Browse Forums Building A New House 1 Apr 12, 2020 11:47 am Hi all, I have tried to search the forum with this topic with no success. Really needs help/feedback. I approached a builder to build my first dream house, and since this is my first experience, I have no idea how the process is. the builder provided me with a quote that I think is reasonable (for argument's sake, let's just say the total cost of everything including gst and builder's margin is $400,000) On my first meeting, I asked the builder if they can lower the price and letting them know that I also looking at other builder's quote. The builder came back to me with $480,000 and they said I have to sign Letter of Intent, so the builder can get more detail price from the contractors and can draft the contract with details, the letter did not show termination clause, nor fees, just showing that I awarded the builder the project with total cost of $480,000 for everything include builder's margin and gst. So I signed the letter. after that, the builder came back to me with the total cost of $900,000, and they want me to pay method b. Shocked with the price, I told the builder I don't want to go ahead with them, and haven't sign any contract. Now the builder send me letter of demand asking me to pay $10,000, for meetings, for their time estimating and going to the lot and looking at the lot. I am currently waiting for my solicitor, but I would like to know if anyone experience this and what's the outcome? Thank you in advance. Re: Letter of Intent for residential build 2Apr 12, 2020 11:52 am Absolute dog act, what state are you in? Re: Letter of Intent for residential build 3Apr 12, 2020 11:54 am Thank you Doozer for your quick reply, I literally feel bad and want to pay at least $2000 for the builder's trouble, now I am going to loose $2000 for solicitor's fee by replying to his letter of demand. I am in Victoria. Re: Letter of Intent for residential build 4Apr 12, 2020 12:00 pm See what your solicitor says, in WA I could give you advice but every state is different. I wouldn't give them a cent, the can go f@#k themselves, they would of known a rough price that the house would cost before doing any estimating, I would take them to the cleaners if you can, companies like that shouldn't be in the building industry. Re: Letter of Intent for residential build 5Apr 12, 2020 12:04 pm Not a problem, thank you tho for your replies Yeah, this experience is very confusing to me (and first time I got letter of demand), really effecting my work and personal's life. In the Letter of Demand, it didn't say when I should reply to the letter, nor when do I have to make payment. My solicitor said, usually I have to reply within 7 to 14 days. Will update the situation next week for others in the future who got this problem. Re: Letter of Intent for residential build 6Apr 12, 2020 12:10 pm vercy219 Thank you Doozer for your quick reply, I literally feel bad and want to pay at least $2000 for the builder's trouble, now I am going to loose $2000 for solicitor's fee by replying to his letter of demand. I am in Victoria. Unfortunately the system is geared so builders and lawyers can make money from clients...Bad luck my2c, never enter into an agreement without knowing the scheduled fee charges. Designer,Engineer (Civil,Const & Envir),Builder,Concrete & Masonry Contract.Struct Repairs Re: Letter of Intent for residential build 7Apr 12, 2020 12:18 pm StructuralBIMGuy vercy219 Thank you Doozer for your quick reply, I literally feel bad and want to pay at least $2000 for the builder's trouble, now I am going to loose $2000 for solicitor's fee by replying to his letter of demand. I am in Victoria. Unfortunately the system is geared so builders and lawyers can make money from clients...Bad luck my2c, never enter into an agreement without knowing the scheduled fee charges. Hi Structural, Thank you for your reply Does this means I really need to pay $10,000 ? and the builder is in the right? Re: Letter of Intent for residential build 8Apr 12, 2020 12:55 pm Generally a sketch and Budget is free If you have signed a letter for the Preparation of Plans & Contract documents? Then you have an agreement for just that, which generally includes ie Contour, Geotech, Architectural Drawings, Details, Engineering, Specifications , Pricing, Compliance checks, Variation Changes, etc,etc. BTW, I've seen 2 clients (in Perth) sign such agreements for lump sum Builds without preliminary Drawings, specifications & engineering this week My advice to them was don't do it.... Designer,Engineer (Civil,Const & Envir),Builder,Concrete & Masonry Contract.Struct Repairs Re: Letter of Intent for residential build 9Apr 12, 2020 1:38 pm StructuralBIMGuy Generally a sketch and Budget is free If you have signed a letter for the Preparation of Plans & Contract documents? Then you have an agreement for just that, which generally includes ie Contour, Geotech, Architectural Drawings, Details, Engineering, Specifications , Pricing, Compliance checks, Variation Changes, etc,etc. BTW, I've seen 2 clients (in Perth) sign such agreements for lump sum Builds without preliminary Drawings, specifications & engineering this week My advice to them was don't do it.... Is letter for the Preparation of Plans & Contract documents the same as Letter of Intent? I provided the builder with: Contour, Geotech, Architectural Drawings, Details Engineering, Specifications, Building Permit He wants me to pay (this is a one man company): His time as director, His time as estimator, His time as consultant, His wife's time as customer service, His time for the meetings (which most I didn't initiate, and I didn't know he charge me for meeting, nothing in the Letter of Intent) His time and fuel for when he go to the land and have a look. His solicitor's fee for preparing the contract, His time for preparing the contract there is no information about those above when I signed the Letter of Intent Re: Letter of Intent for residential build 10Apr 12, 2020 11:03 pm He is asking for solicitor fee for preparing the contract? In Victoria is a std HIA contract where he would have customise it to his needs. Unless you are his 1st ever client. Perhaps contact HIA and ask their opinion.? If I use my example for 5k: I got soil test. Draft drawing. Surveging. Various meetings and consultations. In your case u provided him with almost everything... So 10K just to do a quote. Re: Letter of Intent for residential build 11Apr 13, 2020 7:56 am vercy219 Is letter for the Preparation of Plans & Contract documents the same as Letter of Intent? No... Letter of Intent has little bearing if you provided all the contract documents ie plans, geotech ,engineeering and building permit? Did you sign the standard MBA, HIA Building contract with the builder/supervisor vercy219 I provided the builder with: Contour, Geotech, Architectural Drawings, Details Engineering, Specifications, Building Permit I doubt you have provided the building permit to the builder? The Local council provides the building permit and the Building commission has strict rules regarding building permits You have to be a competent owner builder or registered Builder? Contact consumer protection in your state Designer,Engineer (Civil,Const & Envir),Builder,Concrete & Masonry Contract.Struct Repairs Re: Letter of Intent for residential build 12Apr 13, 2020 12:01 pm MyFirst He is asking for solicitor fee for preparing the contract? In Victoria is a std HIA contract where he would have customise it to his needs. Unless you are his 1st ever client. Perhaps contact HIA and ask their opinion.? If I use my example for 5k: I got soil test. Draft drawing. Surveging. Various meetings and consultations. In your case u provided him with almost everything... So 10K just to do a quote. He is using Standard Master Builder contract, but he asked his solicitor to review and add couple clauses. And I think you are right, I think I am his first ever client for a complete project Re: Letter of Intent for residential build 13Apr 13, 2020 12:14 pm StructuralBIMGuy vercy219 Is letter for the Preparation of Plans & Contract documents the same as Letter of Intent? No... Letter of Intent has little bearing if you provided all the contract documents ie plans, geotech ,engineeering and building permit? Did you sign the standard MBA, HIA Building contract with the builder/supervisor vercy219 I provided the builder with: Contour, Geotech, Architectural Drawings, Details Engineering, Specifications, Building Permit I doubt you have provided the building permit to the builder? The Local council provides the building permit and the Building commission has strict rules regarding building permits You have to be a competent owner builder or registered Builder? Contact consumer protection in your state I didn't sign the MBA contract that he gave me, my solicitor upon reviewing the contract said, highly chance the bank will not give me money for Method B payment, the builder reason for method b is that, because the cost is big for him, and he have to pay contractor first, so he needs the cashflow. Sorry for the misconception, my architect give me a quote for a service for building permit, I will have to pay directly to that service, it's not finish yet, currently in process. So the builder tasks are only building the house, the details in the invoice in that letter of demand, is for using his (and his wife's) services and expenses to do pricing and preparing contract. I found out from other builders, that my house cost is actually not as what this builder final quote. When I asked him, so what happens if the bank rejects the application? the builder told me, I will still have to pay that amount to him. The HIA contract, in the term & conditions section states that "Commencment" is deemed when the drainage is started or the piers are dug or the slab is formed up (incase… 2 6182 1 4681 Thank you so much everyone. This all makes a lot of sense. I guess when you talk to a builder who butters up everything to look very polished, you get to start believing… 7 17628 |