Browse Forums Building A New House 1 Oct 16, 2012 10:22 am Hi, After a long time construction has started on our site last month. We had so many issues with the builder that the pleasure of building a new home is almost gone and our trust in humanity is also at a very low point. Would appreciate if someone could give me advice on the following please: Can the builder charge you a building variation of $10000 if the 90 day start of construction period expires due to the builders fault. Council has given us written documentation as to the reasons for delay and it is clearly mentioned that plans submitted were incorrect and the builder was asked to submit new plans for the house and Hydraulics. The second issue is for variation payments upfront before the work is completed. Stormwater detention costs, plus the above amount and extras fro electricals have added upto $55000 as variation costs, builder wants this to be paid with the first payment (slab). Bank is not willing to pay this amount as it is not part of the fixed tender price. As it is a huge amount we don't know how we are going to solve this problem. What i don't understand is how can the builder ask for variation payments when the work has not even started. Help will be much appreciated. Re: Variation payments 2Oct 16, 2012 11:09 am Ouch, sounds really bad for you... I think it would be best if you go and talk to a solicitor - see if there is any sort of mediation/negotiation they can do with the builder on your behalf Do you have one that you have used at all in this process? After 2 false starts, a year living overseas, two more world trips and 3 years of uncertainty we are now starting the build process again - hopefully for real this time! Re: Variation payments 3Oct 16, 2012 2:11 pm I would speak to your solicitor or maybe the legal people at the HIA. I work for a small builder and i know that we do not charge for variations until the variations have been completed. Once they have been completed they are charged with the next progress payment. Modified Fernside 38 Rawson Homes Blog: http://www.thehousethatmatandjenbuilt.blogspot.com Build Thread: https://forum.homeone.com.au/viewtopic.php?f=31&t=60501 Re: Variation payments 4Oct 16, 2012 2:24 pm Regarding the 90 days, if it went over only due to their stuff up then you could fight it. If they can prove regardless you would have missed the mark then you might have to pay as most builders do charge you for any price rises that may have occurred during the "Tender" period. Regarding the other then surely stormwater should have been in the initial costings, your electrical selection or upgrades you have made (if above the builders allowance) would have to be paid by you throughout construction. I would seek legal advice Re: Variation payments 5Oct 16, 2012 3:20 pm I would definitely seek legal advice on this or call the authorities such as HIA, MBA, or Fair Trading. It's a big money. Don't let it go off your hands easily without a fight and after you are completely convinced. All the best ************************************************************ The best is yet to come...... ************************************************************ Re: Variation payments 6Oct 16, 2012 4:04 pm Hi dollysydney Builder cannot charge you if he is at fault for the delays, that would be an affront to justice. Charging for variations up front, yes he can if you have signed a contract that says he can. What does your contract say? Foremost Building Expert in Australia,assisting with building problems/disputes, building stage inspections,pre-contract review advice for peace of mind 200 blogs http://www.buildingexpert.net.au/blog Re: Variation payments 7Oct 16, 2012 4:34 pm Hi Building-expert, The builder has based his claim for variation payment on clause 10 of HIA building agreement. This clause (last part of paragraph 10.1) states that - Any adjustments to the contract price due to an agreed alteration will be paid at the next progress payment or as agreed by the parties in writing. The $10000 that builder charged as building variation due to expiry of the 90 day period, we had to sign as the builder was refusing to start the construction. But as i have mentioned before we have documents from the council to prove that the delays were caused due to incorrect plans being submitted and council had to ask for these plans to be redone and resubmitted. Would appreciate your advice, is their anything in this clause which will benefit us and allow us to make the payments as the variations are completed? Thanks Re: Variation payments 8Oct 17, 2012 10:41 pm Without looking at all of your documentation it is hard to give meaningful advice other than you must be very careful what you sign. If you sign off on a bad deal willingly, the law will not protect you unless you have been misled. Foremost Building Expert in Australia,assisting with building problems/disputes, building stage inspections,pre-contract review advice for peace of mind 200 blogs http://www.buildingexpert.net.au/blog Re: Variation payments 9Oct 21, 2012 9:03 pm You are right Building-expert, i hope people who read these posts learn from our mistakes. I suggest to others to send an email to the builder with all the questions and ask for written answers to your questions before you sign the contract. We had a meeting before signing the contract but it was all discussion no written evidence, i took notes during the meeting but it doesn't have any standing. I would also advice people to make sure the builder includes the cost of stormwater detention systems and electricals in the contract so that it is part of the loan otherwise coming up with $60,000 dollars as variation amount is extremely difficult and the bank will not approve the increase after the final approval is given for the fixed price tender. This is what happened in our case. My other advice would be to follow up with the builder every weak do not wait for them to get back to you, because in our case we sent emails and waited for their reply which never came and then the builder used this against us. Basically make sure your contract has no loopholes and you read each and every point carefully and do not sign if the clauses are not clear or can be interpreted in different ways. Re: Variation payments 10Oct 22, 2012 9:05 am Hi dollysydney One of the reasons why I put my time into writing the posts and the blogs on my web site is because I want to raise awareness that your kind of problem is just happening too much and that there is something you can do about it. The first problem is that building a home is outside most people's comfort zone because the don't know about contracts and building. Then they sign off on the contract in blind trust and naive hope(believing everything they are told) and thinking less than buying shoes. I am not saying this in a derogatory sense just as a matter of fact because I have seen it so many times. Fortunately many if not most builders are in fact good operators and the build is fine( out of thousands of builds we see only a small proportion of serious defects), the clients are lucky but it's a Russian Roulette. The ones I see are usually serious problem jobs and it's not pretty and often devastating to owners dreams and budgets. Many of my clients just did not know that you can get your own independent inspector for pre contract and stage inspections. It's never too late and get someone on board to look after you, you never know, lot more can be salvaged than you think. Foremost Building Expert in Australia,assisting with building problems/disputes, building stage inspections,pre-contract review advice for peace of mind 200 blogs http://www.buildingexpert.net.au/blog Re: Variation payments 11Oct 22, 2012 11:09 am I really feel for you DollySydney. It is a very dispiriting experience to find out how deceitful some people in the building industry can be. I totally agree with BuildingExpert as well that most of the problems arise from the customer's lack of knowledge of contracts and construction and some builders will take advantage of that. The only good thing about having an unscrupulous builder is that it will teach you what to watch out for and you can tell other people. This forum is so important for that and with the help of people's stories on here and experiences maybe people will gradually be able to avoid the sharks. 5 6822 I work with owner, he/she is my man on the ground and I instruct them when to visit the site and take photos and I have other tools in the bag. 4 15284 Looking for advice on whether this variation in tile colour is acceptable. The large tile on the left was used in my main bathroom renovation 1 year ago. My ensuite… 0 8492 |