Browse Forums Building A New House 1 Feb 12, 2012 12:12 pm Hi all, Long time reader first time poster First of all would like to thank all of you contributors for making this site an amazing source of information for people like me. I am currently in a PPA with a builder whom I have paid a deposit of $1000. I am unhappy now with the deal I am being offered as there is a much better option out there (Scott Park Freo Deluxe). Does anyone have any experience with cancelling a PPA and what are the costs associated? I don't think the builder has done any site visits as the block currently doesn't even exist (still in development). I am not worried about losing the deposit because essentially I am receieving more than a grands worth of better value with Scotty. Could anyone please advise on the best way to get out of this agreement? My understanding is that it is not contractual and I have no obligation to sign a building contract with them. I do feel quite guilty about having to do this but essentially when we're talking about an investment worth closer to the half a mil bracket then I have to swallow the guilt and think about the long run. Any help is much appreciated, thanks! Oct 10 - Council Approval Oct 23 - Site scrape Oct 29 - Footings and Prelay OCT 30 - Slabbed Nov 6 - Bricks Delivered Nov 13 - Brickwork started Re: Opting out of Preliminary Plans Agreement 2Feb 12, 2012 2:47 pm i think yr right with regard to just losing yr deposit, as when we signed the PCQ with our builder, the rep explained that if we didnt go thru with it, then we would forfeit the deposit. which also wouldnt bother us, as if we were pulling out that is a small price to pay. Re: Opting out of Preliminary Plans Agreement 3Feb 12, 2012 11:30 pm hmm thanks for the info. what reason so you think I should give and do u think I will have to pay more Oct 10 - Council Approval Oct 23 - Site scrape Oct 29 - Footings and Prelay OCT 30 - Slabbed Nov 6 - Bricks Delivered Nov 13 - Brickwork started Re: Opting out of Preliminary Plans Agreement 4Feb 12, 2012 11:43 pm You don't have to give any reasons if you dont wish to. They've fulfilled theyre side of the prelim agreement - you've fulfilled yours - ie paid your deposit. There is no obligation to sign subsequent contracts that arise unless you are happy to. You would be hard pressed getting the deposit back - it isnt worth the fight and you probably have no argument to make if they have fulfilled their obligations coming up with sketch plans or whatever is on your agreement. We went through a much more complicated contractual issue a few years ago - that was after the building contract was signed - it was possible to extract ourselves from that but not without some heart ache, stress, lawyers fees and time. One final thing - be certain of what you are leaping into before you terminate your undertakings with the first builder Re: Opting out of Preliminary Plans Agreement 5Feb 13, 2012 12:31 am hi fireflies thank you for your info you have made ne feel a lot better and confident about this. will go ahead with it tomorrow and report back Oct 10 - Council Approval Oct 23 - Site scrape Oct 29 - Footings and Prelay OCT 30 - Slabbed Nov 6 - Bricks Delivered Nov 13 - Brickwork started Re: Opting out of Preliminary Plans Agreement 6Feb 13, 2012 12:37 pm Depending on the terms of the PPA and the amount of work completed by the builder, they may require you to cover costs incurred in excess of of the deposit. However, several builders I have spoken to have advised that it is only the deposit you will lose. I recently opted out of a PPA and lost only the deposit (however we had paid close to $10,000 ) When I asked for a breakdown in the costs incurred, the builder came up with $11,000 worth of costs (this included survey fees, site classification report, shire fees, drafting fees, admin fees, etc). It doesn't sound there would have been many costs incurred considering you block is still in development, so hopefully you will only lose the $1,000. Our custom Gemmill Home in Bedfordale WA Build thread:https://forum.homeone.com.au/viewtopic.php?f=31&t=53788 Timeline on page 1 Re: Opting out of Preliminary Plans Agreement 7Feb 13, 2012 12:57 pm Don't feel guilty - you are spending a lot of money and you've got to be happy!! Go for it ... For info on our build: viewtopic.php?f=31&t=43093 Built the McLaren by Dechellis - slab down 22 Feb - handover 30 Aug 2011 - and gardens finished 9 Dec 2012!! Re: Opting out of Preliminary Plans Agreement 8Feb 13, 2012 2:35 pm hi guys called them this morning looks like I am only losing deposit sales rep stated that if in any case they want more from me he will fight our case and try and prevent any further fees seeing as they have not even had to do any work on it. Oct 10 - Council Approval Oct 23 - Site scrape Oct 29 - Footings and Prelay OCT 30 - Slabbed Nov 6 - Bricks Delivered Nov 13 - Brickwork started Re: Opting out of Preliminary Plans Agreement 9Feb 13, 2012 3:01 pm If the builder has put in work on your house they should be compensated. i.e. if they purchased a survey, did a site inspection report or did some design work. If they did not they shouldn't hold a grudge and just return the money. Part way amicably There is an old saying in the building industry, do something good your client will likely tell one person, do something bad and they will tell everyone. This forum is living proof of that. As for the contractual situation, A PPA is NOT a contract, simply an agreement to prepare contractual documents (which take time and money to prepare). As you have not signed a contract you are not obligated to proceed, you are and should however be liable for any costs the builder has incurred so far. If its only $1000 you should count yourself lucky. Re: Opting out of Preliminary Plans Agreement 10Jan 21, 2016 3:45 pm Hi All Sorry to bring up an old thread but i am having a similar issue. 1. signed preparation of contract and paid $2000 deposit. 2. do not want to go ahead with build 3. builder is seeking $1800 for additional costs above the deposit. Are we liable? Can they make us pay this? any advice apprecaited In NSW the maximum deposit for building work is 5% until the builder provides HBCF insurance 1 4821 Hi All, We signed a prelim agreement last year (May 2022) and paid deposit to a builder. However, we didn't go ahead with them and never signed a contract. We ended going… 0 2309 You need to respond to the Builder within 10 business day advising of your rejection of claim as per SoPA on a payment Schedule, Do not miss this deadline. 3 7285 |