Browse Forums Building A New House 1 Mar 18, 2013 12:21 pm Our builder has promised us a tight building time frame, this is something that helped make our decision to build with this company. So we would like to make changes to the contract to make sure this promise is met. Is it fair to assume that the LD's are meant to cover your 'out of pocket' expenses should the building process run past the agreed building time? Should this figure therefore reflect the cost of interest on the construction loan (I am assuming at 90% of the construction loan, given that is what we will have paid up until hand over), plus the interest on the full land loan, plus the cost of rental in a comparable house in a comparable area? -How many people successfully argue for this figure to be changed to reflect a true amount of what it will cost if building runs over time? -Is this something that is worth pushing to be changed? -Is there anything else that should be included in the calculation of the LDs? In the past I have never really worried too much about LD as we have never been too concerned with the finished date, however this time we will find ourselves homeless if building runs overtime. Re: Contract Negotiation - Liquidation Damages 2Mar 18, 2013 4:25 pm The Contract clause is meant to reflect the additional costs that you incur if the house is not ready in time and can include both rent and interest. The standard last time I built (2006) was $250 which is low. I have however noticed recently that a lot of builders offering short build times put a figure in the contract of $1/week which is a joke. You can negociate for a higher amount but the builder will probably want to increase the overall price to cover the risk of having to pay damages. The Harder You Try - the Luckier You Get ! Web site http://www.anewhouse.com.au Informative, Amusing, and Opinionated Blog - Over 600 posts on all aspects of building a new house. Re: Contract Negotiation - Liquidation Damages 3Mar 18, 2013 7:21 pm Hi Agape Bashworth has given you a good answer however there is an alternative. If you leave the clause blank then you can still claim damages for breach of contract (the true cost) (under common law) however the disadvantage is that the onus of proof is on you and you will have to go VCAT to get it instead of automatic deduction from the final payment due to the builder. Think carefully. 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: Contract Negotiation - Liquidation Damages 4Mar 18, 2013 8:44 pm Thank you so much for your responses, it has given me something to think about ... the build time is something that definitely impacted on the choice of this builder - therefore I would like some way of making sure it is adhere to ... however I am not prepared to allow them to charge us more than what we have agreed with and signed off on at tender (considering the price is already $117K more than originally quoted). I think I will have to ask my sister (a lawyer) about the VCAT procedure, I will also have to speak to my builder about their standard terms for LDs. I would much prefer for everything to to run smoothly and not to have to worry about this - but at the same time would like to protect ourselves. Wasn't Elderton Homes gone late 2022, and since Millbrook was just a high end spin off, this is hardly a surprise. 1 3463 Good riddance if you ask me. They stole so much money from me and my husband for doing initial design plans. Thank god we found another local builder around Pagewood and… 6 10204 Hi, For those whose builder has gone into liquidation. I am trying to find out how the house is insured in the meantime (for the period before you employ a new… 0 2802 |