Browse Forums Building A New House 1 Jun 25, 2014 11:49 am Hi all, Just a quick question. I'm in WA and I'm wondering whether or not the builder is required to provide me with a copy of invoices to prove that the amount I am being charged for provisional works did come to the total they claim? My build: viewtopic.php?t=62001 My Thread: viewtopic.php?f=31&t=62001 Re: Provisional costs 2Jun 25, 2014 12:07 pm jaceb Hi all, Just a quick question. I'm in WA and I'm wondering whether or not the builder is required to provide me with a copy of invoices to prove that the amount I am being charged for provisional works did come to the total they claim? My build: viewtopic.php?t=62001 Provisional sum is YOUR Money, of course builder has to account for it! Re: Provisional costs 3Jun 25, 2014 12:09 pm This is the reply I received: We have provided you with an itemised statement of your provisional sum items in accordance with the requirement of the building contract and consistent with standard industry practice. As we have satisfied our obligations under the contract we will not be providing copies of receipts as requested. My build: viewtopic.php?t=62001 My Thread: viewtopic.php?f=31&t=62001 Re: Provisional costs 4Jun 25, 2014 12:18 pm So by the nature of their response you could have been charges for things that did not occur. I understand why theyd do it taht way especially if any of the information is commercial in confidence, but how do you know you had rock removal etc. Ask for the inboices of the work completed rather than the receipts. Creator of superduperonium, expert at expert things, nobel laureate, can hold my breath for 10 minutes. Re: Provisional costs 5Jun 25, 2014 1:34 pm They cant provide you with receipts - as they dont include their margins on top of them. So the itemised list is cost price to you, their invoices would be what they are paying the supplier. You technically dont have a right to know how much they mark products up Re: Provisional costs 6Jun 25, 2014 2:19 pm Quote: You technically dont have a right to know how much they mark products up Actually - I think you do. If the item is a variation then they have a margin noted in the contract (usually 20% for this sort of thing). So there should be no issue with them justifying the actual price of the extra works and then adding the contractually agreed margin on top. Where this becomes more "grey" is when the extra works include some form of extra onsite labour which is difficult to separate out from the rest of the normal works. But for a subcontractor providing specifically invoiced works (eg, provide and install a water tank) then it should be very clear-cut. If the item is a provisional sum then the margins should already have been allowed for in the contract price or a margin stipulated in the contract. Either way, the provisional sum should be for the exact value of the works with margin either added or already allowed for. It might seem like you are picking a fight with Goliath by asking for justification of the amount they are charging, but if they can't justify it, then they shouldn't be charging it. It is quite possible that they simply don't have their paperwork in order and it is difficult for them to scan/copy the original receipts. But keep asking for it. You would hope that they are not providing you with inflated prices on the off-chance they can get away with it when you don't ask for evidence! Seksui KDR in Sydney (2015-2016) Links --> | H1 thread | Final plans | Timing of works updated 9/3/16 | Re: Provisional costs 7Jun 25, 2014 3:23 pm To late now but a clause in the contract allowing auditability of provisional versus final sums would fix this. Not sure builders would agree as it would provide a level of transparency that they are more than likely not willing to give Re: Provisional costs 8Jun 25, 2014 4:23 pm clintdb Quote: You technically dont have a right to know how much they mark products up Actually - I think you do. You'd like to. But no builder is ever going to give you that. In fact, no business of any variation would give any client that information. Re: Provisional costs 9Jun 25, 2014 4:24 pm Doesn't the Domestic Building Contracts Act apply in WA? In Victoria it is quite clear that a builder must provide receipts for provisional sums. See below: DOMESTIC BUILDING CONTRACTS ACT 1995 - SECT 23 Builder must supply evidence of cost of prime cost items and provisional sums A builder must give the building owner a copy of any invoice, receipt or other document that shows the cost to the builder of any prime cost item, or that relates to any provisional sum, in a domestic building contract and must do so as soon as practicable after receiving the invoice, receipt or document. Penalty: 20 penalty units. From what I've been able to find out on the web WA has the Home Building Contracts Act which only says the following about provisional sums: HOME BUILDING CONTRACTS ACT 1991 - SECT 12 12 . Understatement of prime cost items etc. by builder, offence (1) A builder must not enter into a contract that contains an amount or an estimated amount for a prime cost item or a provisional sum if the amount or estimated amount is misstated by being less than the least amount that it could reasonably cost to supply the item or perform the work to which the amount relates. Penalty: $10 000. (2) In determining whether an amount is misstated for the purposes of subsection (1) regard is to be had to the matters or contingencies that were known (which may be set out on the contract), or ought reasonably to have been known, to the builder at the date of the contract. Re: Provisional costs 10Jun 25, 2014 5:48 pm Agreed Liliana. We got ours without asking and showing their mark ups. I'm in Vic. Re: Provisional costs 11Jun 25, 2014 10:29 pm Under the standard HIA contract the Builder is NOT allowed any mark up for provisional sums that are less than the stated amount in the contract. They are however allowed a mark up on the excess cost only if the cost to the builder exceeds the contract amount. For a worked example see http://www.anewhouse.com.au/2012/08/con ... onal-sums/ 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: Provisional costs 12Jun 26, 2014 12:40 am LaceyM clintdb Quote: You technically dont have a right to know how much they mark products up Actually - I think you do. You'd like to. But no builder is ever going to give you that. In fact, no business of any variation would give any client that information. If you signed an HIA contract their markup is listed in one of the schedules. I guess that means that pretty much every builder gives you that when you sign your contract. Re: Provisional costs 13Jun 26, 2014 8:43 am Liliana is right, she quoted the law as it stands to protect homeowner. Provisional sums are contingent allowances in the contract (and should be deducted from contract sum to arrive at adjusted contract sum for the purposes of progress claims). PS is not builder's money to claim unless the expenditure is justified and accounted for as required by law. I have had one client who overpaid builder by more than 100K because builder claimed PS in progress claims for the work not done. Contract has now ended for other reasons and they are massively exposed to financial loss. 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: Provisional costs 14Jun 26, 2014 8:50 am Hi Building-expert, Unfortunately the OP is in WA and I couldn't find anything in their Building Act that said the builder had to provide receipts - just that they couldn't under-state the sums. Maybe the OP could ring the WA Building Commission and find out where they stand. I don't see how you can tell if the sums have been understated if you can't see the receipts! Re: Provisional costs 15Jun 26, 2014 9:09 am Liliana Hi Building-expert, Unfortunately the OP is in WA and I couldn't find anything in their Building Act that said the builder had to provide receipts - just that they couldn't under-state the sums. Maybe the OP could ring the WA Building Commission and find out where they stand. I don't see how you can tell if the sums have been understated if you can't see the receipts! I am aware that OP is in WA and that WA Act may not be as specific as DBCA1995 but nevertheless PS have been around a long time and there are common law decisions that will reflect DBCA1995. In the end you cannot claim someone else's money unless you are justified to do so and unless you can account for it. There is a very interesting VCAT case regarding 45K PS rock excavation claim which went to VCAT that got the right outcome for the owner but for the wrong reasons given by VCAT, builder appealed to Supreme Court and now it will be re heard. 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: Provisional costs 17Jul 03, 2015 7:59 am WA Earthmoving Can I ask if this is in relation to the siteworks? Thats usually where priovisional costs are associated with. The rest is able to be calculated well in advance Creator of superduperonium, expert at expert things, nobel laureate, can hold my breath for 10 minutes. Re: Provisional costs 18Jul 03, 2015 10:24 am Ponzu WA Earthmoving Can I ask if this is in relation to the siteworks? Thats usually where priovisional costs are associated with. The rest is able to be calculated well in advance I know that's where Provisional costs usually are. I am asking if that is where it is in this case. Re: Provisional costs 19Jul 03, 2015 10:33 am WA Earthmoving Can I ask if this is in relation to the siteworks? The case I quoted for was site works (excavation in rock) 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: Provisional costs 20Jul 03, 2015 10:47 am building-expert WA Earthmoving Can I ask if this is in relation to the siteworks? The case I quoted for was site works (excavation in rock) I was wondering if that is where jaceb was having problems with the builder. I have seen a lot of smaller builders cash in on this. I have actually seen one builder in Perth issue a false invoice. I am not sure whether Perth has its own way of doing things in regards to this. 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