12.1 so I am familiar with it also what a variation is and isn't. Re: Builder is increasing the price 35May 30, 2022 4:02 pm theshack Noname Do I give you the impression that I could give two $hits what you think about my attitude? I'm literally having to explain basic contract terms to people who have signed stuff they evidently DONT understand and think they know what they are talking about. Its like dealing with walking dunning-kreuger graphs on a daily basis. theshack BTW what is a variation ... Case in point. Also covered in your contract. LoL, I already have had several variations triggered by Clause 12.1 so I am familiar with it also what a variation is and isn't. So why ask the question? if its to get a rise out of me, jokes on you - this is my usual crotchety self. Evidence still suggests you dont understand your contract though, given your link of the consumer affairs blurb. Forget what that says, the relevant clauses are actually in the contract you signe, including any special conditions that the CA website cant account for. Dark matter scientist, can breathe underwater, mind reader and can freeze matter just by willing it. Trust me, its in my sig. Re: Builder is increasing the price 36May 30, 2022 4:05 pm theshack LoL, I already have had several variations triggered by Clause 12.1 so I am familiar with it also what a variation is and isn't. Yeah, you would be aware that the general costs of materials and labour is not included as part of 12.1. 'Circumstances beyond the Builder's control' refers to things like fire, war, strike or natural disaster. HIA themselves have confirmed this, but this guy thinks he knows better. https://hia.com.au/resources-and-advice/covid-19/managing-your-business/articles/dealing-with-material-cost-increases If they are doing it through Prime Cost items or Provisional Sums - that's a different story. Re: Builder is increasing the price 37May 30, 2022 4:15 pm orionnebula theshack LoL, I already have had several variations triggered by Clause 12.1 so I am familiar with it also what a variation is and isn't. Yeah, you would be aware that the general costs of materials and labour is not included as part of 12.1. 'Circumstances beyond the Builder's control' refers to things like fire, war, strike or natural disaster. HIA themselves have confirmed this, but this guy thinks he knows better. https://hia.com.au/resources-and-advice/covid-19/managing-your-business/articles/dealing-with-material-cost-increases If they are doing it through Prime Cost items or Provisional Sums - that's a different story. This is POST 2 years after the fact. Pre that, Pandemic is included in the list of unforseeable events well into early mid pandemic. The changes to interpretation applies more recently. Just atke a look at the dates of your article. I KNOW this because an insuere i worked tried this on in the early days of the pandemic and was able to decline a whole bunch of stuff on teh vbasis that the pandemic was effectively a force majeure. Timing matters, clown Dark matter scientist, can breathe underwater, mind reader and can freeze matter just by willing it. Trust me, its in my sig. Re: Builder is increasing the price 38May 30, 2022 4:20 pm just ask yourselves why contracts are being canceled by builders when increases arent being paid if its all illegal or unfair contract terms? Show me some cases where the builder has been directed by the court to build at a loss? FML, sometimes i wonder how you people tie your shoes in the morning. Dark matter scientist, can breathe underwater, mind reader and can freeze matter just by willing it. Trust me, its in my sig. Re: Builder is increasing the price 39May 30, 2022 4:36 pm Hi Everyone, I have been doing some deep thinking on this issue over the past few months as I live and breathe it every day and am around people in this sector, and quite frankly, I can't picture how the volume building sector is going to get out of this mess in the short of even medium term. This sector is based on who can build the cheapest home with as many sparkly things in their display villages. The whole sector is operating at an unsustainable loss and really hasn't been making any meaningful profits since the 90's. With everything going on in the media and interest rate rises, I know for a fact that many companies are experiencing really low home sales at the moment. This means low deposits and cashflow issues. The machine is not getting fed and the spiral is getting worse. Someone needs to be first and brave enough to start raising their prices to a sustainable level so others can follow. It is impossible to expect a builder who is still signing contracts at $1500-1800/sqm to actually finish your home without a risk of either going broke mid build or hitting you up for a big variation. I know for a fact that several of the builders who people often refer to in this forum are struggling badly, so everyone, just be careful before handing cash over. To those who are in a contract and their builder asks for a variation to finish, before you go all legal, just think about how much more it is going to cost you if your builder goes broke mid build. I have lived through it and it is a nightmare. So make a rational economic decision even though your builder may have not right to that variation. It is survival of the fittest at the moment. Anyway, that is my 2cents 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: Builder is increasing the price 40May 30, 2022 4:46 pm Hi Simeon, just wanted to say thank you for taking the time to make these posts. As someone who would like to build in the next 2-3 years, but in no rush or hurry to do so, it helps me confirm my thoughts that waiting is the best economic decision for me right now. Hi Mofflepop, I would recommend finding a building designer to prepare plans, they should design to your specified budget. The benefit is you can tender the project out… 9 20626 Wow I hadn't realised things had gotten that pricey in just a couple of years since I built, that is crazy with how much land is now costing if you aren't lucky enough to… 3 7209 |