When is fixed price not fixed price?

mattwalker · May 08, 2007 6:01 pm

I agree!

another example....

My sister is building a house at the moment and included in the sites costs as an allowance for some scaffolding whilst the brickie was there.

The scaffolding never came and yet the job was completed??? How can this be.

My sister rang the builder on Monday and in a mad scramble told her that the $650 allowed would be credited back at the end of the building.

Now if she had not seen that, would it have been credited back??

The builder was Northridge (read Henley) by the way.

Matt

Casa2 · May 08, 2007 11:34 pm

Matt,

What's this $650 credited back at the end of the building! Are they crazy?

My suggestion for your sister is:

1) Get confirmation in writing from the builder that the price will be reduced by $650 (an email will do).

2) Take the $650 out of the next progress payment.

Cheers,
Casa

3timesbuilda · May 09, 2007 3:34 pm

Both previous times I have built, I have got money back at the end including a full itemised listing of costs that were incurred. I didn't have to chase for this.

Provisional allowances are essential when dealing with the unknown. Using others to cut out rock may well affect the integrity of the pad/slab and the builder is responsible for that so why should they let you use someone who may be a fly by night 2 bit crook. As long as their fees are consistant then you have a choice when choosing the builder.

3xb

vanderlay · May 10, 2007 10:19 am

Back to Perry - any response from PD yet?? Aside from the last call from your CSR??

perryr · May 10, 2007 11:49 am

Hi Vanderlay. So far I've had nothing. Nix. Nadda.

So much for customer service! About to shoot off an email to them!

Perry

vanderlay · May 10, 2007 11:58 am

hmmm....good customer service is easy when everyone's happy....you see the real service level when things go wrong....

Dont they realise the longer they take to get back to you the more p***ed off you get!!!

Casa2 · May 10, 2007 1:18 pm

vanderlay

hmmm....good customer service is easy when everyone's happy....you see the real service level when things go wrong....

Dont they realise the longer they take to get back to you the more p***ed off you get!!!

And the worse PD's reputation on this forum and all its viewers and their friends and acquaintances and...

vanderlay · May 10, 2007 1:23 pm

Quote:

And the worse PD's reputation on this forum and all its viewers and their friends and acquaintances and...

and with people about to start building with them....ie - us!

perryr · May 10, 2007 3:02 pm

A small update to the thread - I called the CSR, and it seems that there's some work going on behind the scenes re costing, which is why they haven't gotten back to me.

That could mean anything, but I get the impression that there are a few people with some high stress levels over this (apart from just me!).

Perry

vanderlay · May 10, 2007 3:08 pm

Quote:

That could mean anything, but I get the impression that there are a few people with some high stress levels over this (apart from just me!).

You would hope so....with the way they have gone about things!!

htarash · May 16, 2007 11:26 am

Hello Perry,

I have been keep looking at your blog to get some update on your situation, but looks like you are sick of updating that now.

I am working for a German company and I think I am getting the German mentality. As you know, I canceled mine over $300.00, when I believed I should have not paid it. I think that is a trick with PD, when they have you, they really start charging you big money. End of the day, I think I won over this decision and it was PD’s lost. I made my contract with Henley, Got more standard inclusions and also used this case to get some further special discounts from Henley, which they happily did + as you know I have 3 sq of more house area for less price. So I can not complain, and so far (ONLY SO FAR) they have been good.

perryr · May 16, 2007 12:30 pm

I'll update the blog today. There's no real news - a few phone calls telling me that I'll hear something soon.

I'm glad things have worked out for you.

Perry

Hennig · May 16, 2007 9:52 pm

Perry,
sorry to read about your plight. It's an interesting situation though, seeing how much they want your business and how much they are willing to give. It may assist a lot of other people that are in the same predicament.
I agree with some of the other posts, you should stick to your guns, but be prepared for a counter offer. It's funny how they are willing to talk your ear off when they want your business, and less than accomodating when things aren't so good.
Depending on your contract amount will determine how much they are willing to flex. The larger the amount, the more likely they are to bend. Due to the larger profit percentage that go with big contracts, they should be able to take a hit without it hurting their profit margin too much.
My neighbour recently finished his home, he said that he knew of a guy that had worked in the building game who could help them confirm their costs - kind of what you are facing. I'll catch up with him and see if he can give me a name or contact details or something. It may be nothing, but it may help.
Keep you posted.

perryr · May 16, 2007 10:09 pm

Thanks Hennig, I appreciate your interest. It's amazing how much support comes from people who we have never met.

Still no news today. I should update the blog though. People are wondering what's going on.

Perry

htarash · May 16, 2007 10:13 pm

Perry,

Please make sure you put everything in writing (email) with them, and maybe this way you can get your downpayment back, when worse come to worse.

Hennig · May 16, 2007 10:27 pm

Cool blog Perry,

I'm new at this forum thing so I wasn't aware of the bits 'n pieces down the bottom.
I agree, it makes you feel better knowing that there are other people out there who are going through the same thing. We've been in our new house for nearly 12 months but are at that ae where all of our friends and workmates are building (seems the thing to do). Maybe due to miving into a new area also, go figure.

Helps to be able to vent though.

Agree with htarash, get it all in writing, ask to deal with an area manager or the like if you aren't happy with the CSR, go as high as you can.

Got some details, no phone number ar that, just a website. Haven't had a chance to check it out, so please don't shoot the messenger.
www.residentialinformationsolutions.com.au
Long I know, don't know how he managed to text that one in 1 go.

Let me know how you go.

H

grime · May 16, 2007 10:28 pm

From: http://www.bssdesign.com.au/porterdavis.html then click on Downloads...Consumer guide
"The so-called fixed price contract is a misnomer - most such contracts allow the builder to pass on legitimate cost increases to the owner, eg. where rock is encountered during excavation or for variations brought about by other circumstances which the builder could not reasonably have foreseen."

perryr · May 17, 2007 9:38 am

Grime - I've seen that statement in the "Fixed Price Tender" document. I think that the increase in cost they are trying to set me up for don't fall into that category, as the "Engineers have had another look at the reports".

In other words, they gave me a price, and now they have changed their mind.

As someone mentioned earlier in this thread, I wouldn't have wanted them to build on a slab which would be unstable - however if they had presented the actual costs at Tender, we would have pulled out at that stage.

Instead, we wasted time going as far as we did, and they took an additional deposit from us (which I WILL be getting back....)

Perry

PS: Today is the day I call them, and ask for an area manager to call me back with some facts. This has gone on long enough!

perryr · May 17, 2007 9:42 am

Hennig - Thanks for the web site link. I was thinking about hiring a local geotechnical engineer to go through all the computations and soil test to validate what the builder has done.

There are two reasons - the first is to see if the builder is being fair dinkum with us. If we need screw piles, then we need screw piles.

The second reason is that if we decide not to go ahead with the current builder, I'd like some advice on alternative building methods. For example, is our block better suited to strip footings and stumps? If so, that's what we will build, and perhaps save ourselves a shedload of money.

Cheers
Perry

Hennig · May 17, 2007 9:20 pm

Yeh, better to be safe than sorry.

Looking through our paperwork, we had a m-d slab with piers (about 50 of them) due to being on a P site (apparently due to fill). Can anyone tell me what the difference is between screw piles and concrete piers?

If you go with another builder, might benefit from getting a copy of the soil test and survey from the builder (if you don't have them alread).
The privacy act certainly has its benefits when it comes to things like that.

Where will you go from here? Change builder?

I don't know if I mentioned it earlier but we went with a local builder for the service. I don't know if I'd do it again as we certainly paid for it. So much so that our budget went on the house and that's about it.
The big builders certainly have more buying power, so it's a hard choice. If you can put up with being a number and the poor service, they seem to be the way to go.