We are currently building our new home.
Included in the contract price, is a surcharge for the builder to build in the north. The reason the builder has used is the location is out of their normal way. Still we agreed and signed the contract because it was still reasonable from our perspective and we like the layout of the house.
The builder started building right after Melbourne Cup day and when they have reached the frame stage and after we have paid up to frame stage. The builder sent us a variation tax invoice for extra concrete used in the concrete slab. It was for about a thousand (this includes 20% builders' margin). We are not sure if this is the case as we have heard that there are cases whereby some builders on purpose, may have under-quoted the items in the contract and named them "provisional sum" and subsequently after the owner is locked in, gives them the license to increase the price. Nevertheless we paid this variation and issued a warning letter as the builder did not even state how many metres they would cover for the concrete slab in the original contract so how is the builder able to calculate the excess amount required. Which mean they can just quote any amount after the fact and charge us for it. It was already unfair but we thought we wanted to maintain good will and paid it anyway.
Just last Wed, we received another variation tax invoice for another two thousand bucks from the builder for the same concrete slab, and stating the fact they have miscalculated the first variation. The gap in actual cost and the provisional sum mentioned in the contract is (this is without adding the 20% builders margin) an increase of 20% over the original sum in the contract. We are furious and have written them a letter to disagree with the variation.
1.Does anyone else have this experience?
2. How can we stop builders piling on variation upon variation asking for a thousand or more for each variation on the account it is a provisional sum. This is really unfair to the owner.
3. How does the owner resolves such issues of carelessness of the builder and we could have gone with another builder who could have carefully calculated and quoted accurately in the contract price in the first place?
4. Isnt this a fixed price contract and the builder knows how much concrete to order in the first place? It is not like they find out later they are missing one part of the concrete and ordering more concrete to lay as second stage?
5. The builder did not even notify and ask us for the approval to go ahead, the builder just lay the concrete slab and billed us later. Where can I publicise the builder's "bad practices" to potential owners?
many thanks for your help,
CB