Browse Forums Building A New House 1 May 04, 2020 8:35 pm Hey! Our build has taken 2.5 years now, and when we’re finally towards the end of our single story house build, the builder has said that they won’t get the OP if we don’t sign the variations they sent almost 2 months ago. Quick recap. The builder started work on site on the 3rd of October 2019, there was an initial variation of almost 13k and then there was nothing till we got an email end of Jan 2020 and mid Feb 2020, where there were other variations that equaled another 6.5k. One of the variation’s included asset protection fee from council and other work such as: Crossing permit & timber crossing on driveway Stormwater pollution prevention control Provide sediment control to the base Provide 7m x 3.5m of crushed rock to driveway etc. The other: Removal of dumped rubbish Removal of approx. 75m3 excess soil These were all completed without our knowledge and without our consent and now the builder is saying that we have to make that payment. When we did eventually get these variations, we disputed them immediately and the builder never replied, until now - 2.5 months later. Did anyone else encounter such dispute? How did you go about it? Re: Variations dilemma 2May 05, 2020 8:46 am Variations claimed are questionable, builder's method of claim is questionable You need experienced building contract consultant to assess and advise you 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: Variations dilemma 3May 05, 2020 10:07 pm building-expert Variations claimed are questionable, builder's method of claim is questionable You need experienced building contract consultant to assess and advise you If we don’t pay him can he delay the process of getting OP and drag the final completion stage? According to the contract, the builder has to get written consent from parties (owner) prior to carrying out the variation - mentioned in both special conditions and general conditions of the HIA contract Re: Variations dilemma 4May 06, 2020 6:40 am If you don’t have someone professional looking after your building contract, builder may not take you seriously and do what he likes. 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: Variations dilemma 5May 06, 2020 8:54 am hejazs Write a letter to the builder explaining you believe they have breached the terms of your contract regarding variations. Ask them to respond in writing within 5 days as to why they feel they are entitled to the additional $6.5k including supporting evidence such as the original copies of their suppliers tax invoices for your consideration. Also ask them roughly when they consider practical completion will be achieved, and what’s left to be done. Get all the facts you can documented and then consider these. Give them a fair opportunity to explain themselves in writing. They may have made an honest mistake. You may consider paying them something if its reasonable. If the builder doesn’t cooperate consult an experienced building lawyer at a cost of about $500 per hour. This could be money well spent if it saves you the stress and costs of possible intentional delays later. They may also be able to obtain full uncapped liquidated damages to cover your rent and other delay costs if the builder intentionally delays handover. Unfortunately some builders like to try these things on and expect customers under pressure just to roll over and pay up such amounts without question. Call out their bluff, if turns out thats what it is! They will now need to think carefully about putting things in writing. This further advice that I found about handling un-approved variations from the builder may assist your understanding: Disputes often arise is where a builder fails to obtain signed variations before doing the work. The only times builders may do extra works without the owner signing the variation are in the following circumstances: Where the works and/or materials are designated in the contract as a prime cost item or a provisional sum item (and this work is not a variation). Where the owner asks for a variation in writing and the builder reasonably believes that the variation will not require a variation to the building permit, will not cause any delay and will not add more than 2% to the original contract price. Where a builder is required out of circumstances beyond the builder’s control to carry out a variation by a building surveyor or other authorised person under the Building Act and the owner does not dispute the notice within 5 business days. Where a builder has failed to obtain a signed variation they may still be able to recover payment if there are exceptional circumstances or they would suffer significant or exceptional hardship and it would not be unfair to the building owner. To seek to enforce unsigned variations the builder must make a claim at the appropriate tribunal. Builders would need a valid excuse why the paperwork was not done at the time and have irrefutable evidence that the owner knew of the exact work to be done and agreed to payment of the approximate amount payable for this work. Re: Variations dilemma 6May 06, 2020 3:15 pm Norfolk @hejazs Write a letter to the builder explaining you believe they have breached the terms of your contract regarding variations. Ask them to respond in writing within 5 days as to why they feel they are entitled to the additional $6.5k including supporting evidence such as the original copies of their suppliers tax invoices for your consideration. Also ask them roughly when they consider practical completion will be achieved, and what’s left to be done. Get all the facts you can documented and then consider these. Give them a fair opportunity to explain themselves in writing. They may have made an honest mistake. You may consider paying them something if its reasonable. If the builder doesn’t cooperate consult an experienced building lawyer at a cost of about $500 per hour. This could be money well spent if it saves you the stress and costs of possible intentional delays later. They may also be able to obtain full uncapped liquidated damages to cover your rent and other delay costs if the builder intentionally delays handover. Unfortunately some builders like to try these things on and expect customers under pressure just to roll over and pay up such amounts without question. Call out their bluff, if turns out thats what it is! They will now need to think carefully about putting things in writing. This further advice that I found about handling un-approved variations from the builder may assist your understanding: Disputes often arise is where a builder fails to obtain signed variations before doing the work. The only times builders may do extra works without the owner signing the variation are in the following circumstances: Where the works and/or materials are designated in the contract as a prime cost item or a provisional sum item (and this work is not a variation). Where the owner asks for a variation in writing and the builder reasonably believes that the variation will not require a variation to the building permit, will not cause any delay and will not add more than 2% to the original contract price. Where a builder is required out of circumstances beyond the builder’s control to carry out a variation by a building surveyor or other authorised person under the Building Act and the owner does not dispute the notice within 5 business days. Where a builder has failed to obtain a signed variation they may still be able to recover payment if there are exceptional circumstances or they would suffer significant or exceptional hardship and it would not be unfair to the building owner. To seek to enforce unsigned variations the builder must make a claim at the appropriate tribunal. Builders would need a valid excuse why the paperwork was not done at the time and have irrefutable evidence that the owner knew of the exact work to be done and agreed to payment of the approximate amount payable for this work. Thank you so much for all this!! This has been a great help and very insightful information for us. The builder cannot prove our prior knowledge or consent to the works being carried out as the work was conducted in October whereas we found out about it in January and February the following year. At the moment the builder is trying to manipulate the contract to their advantage, and we were really confused and almost became lenient to sign the form, until we read the contract again without the builders highlights and realised that he has only highlighted part of contractual clauses that favour him and left the remaining of the sentences that go in our favour. Currently he carried out work from the excluded from contract such as removal of soil - without notice or our knowledge. We could have used some of that soil to level our land so if anything, we’re at a loss in that regards. Furthermore, we asked him for proof with the invoices for variations as you mentioned and he is saying that they are internal documents that they can’t really release - although they’ve only sent us four photos of the soil removal. Currently as they’ve went 1.5 years over the build time, we are in considerable debt and don’t have the finances to pay that amount and the fact that they’ve just started negotiating with us, maybe means that you are correct and we just have to keep acting on their bluff to call them out and hopefully not have to bear these costs that we don’t have the money for. Re: Variations dilemma 7May 06, 2020 4:58 pm hejazs Thanks for your appreciation. Knowledge is power! I believe the 'further advice' that I found may be quite similar to the guidance about this situation provided by the Housing Industry Association's (HIA) legal service to its member builders and therefore I would assume your builder has words to this effect to guide him. I would assume the builder will have tax invoices readily on hand for the following 3rd party services and products purchased on your behalf, particulary as he seeks to get you to pay for these plus his 'builders margin' of 35% or so on top: Crossing permit & timber crossing on driveway Stormwater pollution prevention control Provide sediment control to the base Provide 7m x 3.5m of crushed rock to driveway etc. Removal of dumped rubbish Removal of approx. 75m3 excess soil If not he may have some bigger problems with the ATO at tax time, not to mention the VBA and ACCC! It seems very clear to me that your contract states that a security account does NOT need to be established so the answer to the builder is NO. If in doubt find a contract… 1 8505 The fastest thing a builder will do is bank your cheque, those systems work perfectly with lightning speed, everything else is slow burn. Just the way it is. 1 8705 Can someone please offer some advice? Im DESPERATE. Because I'm completely and utterly exhausted. How long are variations taking with other companies at the moment? We… 0 18465 |