Browse Forums Building A New House 1 Nov 14, 2009 7:45 am Ive just picked up a copy of the standard EB contract and it has a ridiculous about of $15 per day for L Damages. $15 a day is certainly not an incentive for EB to complete the contract on time Has anyone successfully negotiated this amount???? Re: $15 a day Liquidated Damages with EB - - Is this negotiable? 2Nov 14, 2009 7:59 am If you can negotiate something better before you sign your contract good on you. Otherwise what is in your contract will stay. Where you are coming from is where you are going to... Re: $15 a day Liquidated Damages with EB - - Is this negotiable? 5Nov 14, 2009 2:11 pm you can try and negotiate it, we have a private builder and we have $60 per calender day, to cover our rent and a bit extra.. mind you we wont be needing it as we are 7 weeks into our build and have been told only another 3-4 weeks to go! Our contract had a 118 calender day build time! Custom build Gold Coast . My build : https://forum.homeone.com.au/viewtopic.php?f=31&t=21952 Its all happening!!! Our build started 24 September !!!! Re: $15 a day Liquidated Damages with EB - - Is this negotiable? 6Nov 14, 2009 2:45 pm The standard varies from state to state. Judgling from the experiences of people on this forum, NSW seems to be really hard done by. In Vic it's usually $250 per week - which still isn't enough, with rents in the outermost suburbs over $300 pw, but better than nothing. You can always try to negotiate, but the volume builders will usually tell you to take it or leave it. Re: $15 a day Liquidated Damages with EB - - Is this negotiable? 7Nov 14, 2009 3:06 pm We are not with EB, but our contract states $20 a day and this was non negotiable (and yes we tried to change it) However, our contract also says 365 days, so if they go over that there will really be something wrong. Blog:http://tamdaz-themajestic.blogspot.com The Majestic - Henley - Adelaide Thread:https://forum.homeone.com.au/viewtopic.php?f=31&t=20635 Day 200 23-4-10 Re: $15 a day Liquidated Damages with EB - - Is this negotiable? 8Nov 14, 2009 3:55 pm People, first question to ask when you walk into a dispaly home is, "what is your liquidated damages amount". If it's less than $250 per week, walk straight out. If we all do this, we'll establish a new fairer standard. By the way, this is still way too low. It should be more like $500 per week, but I'm being genrous to the builder. Anything less is immoral. Don't ask about the liquidated damages amount once you're too far down the process. You have no negotiation power and get lumbered with a ridiculous amount. From what I understand, Victoria has $250 per days since by legislation that is the minimum legal amount. NSW has no minimum legal and the HIA contract, which looks after builders, builders and builders, has a default liquidated damanges amount of $1 per week. That is, if you leave it blank, then it's $1 per week. Also, when asking the liquidate damages amount, ask the associated quetion of how long will it take to build. You can always have a very generous liquidated damades amout and double the real build time Nine months should be long enough to build a two storey brick veneer house. And generously so. Anything more than this would have to be an unusual design. The absolute maximum, for a custom full brick house on a sloping block with three levels would be one year. One year, not one year plus Christmas because when the contract is for one year you can't avoid Christmas. Remember, ask these questions up front. Do others a favour and walk into display homes your not even interested in and ask for the build time and liquidated damages amount. When they won't answer your question or give a figure of less than $250 per week or a build time of more than nine months, walk out in disgust shaking your head. Eventually builders will realise we're not a bunch of bunnies waiting to be devoured by the wolves. Demolition August 2009, Construction Started September 2009, Completed December 2010 Re: $15 a day Liquidated Damages with EB - - Is this negotiable? 9Nov 14, 2009 5:07 pm Casa2 Remember, ask these questions up front. Do others a favour and walk into display homes your not even interested in and ask for the build time and liquidated damages amount. When they won't answer your question or give a figure of less than $250 per week or a build time of more than nine months, walk out in disgust shaking your head. Eventually builders will realise we're not a bunch of bunnies waiting to be devoured by the wolves. My signature is distracting people from my wise posts ... Re: $15 a day Liquidated Damages with EB - - Is this negotiable? 10Nov 14, 2009 5:12 pm My standard HIA contact had nothing about $$$ if time blows out. It's not like there is even a spot for my builder to write $0. Re: $15 a day Liquidated Damages with EB - - Is this negotiable? 11Nov 14, 2009 5:27 pm buildingwithhamra My standard HIA contact had nothing about $$$ if time blows out. It's not like there is even a spot for my builder to write $0. That's ridiculous. It's a basic right - if they don't meet the terms of the contract, then what? Nothing....? Agreeing to that would be crazy. Perhaps this needs to be raised in parliament in the states where it's a problem. Re: $15 a day Liquidated Damages with EB - - Is this negotiable? 12Nov 15, 2009 11:46 am I think it's so hard to "negotiate" with them ... and even if you get ahead at an early stage, they can change it later on, once you proceed with your tender (pay the remainder of a few grand, depending on builder). They are just too big. Losing a few clients who seem to be "on it" won't hurt them, because they probably know that they would need to spend more time (ie. money) with these "demanding" clients, jsut to make them happy about all the requested details,quality, etc... I also heard that some tradies do a monkey job on purpose, and of course in the areas which can't easily be detected ... Re: $15 a day Liquidated Damages with EB - - Is this negotiable? 13Nov 15, 2009 12:40 pm First "liquidated damages" are not "penalty" clauses...a common misconception...penalty clauses are illegal in contracts and would be thrown out in a court of law. Liquidated damages are a genuine pre-estimate of the financial "damage" to you of the house going overtime...however you would only in very rare situations would you get the full financial recompense of rent, interest etc in a domestic building contract...therefore they adopt a "nominal" rate of liquidated damages. In major contracts (what I work in) the computation of liquidated damages is taken seriously and calculated accurately because of the potential for dispute if you try to penalise the contractor. If your over-zealous in your calculation it can get thrown out when appealed by a builder. Standard HIA building contracts have a standard liquidated damage clause and there will be an amount allocated in the schedule. Builders will always low ball them and make you think it is non-negotiable - everything is negotiable - it's a contract. But once signed you can't change them without being in breach. When I built several years ago I'd negotiated liquidated damages of about $400 per week (and it was an "agree or I walk" issue)...they went three weeks over and liquidated damages was rebated at handover from the final payment. Don't fall for the "we'll send you a refund cheque"....and check what is included in the construction period and when the construction period officially starts. Some contracts state a construction period from commencement...I defined it from the point they had access to site....so they don't fart-arse around for a few months before starting. mmm....donuts Homer Simpson 1956- Links: Site Costs Ready Reckoner | H1 Addiction Medical Advice | Château TDL: The Backyard Re: $15 a day Liquidated Damages with EB - - Is this negotiable? 15Nov 15, 2009 5:33 pm Isn't hind sight a great thing! Being a first time builder we didn't know all these things. Yes, there's the argument of getting a solicitor to look over the contracts, but there is also a degree of trust too. Like anything else we may not know about eg taking the car to a mechanic - we trust we are paying for a quality service and them to do what they tell us they will. If they don't stick to their word their name gets tarnished with complaints. On the other hand, like our mechanic, our demo company and our bank manager, I can't recommend them highly enough...and to all friends and family I do. Not that I plan on building again, as this is our dream home, but maybe the process I'd follow would be different if I did it again...or maybe not. Depends how everything turns out in the end. So far so good! Blog:http://tamdaz-themajestic.blogspot.com The Majestic - Henley - Adelaide Thread:https://forum.homeone.com.au/viewtopic.php?f=31&t=20635 Day 200 23-4-10 Re: $15 a day Liquidated Damages with EB - - Is this negotiable? 16Nov 15, 2009 6:06 pm TamDaz Isn't hind sight a great thing! That was the first time I'd built...so I was using foresight...not hindsight...as it was the biggest spend I was going to make for a while I asked for advice, researched, read, and went through my contract in fine detail. My comments above were offered as advice/observation to those about to embark on a journey I've been on. P.S. for those who may be interested this was with one of the spec home builders...JoKing. mmm....donuts Homer Simpson 1956- Links: Site Costs Ready Reckoner | H1 Addiction Medical Advice | Château TDL: The Backyard Re: $15 a day Liquidated Damages with EB - - Is this negotiable? 17Nov 20, 2009 11:36 pm to_do_list ... When I built several years ago I'd negotiated liquidated damages of about $400 per week (and it was an "agree or I walk" issue)...they went three weeks over and liquidated damages was rebated at handover from the final payment. Don't fall for the "we'll send you a refund cheque"....and check what is included in the construction period and when the construction period officially starts. Some contracts state a construction period from commencement...I defined it from the point they had access to site....so they don't fart-arse around for a few months before starting. You are very lucky. There are quite a few people on this site whose builders were happy to let them go, and they wouldn't budge on certain items, most notably on Liquidated Damages ... your builder must have been running low on new jobs? Re: $15 a day Liquidated Damages with EB - - Is this negotiable? 18Nov 21, 2009 11:53 am We are in Victoria and our HIA contract stated $150/week as default amount. Our solicitor advised us to ask for more so we upped it to $250/wk. (Note they also raised their penalty rate from us to $250/wk) Only our first build so I was more concerned about them charging us for holding them up for some reason so I didnt ask for more. Heading towards lock-up stage, and I'm kind of regretting the low amount now, cos it seems they are behind schedule due to their own issues. Perhaps ask for $500/wk and negotiate down to $350/wk? Corner block, lake view, custom design Re: $15 a day Liquidated Damages with EB - - Is this negotiable? 19Nov 24, 2009 9:37 am sena You are very lucky. There are quite a few people on this site whose builders were happy to let them go, and they wouldn't budge on certain items, most notably on Liquidated Damages ... your builder must have been running low on new jobs? Nope not luck...and not low on jobs...builders put enough fat into their construction periods to avoid liquidated damages...my argument was that "Liquidated damages isn't going to be an issue unless you go over...and your not going to go over...or are you?"...sometimes you have to call a bluff. mmm....donuts Homer Simpson 1956- Links: Site Costs Ready Reckoner | H1 Addiction Medical Advice | Château TDL: The Backyard Re: $15 a day Liquidated Damages with EB - - Is this negotiable? 20Nov 24, 2009 9:52 am to_do_list sena You are very lucky. There are quite a few people on this site whose builders were happy to let them go, and they wouldn't budge on certain items, most notably on Liquidated Damages ... your builder must have been running low on new jobs? Nope not luck...and not low on jobs...builders put enough fat into their construction periods to avoid liquidated damages...my argument was that "Liquidated damages isn't going to be an issue unless you go over...and your not going to go over...or are you?"...sometimes you have to call a bluff. And if everyone called their bluff, then they would face a choice of offering reasonable Liquidated Damages or not have new contracts being signed. If everyone received good advice before signing, it would be so much harder for the builders to get away with what they do. I suspect that they prey on those who do not know and are reluctant to pay for legal advice. Certainly, from what I've read, they try to make it as difficult as possible to seek independent advice, including by setting up an appointment with clients to go through the contract with them in order to get them to sign on the spot without having the opportunity to take the contract away for independent advice. Pfiff Finally making progress again, with a clothesline (yippee) and some much needed little things being attended to over the holidays. 40 C on New Year's eve? We love our a/c! It worked for me in getting all non notified rain days removed from the builders claim, although the LDs was only $50/day 7 5952 4 6827 |