Browse Forums Building A New House 1 Mar 30, 2016 6:16 pm Hi just after some advice. We entered into a building contract and we have had our finance declined. Our builder is saying that we can cancel the contract providing we pay $7500 in costs to them. We have already paid a $5500 deposit. They are saying we owe the money for engineers report, contour survey, planning fee and working drawing fees. We have not yet received our final costings and drawings but we have signed the HIA lump sum contract. I'm really just after anyone else's experiences in getting out of a building contract and if we can get out of paying some of these costs. Considering we have already paid a $5500k deposit which I am not asking to have back. Or does anyone know of a good lawyer who can give us advice. Located in WA Thank you Re: Cancelling a building contract 2Mar 30, 2016 8:01 pm Have you tried a mortgage broker through the builder? If they offered one. Have you talked to the builder about your situation? I'm surprised they went that far without finance approval Re: Cancelling a building contract 3Mar 30, 2016 8:04 pm Have you been offered the cooling off period? The builder is right requesting the money, however is the amount stipulated within the contract? Re: Cancelling a building contract 4Mar 30, 2016 8:17 pm Thank you for your replies. Kyliebsmith we have our own mortgage broker who gave us pre approval for this last year. However our financial situation has changed and we are now unable to borrow that amount. I have spoken to the builder and to be honest they are being very understanding. I guess it's that I don't understand why we paid $5500 deposit and then now have to pay the $7500 when it has literally just been shire fees and fees for doing the drawings etc. I wasn't aware that we had incurred any other expenses other than the initial $5500 as they have not requested any other payments and were fully aware that we didn't have formal finance approval yet. woodbang there is no cooling off period. The builder has said that according to the contract they can ask for 6.5% of the total cost which is about $18k so I'm not arguing with them at all about the $7500 because I know what I would rather pay... But as we really can't afford $7500 I am hopeful that there is something, anything at all that we can do to lower the cost. Thank you Re: Cancelling a building contract 5Mar 30, 2016 9:00 pm HI we opted out of our contract with a builder and we forfeited our deposit and were not asked for any more. Have they already drawn up your plans and submitted them for planning approval? If they haven't how can they ask for that money, we were told by council (joondalup) if the building permit had not been approved we could get our monies back. I would be asking what the deposit was used for?? Re: Cancelling a building contract 6Mar 30, 2016 9:31 pm Petad HI we opted out of our contract with a builder and we forfeited our deposit and were not asked for any more. Have they already drawn up your plans and submitted them for planning approval? If they haven't how can they ask for that money, we were told by council (joondalup) if the building permit had not been approved we could get our monies back. I would be asking what the deposit was used for?? My very next question to them will be what was the deposit used for. A building permit has not been issued however we did require planning approval (seperate to building approval) and that has just been approved. So I understand that fee. But all the contour surveys engineers reports etc I believe was what the $5500 was to pay for. I actually also thought the shire fees were included in that deposit. I appreciate your reply. I will definitely be asking for a breakdown of what the deposit was for. I would be happy to pay an extra $2-$3000 or something like that I just can't justify $7500 extra when we were still in the planning stage. Thank you Re: Cancelling a building contract 8Mar 31, 2016 8:47 pm Quote: we have signed the HIA lump sum contract. The fact you have signed this may make it harder plus they have already reduced it from the contract cancelling fees. Ours had $10,000 if we broke the contract. However I made sure to get another pre-approval done the week before I signed the contract to make sure they would still happily lend to us - then signed the contract and got my formal approval. I couldn't get formal full approval without a signed contract. I could see them spending $7,500. I have so far paid $15,000 - but I'm up to slab and now have my second invoice. I can easily say they have spent more than $15,000 at the moment when I include all council fees, engineer reports, draftsman, surveyors, company to cut my block, plumbers and parts for my plumbing, water connection to my block (I know that is $1700 just to the council for that), electrical connection, retaining wall (that is just $5300 and I had that cost put onto the last invoice), framing and sand for slab, then the cement company and all the cement for my slab, trucks and pumping company (it was a different company than the cement trucks) oh and nearly forgot the pest guy has already been once to do the pipes before the slab. For you they would have paid for the draftsman and each time you made a change the draftsman will add a charge, the engineer reports as they needed that to do the contract (plus for the council), the surveyor to do the plans and is needed for the contract again, the fees for the planning, did they put in for the water connection when they went for the planning - mine was done by council within a week of signing my contract (some councils charge alot for that - mine is cheap at $1700), then they will want to be compensated for the time with your selections - for us its a 9 hour day - so 9 hours of wages, plus they take us out for lunch so they would want that back. I wouldn't expect to be compensated for the sales, but I would for selection. Also there is the soil report which can be $1000 on their own. So I could see them spending $7,500, especially if it was after signing that contract and not just the tender one. I know we paid $3,000 at the tender stage and was told everything they do will cost more than $3,000 but because they are sure you will sign with them they will make the rest of their costs back in the contract. I think she told us it was $5,000. I think your just going to have to take this as a life lesson with signing contracts and pay the extra $2,500 to cover their $7,500. I would also be happy they dropped it also when really they don't have to if they wanted to force the issue. This wasn't just the tender you signed for in which you just pay the costs occurred, this is the full contract - just like a normal house purchase - if you pull out half way through settlement you still have to pay the vendor a cost and it wouldn't have even cost them money whereas the builder in this case has paid out funds. ~Shellby~ GJ Bridgewater 203 11/3/2016 - Site Work Started 29/9/2016 - Handover 142 Work Days 6 Work Days Over https://forum.homeone.com.au/viewtopic.php?f=31&t=80174 Re: Cancelling a building contract 9Mar 31, 2016 8:54 pm Thanks for all of that information. I can see that they would have spent $7500 all up. But what they are asking for is an extra $7500 on top of the $5500 we have paid. So if we pay that we have paid them $13000 in total. Bearing in mind that nothing has been done other than drafting and council fees etc. Power, water connections etc have not been done yet. We haven't even signed our final plans or received our final costing yet. I just don't understand how they've spent $13,000 on our project yet. Hope that makes sense. Really appreciate everyone's replies You talk about deletions, are they variations or PS and PC adjustments? pleas list them 1 16556 I've decided, after a period of confusion (my building broker told me it's probably not worth it to use a lawyer, but others have said it is a must) that I definitely will… 7 27951 |