Browse Forums Building A New House 1 Sep 23, 2015 10:47 am We're at contract stage and are considering whether it's worth paying for a 'professional' contract review to make sure we are covered contractually. Our builder is using a standard HIA contract as a basis, however, I was wondering what clauses we should look out for and any considerations in general re: the contract? An item I would like to negotiate is: agreed damages for completion of building works (clause 40): $250 I'd like this beefed up to cover the rent we're paying while the place is being built. There is a clause around 'inclement' weather and a provision of 5 days. This seems reasonable. There is a 20% charge 'if contract is ended' by the customer to cover profit and costs of the builder for work performed to date. I assume this is reasonable? We have no intention of cancelling however. Any other tips? Re: HIA Contract for new home 2Sep 23, 2015 10:49 am Just note that if YOU delay the completion of the building works for some reason (rather than the builder) then you have to pay that amount, so be careful about beefing it up too much! My blog: tashandpaul.wordpress.com Re: HIA Contract for new home 3Sep 23, 2015 3:52 pm TashPaul Just note that if YOU delay the completion of the building works for some reason (rather than the builder) then you have to pay that amount, so be careful about beefing it up too much! Great point, thanks! Apart from payment, I'm hoping all actions should be on the builder once we demolish and they start building so hopefully we shouldn't delay anything. Re: HIA Contract for new home 5Sep 24, 2015 7:24 am Based on my experience you can't negotiate much on the building contract. I had a bit of experience dealing with contracts and after thorough review I have sent my comments to the builder for proposed changes / amendments. Out of the 3 pages of commens around clauses etc. only 2 of them were approved which btw only relates to typo errors. They said some builders might be different so you can still try get some clauses change and see how it goes. Build thread: viewtopic.php?f=31&t=79163 Re: HIA Contract for new home 6Sep 24, 2015 10:43 am Hi Manic, Most builders will "push back" on any changes you request. What most clients are lead to believe by their builder is that it is a standard contract (which to some degree it is) and changes are not allowed. The fact is that all these clauses are up for negotiation prior to signing. It is in the best interest of the builder to ensure costs such as clause 40 are kept to a minimum and clauses such as clause 31 are bumped to a maximum. The standard amount maybe be $250/week in item 9 (schedule 1) but, most clients are unaware this can be negotiated up or down depending on their needs. Another common point we raise regularly is the method of payment (Schedule 3). Most builders will just enter method 2 as the progress payment method. This means that the builder has the right to issue progress payments based on "amount of work performed" rather than the required stage being reached. By signing to this method, section 40 of the Domestic building Contracts act 1995 does not apply and the build may enter percentages as they see fit. As Jai.m has indicated, progress payments are usually set at 7 days. it usually takes banks 5 business days to release funds so therefore you would be liable for late penalties which are usually set at 15%pa. There is an array of points and clauses that should be looked at before signing and the fact you have even asked the question shows you are on the right path. Further to the contract, we always recommend that your tender is thoroughly checked also. We find this is an area where most builder's lack detail and once signed ends in disputes which in most cases, the builder will win. Things like incorrect part numbers, wrong colours and plan errors are more common than most people think. Regards, CR Partners contractreviewpartners.com.au Re: HIA Contract for new home 7Sep 25, 2015 6:59 pm I think it largely depends on who you build with too. We have a 7 calender day timeframe for progress payments where the penalty is 18% if not paid on time. when we hit fully enclosed stage our bank required an inspection and valuation of the work before they'd pay... I was submitting claims via my broker who it turns out only works part time!!! So she sat on my claim for 48hrs before submitting it... The bank looked at it on day 3 but didn't order valuation till day 4 add the weekend into this and I got a call from builder on day 7 saying where's payment... They mentioned the 18% clause and I put a bomb under my brokers arse to sort it.. Also called the bank myself who got it done the next day. I'm extremely lucky that my builder is excellent and didn't take action.. Though I'd say any more than a few days and it might have been a different story. So if you can get that increased to 14 days I'd say do it and also find out the most direct method of submitting claims if youre using a broker, cos they're not necessarily the best option. Re: HIA Contract for new home 8Apr 28, 2018 2:27 am Manic We're at contract stage and are considering whether it's worth paying for a 'professional' contract review to make sure we are covered contractually. Our builder is using a standard HIA contract as a basis, however, I was wondering what clauses we should look out for and any considerations in general re: the contract? An item I would like to negotiate is: agreed damages for completion of building works (clause 40): $250 I'd like this beefed up to cover the rent we're paying while the place is being built. There is a clause around 'inclement' weather and a provision of 5 days. This seems reasonable. There is a 20% charge 'if contract is ended' by the customer to cover profit and costs of the builder for work performed to date. I assume this is reasonable? We have no intention of cancelling however. Any other tips? even thought it may not be specified in the contract, my understanding is that you are eligible for general damages which may include rent and interest if you have a case and the amounts can be proven. Re: HIA Contract for new home 9Apr 28, 2018 2:28 am CR Partners Hi Manic, Most builders will "push back" on any changes you request. What most clients are lead to believe by their builder is that it is a standard contract (which to some degree it is) and changes are not allowed. The fact is that all these clauses are up for negotiation prior to signing. It is in the best interest of the builder to ensure costs such as clause 40 are kept to a minimum and clauses such as clause 31 are bumped to a maximum. The standard amount maybe be $250/week in item 9 (schedule 1) but, most clients are unaware this can be negotiated up or down depending on their needs. Another common point we raise regularly is the method of payment (Schedule 3). Most builders will just enter method 2 as the progress payment method. This means that the builder has the right to issue progress payments based on "amount of work performed" rather than the required stage being reached. By signing to this method, section 40 of the Domestic building Contracts act 1995 does not apply and the build may enter percentages as they see fit. As Jai.m has indicated, progress payments are usually set at 7 days. it usually takes banks 5 business days to release funds so therefore you would be liable for late penalties which are usually set at 15%pa. There is an array of points and clauses that should be looked at before signing and the fact you have even asked the question shows you are on the right path. Further to the contract, we always recommend that your tender is thoroughly checked also. We find this is an area where most builder's lack detail and once signed ends in disputes which in most cases, the builder will win. Things like incorrect part numbers, wrong colours and plan errors are more common than most people think. Regards, CR Partners contractreviewpartners.com.au in regards to method 2, or method B, if the work progress is defined by stages, the builder still cannot request monies until the stage is completed. See DBCA, s.40 (3): "In the case of a major domestic building contract that is not listed in the Table, a builder must not demand or receive any amount or instalment that is not directly related to the progress of the building work being carried out under the contract." Re: HIA Contract for new home 10Apr 28, 2018 1:57 pm Manic We're at contract stage and are considering whether it's worth paying for a 'professional' contract review to make sure we are covered contractually. Our builder is using a standard HIA contract as a basis, however, I was wondering what clauses we should look out for and any considerations in general re: the contract? An item I would like to negotiate is: agreed damages for completion of building works (clause 40): $250 I'd like this beefed up to cover the rent we're paying while the place is being built. There is a clause around 'inclement' weather and a provision of 5 days. This seems reasonable. There is a 20% charge 'if contract is ended' by the customer to cover profit and costs of the builder for work performed to date. I assume this is reasonable? We have no intention of cancelling however. Any other tips? you may still be able to make a claim for non liquidated damages (eg general damages, entailing rent, loan interest), even if liquidated damages is specified as nil. Take a look at: http://www.corrs.com.au/assets/thinking ... Jan_10.pdf Re: HIA Contract for new home 11Jul 20, 2018 11:51 pm jai.m Hello Jay. Can you explain more about it please... we are build custom home design 31 sq. My builder put 210 when we sign our contract. Now he add 14 + 14 + 14 = 42 days more... is these right thing they done after we sign our contract. So all together 255 days for single storey home to build. Re: HIA Contract for new home 12Jul 22, 2018 4:25 am Manic We're at contract stage and are considering whether it's worth paying for a 'professional' contract review to make sure we are covered contractually. Our builder is using a standard HIA contract as a basis, however, I was wondering what clauses we should look out for and any considerations in general re: the contract? An item I would like to negotiate is: agreed damages for completion of building works (clause 40): $250 I'd like this beefed up to cover the rent we're paying while the place is being built. There is a clause around 'inclement' weather and a provision of 5 days. This seems reasonable. There is a 20% charge 'if contract is ended' by the customer to cover profit and costs of the builder for work performed to date. I assume this is reasonable? We have no intention of cancelling however. Any other tips? We just went through the exact same decision that you are contemplating. For peace of mind we got a solicitor to review the contract. It's funny how the all say its just a standard HIA contract but all the builders seem to have different stuff in it. Anyway we paid and submitted our concerns to Rawson that the solicitor highlighted. There was only two from memory but in the end Rawson just said, "we won't be changing anything in the contract." So its go with it or don't. I'm not sure if the $250 you are talking about is for works not completed after the build date has expired but if it is $250 is very good, ours is not even $100 I don't think. You talk about deletions, are they variations or PS and PC adjustments? pleas list them 1 16568 10 12321 Unless there is something in special conditions the builder does not have to give you timeline. If your demolition contractor has not removed Asbestos and it was found… 12 28811 |