Browse Forums Building A New House 1 Jul 13, 2012 5:06 am Hello everyone, this is my first posting though my research regarding building my new home has led me here many times before. Please, I am hoping for your advice in relation to a letter I received in the mail only this afternoon from Kerdels stating that they want to "pass on" a price increase of 10k before they commence construction. Obviously I have real issues with having to cough up an additional 10 grand when I am building my first house and am running things tight on a single income for a family of three. There is no mention specific of carbon tax in my letter though it goes into some jargon stating that most of their suppliers have reviewed their normal prices and mention of new building permit procedures and extra government charges/taxes. (That’s their hint of the carbon tax no doubt) My first question would be can I successfully debate with them the specifics of this cost rise as I take it they wouldn’t be so stupid to pass it on if they knew they may not get away with it? Does the HIA contract protect me from this kind of unfairness or can they just slap on more costs when they need to/want to? If I was to refuse will I be able to get out of the contract at all without having to pay enormous costs up around the $25k mark to cover their loss of profit ect? I will be in contact with the builder tomorrow to try and get some info though no doubt it will be completely one sided. Thanks for taking the time to read this and all information received from fellow forum members is much appreciated. I may well think of something else to ask as my brain is overwhelmed by the money factor at this time! Re: Builder Price Increase - Please help, advice needed! 2Jul 13, 2012 5:37 am I would definelty ask for more details. Since the carbon tax introduction my suppliers have advised; steel roofing products up 4% and concrete up $ 1.50 a cubic metre, but there are probably countles more. Alos use some of your frustration to write a quick email to your local MP about how grossly unfair it is to be paying part of a multi billion dollar pollution tax that will not cool the climate even 1/1000th of a degree. What a collossal green con job. @builderforlife Building inspector and passionate about construction When you need an expert to take a look. Re: Builder Price Increase - Please help, advice needed! 3Jul 13, 2012 5:43 am I haven’t received any increase to my house as yet and its at the submission for approval to council stage. A dollar figure is not enough information really need a break down as where the carbon tax increase comes from as labour is the largest cost in building a home and that is not a carbon taxed item. What percentage is the 10k increase to the price of your build .. ie 3% ? If you feel it is excessive let them know you will be putting it forward to the ACCC, this in itself may make them lower the extra cost. I'm not and expert these are just my opinions Re: Builder Price Increase - Please help, advice needed! 4Jul 13, 2012 9:37 am I'd be very concerned if I were you. I'm assuming you've already signed up with this builder, which is probably why they feel they can pass this (so called) cost on. Building costs generally go up every year as we all know, but in today's environment, the industry is under stress and needs to accept that profits will not be as generous as they have been in recent years. It seems as though this builder is trying to profiteer post-sign up, not a good sign. I'm going through a LOT of builders right now to find my next home, they are VERY competitive if you push them. It's truly a buyers market in every sense, any additional costs (carbon tax etc) should be absorbed by the builders.. PERIOD. They've had a great run for a long, long time! If I were you, I'd pull out. Normally builders will only require 1.5k or so to kick-off proceedings, if this is so in your case... get out. Even if they retreat on this extra cost, I'd be very concerned about this builders intentions moving forward. In the current market, if builders are going to try and squeeze buyers out of money post sign-up, they'll go out of business... simple as that. I have friends in new home sales who say they're really struggling and a little worried. With property growth not expected (minus mining towns) till 2013 at the earliest, YOU call the shots. Re: Builder Price Increase - Please help, advice needed! 5Jul 13, 2012 10:04 am They should have factored in annual price increases when pricing your job and they've known about the carbon tax for a long time so it's entirely their issue if they haven't priced your job correctly. Have a read of your contract and it will tell you in what circumstances they can pass on any price changes. Re: Builder Price Increase - Please help, advice needed! 6Jul 13, 2012 10:06 am In my final contract which was signed a few months ago, there was a clause relating to “Variations to state or commonwealth laws about tax changes that occur during the build process (clause 22.0 on page 26)”. So I asked my builder the following question “Given that all of these are already known for the estimated build time, can these costs be added to the contract value now, or to state any tax laws/changes that are not currently announced or expected to happen during 2012.” And their answer a few months ago was The government has not brought in any new taxes and this contract is only subject to GST (which is included in the contract price). So unless the government creates some new tax applicable to new house construction you won’t be paying any more money. PS. Carbon tax cannot be passed on to consumers so this will not affect you when it is introduced. So basically the carbon tax cannot be passed onto consumers and your builder is talking out their arses and treating you like an idiot, for which they can be heavily fined by the ACCC. I’d be telling them to shove this letter where the sun dont shine, and if they dont then demand an exact breakdown of where the expected costs are to be and then takes this to the ACCC. Building companies prey on people too lazy or pessimistic about disputes and so will just be trying in hope that some suckers will pay it. So dont take this laying down, and just think of all the holidays you could take your family on with that amount of money. What would you rather spend it on...? Re: Builder Price Increase - Please help, advice needed! 7Jul 13, 2012 12:28 pm Jester The government has not brought in any new taxes and this contract is only subject to GST (which is included in the contract price). So unless the government creates some new tax applicable to new house construction you won’t be paying any more money. PS. Carbon tax cannot be passed on to consumers so this will not affect you when it is introduced. So basically the carbon tax cannot be passed onto consumers and your builder is talking out their arses and treating you like an idiot, for which they can be heavily fined by the ACCC. I’d be telling them to shove this letter where the sun dont shine, and if they dont then demand an exact breakdown of where the expected costs are to be and then takes this to the ACCC. Building companies prey on people too lazy or pessimistic about disputes and so will just be trying in hope that some suckers will pay it. So dont take this laying down, and just think of all the holidays you could take your family on with that amount of money. What would you rather spend it on...? I'm not sure about this. I'm pretty sure they can pass it on if their suppliers and whatever else have increased their costs. Hence the 'compensation' from the gov't that's supposed to cover any costs that are passed on. Well Julia, doubt you'll be reimbursing the OP for $10k! My Hamptons build (completed): viewtopic.php?f=31&t=63370 Moved in Wednesday 11th Dec 2013 Front landscaping completed June 2016 Re: Builder Price Increase - Please help, advice needed! 8Jul 13, 2012 2:48 pm Christobel, if you have a signed quote tender from your builder, then they cannot suddenly go back and 'revise' the costs. Speak to the consumer affairs department of your state and they'll be able to give you the right information for example, if you live in Victoria, then check out this link http://www.consumer.vic.gov.au/housing- ... d-disputes Re: Builder Price Increase - Please help, advice needed! 9Jul 13, 2012 3:03 pm Well I have just had my costings sent to me to arrange finance this week and my builder is the same price as quoted in Feb/March this year. They did raise their base house price about $1500 in late March but as long as I have signed my Construction Contract by mid next month no price increase for me Re: Builder Price Increase - Please help, advice needed! 10Jul 13, 2012 3:15 pm My Understanding is that if you signed a tender and contract then material cost have already been agreed to by both yourself and the builder. Any rise in material cost would apply to new constumers. Otherwise whats the point of a signing the tender. The only cost that can change are provisional costs or new construction specific taxes (but its unlikely new taxes would apply to already signed contracts unless the governement says so). The Carbon tax technically can not be passed to consumers by companies but what they end up doing increase the cost of services. So like everyone else has said, dispute the increase in cost, ask them to justify and dont budge on not paying it. GOOD LUCK!! Building Henley Monaco Nouveau Q1 - Mernda Villages https://forum.homeone.com.au/viewtopic.php?f=31&t=57810 http://razbuild.blogspot.com.au/ Re: Builder Price Increase - Please help, advice needed! 11Jul 14, 2012 4:57 am Hello everyone! Thanks for all the responses and advice given so far to the extremely frustrating situation. I spoke with the lady on the phone from Kerdels that sent me the letter yesterday. She was nice enough to listen to me then like a recorded message said her piece which was something on the lines of because I took too long on pre-start that they have the right to review prices. Suspicious to me how they chose to do so at the beginning of the financial year and hold my dream to ransom for an additional 10k! I work away and the broker had been asking for the addenda from the builder to finalise the finance but they wouldn’t provide it till the pre-start was completed. The broker had said that was highly unusual as they normally provide what was agreed on with the PWC. As I have never built a house before I didn’t think anything strange of this matter or that it would cause any issues. Now Kerdels are trying to blame me for taking too long and using that as their excuse to add the increase of cost. If that is the case they would equally be at fault for the initial delay and once my job was ready to go to scheduling could have pushed it through before they knew the prices were going to rise. Does anyone know how long scheduling takes for a new house, would it be any more than a few weeks if required? I have asked for a detailed breakdown of the costing and also information regarding the possible cancellation of the project as I may need to seriously consider that as an option. I will look at contacting my local Consumer Affairs office to investigate and also as suggested to contact the ACCC to see if I can get some light on the matter. I don’t see how I can be made to blame for the inefficiency and lack of transparency in regard to this price rise. It feels completely wrong and as though they are trying to take advantage of my situation. If anyone has any further advice or have faced similar issues please feel free to write your comments. Many thanks to all that have taken the interest to do so! Re: Builder Price Increase - Please help, advice needed! 12Jul 14, 2012 8:45 am How long did your pre-site take?? What was the timeline like for your pre-site process? Building Henley Monaco Nouveau Q1 - Mernda Villages https://forum.homeone.com.au/viewtopic.php?f=31&t=57810 http://razbuild.blogspot.com.au/ Re: Builder Price Increase - Please help, advice needed! 13Jul 14, 2012 10:10 am Tenders do have an expiration date. We pushed ours out to 180 days cos we knew our land wasn't registered, and I wanted to be insulated from any price rises. Re: Builder Price Increase - Please help, advice needed! 14Jul 14, 2012 2:25 pm i suggest you pm one of the h1's and speak to them. type in your builders name in the search box and you will find the thread. Re: Builder Price Increase - Please help, advice needed! 15Jul 15, 2012 3:35 pm You really need to have a good look at your contract and understand exactly where you stand not just listen to the lady on the other end of the phone. If you are still at tender stage it will have an expiration date, if you have signed a fixed price contract it will tell you all the in and outs of when they can pass a price rise on to you. If you're not sure or confident in the contract you need to get some advice from a solicitor, a couple of hundred dollars is nothing compared to $10K. Re: Builder Price Increase - Please help, advice needed! 16Jul 19, 2012 1:14 pm Im building with Kerdels and we are almost finished - my advice is RUN AWAY!!!! Bulding with them is a nightmare, I wouldnt wish them on my worst enemy. Take a look at the thread Ive got about them. They might be cheaper and have nice inclusions, but you will pay for it with the amount of stress they will put you through. Re: Builder Price Increase - Please help, advice needed! 17Nov 06, 2012 5:42 pm Industry rumour is that Kerdels are fully importing kitchens, bathrooms and kitchen benchtops from China, is that the case with you ? Also I would say that ALL builder's have 30 days on quotes, if you go over it that can exercise the right to review prices. If supplier's have advised them about the carbon tax then they are well within their rights to pass it on. Just to makea point about this, an approach that some people have found sucessful in negotiating these rises down, Is to provide some workings to the builder, specifying… 4 81723 Fair Trading can issue orders to rectify and complete but once the matter goes to NCAT these orders are automatically vacated. You will have to terminate contract and sue… 21 29717 How are you doing Ben? Extremely interested in hearing what you are doing or plan to do! 12 15167 |