Browse Forums Building A New House 1 May 19, 2009 4:36 pm I just wondered if i could get your advice on a problem we are having - We put a deposit on our land and house package in June 08. We were told our settlement would be in January 09. In September 08 we received formal pre-approval from the bank but due to our land still not being settled, our bank cancelled the application as you are only given 6mths to take up the offer with the bank. Unfortunatly for us this has meant that the bank had to re-process our application, which means we are treated like a new customer and have to suffer the effects of the current economic crisis. This was in March 09 and we still dont have formal approval. We have told our builder that we wish to cancel our contract due to the fact that we do not have formal approval. We havent received formal approval because our bank stuffed up our valuation and under valued the house & land by $17k. So because we cant come up with those funds our formal was denied. The builder is now demanding $7000k in payments for the finance falling through, even though it was through no fault of ours. What are my rights in this matter and has anyone else gone through a similar problem? Any advice or thoughts would be great Re: What rights do i have?? 3May 19, 2009 6:57 pm If you are cancelling, depending on what stage you are up to, you need to pay for what has been done (i.e soil test, property info, slab designs, colour selections, plans etc etc etc). Your builder should be able to provide you with a broken down invoice. Re: What rights do i have?? 4May 20, 2009 9:43 am I have a similar issue. Building with Metricon and thought I might have some problems with the block we picked even though the sales rep told me 10k will cover all site works on this block, paid the $1000 for site and soil test asking to be informed if there were going to be problems. Next thing I get a pelimenry contract (which I didn't ask for) with 80k+ worth of site works due to the block to which I tell them to stick it. I chose a different block that is flat and ask for the same thing they slug me another 1k to do the testing ect. I've just recived an invoice for 5k for work already rendered for the first block ? so they basically * to me about building costs on my first block and when i pull out on the block they want to charge me for the sales rep work and plans ect that I didn't ask for. So basically they want me to give them 5k for no return, I'm pretty close to just saying keep my 2k and telling them to stick it and go build with someone else. Why should I pay them for there mistake. Re: What rights do i have?? 5May 20, 2009 9:58 am I guess it would be best to talk to your solicitor. Most importantly, as "klscomps" mentioned, it depends on whether you signed the contract and what's in the contract details... And I hope you did get your solicitor to check the contract before you sign it? Good luck! Re: What rights do i have?? 6May 20, 2009 10:03 am Tom I have a similar issue. Building with ***** and thought I might have some problems with the block we picked even though the sales rep told me 10k will cover all site works on this block, paid the $1000 for site and soil test asking to be informed if there were going to be problems. Next thing I get a pelimenry contract (which I didn't ask for) with 80k+ worth of site works due to the block to which I tell them to stick it. To give you comprehensive site costs, it is standard procedure with the majors to get a tender/preliminary contract. Otherwise any figure they give you is simply a guesstimate. You may not have asked for it, but by paying your 1k you have authorised them to do a costing for you. If you are with M3tricon, you would have done a walk-thru, this along with your 1k deposit logically leads to a tender/preliminary contract. Tom I chose a different block that is flat and ask for the same thing they slug me another 1k to do the testing ect. Different block, needs a new soil test and contour survey. Tom I've just recived an invoice for 5k for work already rendered for the first block ? so they basically * to me about building costs on my first block and when i pull out on the block they want to charge me for the sales rep work and plans ect that I didn't ask for.. This is crap. You have paid all you have to in regards to getting the preliminary contract. You have two sets of soil tests and two contour surveys. You have paid the 2k for those and that's fair. You don't owe them any more money. But I would say your sales consultant was inexperienced or there was a lot of unforseen issues with your block that the soil report revealed. I doubt it would have been an intentional lie about the site costs. Tom So basically they want me to give them 5k for no return, I'm pretty close to just saying keep my 2k and telling them to stick it and go build with someone else. Why should I pay them for there mistake. Your call, you can see where you are pricing wise with the second block... if you still decide to walk away, you will lose 2k and that is fair. But don't pay them any more. I leave you to fend for yourself, figure things out yourself. Terrence Malick Re: What rights do i have?? 7May 20, 2009 10:19 am Thanks for the comments, I'll talk to my solicitor about the invoice. It's really they 5k they are asking on top of the 2k worth of deposits I'm up in arms about, I only ever signed a form saying to do soil and site on the block. I never signed a contract of any kind thank god. I'm liking my sales rep less and less each day, I ask if we can talk about prices of colourbond roof, different bricks ect and he basically tells me they are set by the guys in Melbourne and there is no room for negotiation on these prices. That does not sound right to me at all. Re: What rights do i have?? 8May 20, 2009 10:25 am He's right. With the big builders there is no room for negotiation on pricing. It is how it is, like it or lump it unfortunately. I almost went to site start with M3tricon then pulled out, and we are nearly at site start with a different major. One thing they all have in common is there non-negotiaion on pricing. But the base price is low and you just have to upgrade only what you need to. Do what you can after handover. If you haven't signed anything, they can't demand you pay more. You have paid for the work they've done. Are you in Brisbane? I leave you to fend for yourself, figure things out yourself. Terrence Malick Re: What rights do i have?? 9May 20, 2009 10:47 am I'm happy to pay for work that has been done, but how one earth do i to check whether what they are charging us for is actually correct? According to the bank we have the right to cancel our application with them as long as we havent signed our mortgage documents, they also mentioned that at any stage prior to signing the mortgage documents we can end any dealings with our broker. We did read through our contract prior to signing and it did mention subject to finance, but apparently they can still charge us for work done so far? What i find so stupid is that they are going to charge us for work they did ie engineers reports etc prior to us getting formal approval, surely its there own fault, you think they would have waited to have formal approval before they went ahead and did these things. I would love to know how they have come up with the $7k figure. We have requested a statement from them itemising the costs so will be interesting to see what they have on there. One things for sure we wont be paying anything for the work the conveyancer or broker has done as these were free services. I'm sure these builders just think we are all stupid and wont question any decisions they make. Re: What rights do i have?? 10May 20, 2009 11:02 am Nah NE victoria. Yeh I'm not too worried about the price of extras just more making sure I'm not ripped off or being fed the wrong information. Things like I have asked for the Breeze facades to be put into the preview and my sales rep tells me that it's a new facade and there are currently no plan avaliable for the santorini 26 with this facades and that it may be some time. Even tho the website clearly shows it avaliable and I have seen house and land packages with this very setup. Re: What rights do i have?? 11May 20, 2009 11:13 am bs84 I'm happy to pay for work that has been done, but how one earth do i to check whether what they are charging us for is actually correct? According to the bank we have the right to cancel our application with them as long as we havent signed our mortgage documents, they also mentioned that at any stage prior to signing the mortgage documents we can end any dealings with our broker. We did read through our contract prior to signing and it did mention subject to finance, but apparently they can still charge us for work done so far? What i find so stupid is that they are going to charge us for work they did ie engineers reports etc prior to us getting formal approval, surely its there own fault, you think they would have waited to have formal approval before they went ahead and did these things. I would love to know how they have come up with the $7k figure. We have requested a statement from them itemising the costs so will be interesting to see what they have on there. One things for sure we wont be paying anything for the work the conveyancer or broker has done as these were free services. I'm sure these builders just think we are all stupid and wont question any decisions they make. As others have said, ask for a breakdown of costs... but there will be costs. The part I've highlighted... I know it's of no help, but it's probably unreasonable to think that they wouldn't have been moving forward in the time frame that they've had. If you had gotten formal approval and they'd done nothing, you'd probably be pretty peeved that you then had to wait months while they did stuff that they could have been doing while waiting for formal approval. What exactly have you done? You signed for the house and land package..... Have you done your colours? Have you finalised any changes to the house, structural or otherwise? Have you done your electrical requirements? Have you selected tiles? They have done their engineering and soil and contours. Have they produced further drawings besides the standard drawings for that house? For a comparison, we pulled out just before site start and we were charged 4k. We were intially charged more (around 7k from memory) but I fought them down to 4k. But and this is a big but, we pulled outr because of their incompetency. We had waited months for correct drawings etc, etc. If we had pulled out for our own reasons, nothing to do with their standard of work, I would have accepted paying 7k. But they did send me an itemised breakdown of all costs when I requested one. I leave you to fend for yourself, figure things out yourself. Terrence Malick Re: What rights do i have?? 12May 20, 2009 11:49 am joles bs84 I'm happy to pay for work that has been done, but how one earth do i to check whether what they are charging us for is actually correct? According to the bank we have the right to cancel our application with them as long as we havent signed our mortgage documents, they also mentioned that at any stage prior to signing the mortgage documents we can end any dealings with our broker. We did read through our contract prior to signing and it did mention subject to finance, but apparently they can still charge us for work done so far? What i find so stupid is that they are going to charge us for work they did ie engineers reports etc prior to us getting formal approval, surely its there own fault, you think they would have waited to have formal approval before they went ahead and did these things. I would love to know how they have come up with the $7k figure. We have requested a statement from them itemising the costs so will be interesting to see what they have on there. One things for sure we wont be paying anything for the work the conveyancer or broker has done as these were free services. I'm sure these builders just think we are all stupid and wont question any decisions they make. As others have said, ask for a breakdown of costs... but there will be costs. The part I've highlighted... I know it's of no help, but it's probably unreasonable to think that they wouldn't have been moving forward in the time frame that they've had. If you had gotten formal approval and they'd done nothing, you'd probably be pretty peeved that you then had to wait months while they did stuff that they could have been doing while waiting for formal approval. What exactly have you done? You signed for the house and land package..... Have you done your colours? Have you finalised any changes to the house, structural or otherwise? Have you done your electrical requirements? Have you selected tiles? They have done their engineering and soil and contours. Have they produced further drawings besides the standard drawings for that house? For a comparison, we pulled out just before site start and we were charged 4k. We were intially charged more (around 7k from memory) but I fought them down to 4k. But and this is a big but, we pulled outr because of their incompetency. We had waited months for correct drawings etc, etc. If we had pulled out for our own reasons, nothing to do with their standard of work, I would have accepted paying 7k. But they did send me an itemised breakdown of all costs when I requested one. Our selections are done and also our engineers report is also done. The reason we decided to pull out is because our finance has fallen through, through no fault of our own. Unfortunatly none of this would have happened if the builder hadnt delayed settlement for over 12mths. What would be reasonable items to have to pay for and what would you suggest are reasonable amounts for paying of these items? Re: What rights do i have?? 13May 20, 2009 4:40 pm bs84 Our selections are done and also our engineers report is also done. The reason we decided to pull out is because our finance has fallen through, through no fault of our own. Unfortunatly none of this would have happened if the builder hadnt delayed settlement for over 12mths. Not that I am having a go at you on this, but I would find it hard to believe that lack of finance is the builders fault. I am not sure how you can argue this point as you are making the purchase here. If the bank has denied you the finance, then the fault ****** with you. bs84 What would be reasonable items to have to pay for and what would you suggest are reasonable amounts for paying of these items? Depending on how much they have done. You have mentioned all selections have been done and engineers report, so likely payment would be what the builder is expecting from you. Good luck. Re: What rights do i have?? 14May 20, 2009 4:54 pm bs84 joles bs84 I'm happy to pay for work that has been done, but how one earth do i to check whether what they are charging us for is actually correct? According to the bank we have the right to cancel our application with them as long as we havent signed our mortgage documents, they also mentioned that at any stage prior to signing the mortgage documents we can end any dealings with our broker. We did read through our contract prior to signing and it did mention subject to finance, but apparently they can still charge us for work done so far? What i find so stupid is that they are going to charge us for work they did ie engineers reports etc prior to us getting formal approval, surely its there own fault, you think they would have waited to have formal approval before they went ahead and did these things. I would love to know how they have come up with the $7k figure. We have requested a statement from them itemising the costs so will be interesting to see what they have on there. One things for sure we wont be paying anything for the work the conveyancer or broker has done as these were free services. I'm sure these builders just think we are all stupid and wont question any decisions they make. As others have said, ask for a breakdown of costs... but there will be costs. The part I've highlighted... I know it's of no help, but it's probably unreasonable to think that they wouldn't have been moving forward in the time frame that they've had. If you had gotten formal approval and they'd done nothing, you'd probably be pretty peeved that you then had to wait months while they did stuff that they could have been doing while waiting for formal approval. What exactly have you done? You signed for the house and land package..... Have you done your colours? Have you finalised any changes to the house, structural or otherwise? Have you done your electrical requirements? Have you selected tiles? They have done their engineering and soil and contours. Have they produced further drawings besides the standard drawings for that house? For a comparison, we pulled out just before site start and we were charged 4k. We were intially charged more (around 7k from memory) but I fought them down to 4k. But and this is a big but, we pulled outr because of their incompetency. We had waited months for correct drawings etc, etc. If we had pulled out for our own reasons, nothing to do with their standard of work, I would have accepted paying 7k. But they did send me an itemised breakdown of all costs when I requested one. Our selections are done and also our engineers report is also done. The reason we decided to pull out is because our finance has fallen through, through no fault of our own. Unfortunatly none of this would have happened if the builder hadnt delayed settlement for over 12mths. What would be reasonable items to have to pay for and what would you suggest are reasonable amounts for paying of these items? I will dig out my old paperwork and find my itemised list of charges. May take me a day or two... could be anywhere. I leave you to fend for yourself, figure things out yourself. Terrence Malick Re: What rights do i have?? 15May 21, 2009 10:32 am mattydals bs84 Our selections are done and also our engineers report is also done. The reason we decided to pull out is because our finance has fallen through, through no fault of our own. Unfortunatly none of this would have happened if the builder hadnt delayed settlement for over 12mths. Not that I am having a go at you on this, but I would find it hard to believe that lack of finance is the builders fault. I am not sure how you can argue this point as you are making the purchase here. If the bank has denied you the finance, then the fault ****** with you. bs84 What would be reasonable items to have to pay for and what would you suggest are reasonable amounts for paying of these items? Depending on how much they have done. You have mentioned all selections have been done and engineers report, so likely payment would be what the builder is expecting from you. Good luck. I'm not blaming the builder for what has happened with the bank, its the bank's fault as they messed up our valuation What i meant by saying if the builder hadnt taken so long to settle was that our previous formal approval would have still stood and we wouldnt have had the problems with the bank and the valuation pop up because a new formal approval would never have been needed. 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