Browse Forums Building A New House Re: Terms in building contract 4Nov 17, 2012 2:16 pm 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: Terms in building contract 5Nov 18, 2012 3:03 pm I'd agree $1 a day is useless, however The whole clause is based on damages not penalties the HIA contract, and the lawyer you quote above, both suggest an appropriate amount would be based on equivalent rental. Builders base their prices on estimated cost + risk allowance. A builder offering a price for a 6 month completion wants to minimise risk so puts the $1 a day amount in to minimise the risk of paying out. (If I was asked to increase the Liquidated Damages to $1,000 a day I would be increasing the build cost by around $20,000-$30,000 to cover the risk of having to pay out). A builder working on a 12 month completion has a small chance of having to pay will normally accept a more reasonable damages amount without increasing the build cost. 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: Terms in building contract 6Nov 18, 2012 4:35 pm Liquidated damages are meant to be a genuine pre-estimate of your loss if the builder goes over that timeframe and damages that amount to a "penalty" are unenforceable. Its the same concept behind the court action being brought against the banks at present regarding over limit and over-draw fees. The argument is that the "fee" of say $30 is a penalty and non a genuine estimate of the bank's loss because in reality to bank's loss is in the cents and dollar amount. So if you are actually paying $1000 a week in rent, then by all means ask to increase it to $1000 a week, but I can't see a builder agreeing to $500 a day or that amount actually being enforceable. If it were me I'd cross out the $1 a day and insist on it either being something realistic, or otherwise just stating "not applicable" (but be prepared to take them through small claims to establish the actual loss you have suffered for breach of contract if you aren't going to pre-negotiate a liquidated damages amount). The standard I have seen advertised by a few builders is $300 a week. By agreeing to $300 a week builders are actually doing themselves a favour, because the "damage" that most people would suffer for breach of contract in failing to deliver the house on time would be higher than that I would think. We were ok with $300 a week though because our rent is only $250 a week at present (not ideal living situation though). Tender /1/12 Contract 14/6/12 Planning 12/10/12 Site 23/10/12 Piers 27/11/12 Slab 12/12/12 Frame 15/12/12 Trusses 17/1/13 Roof 24/1/13 Bricks 13/2/13 Plaster 1/3/13 I believe that liquidated damaged should be amount of actual loss to the owner from the delays. The issue in all of this is building industry lobbying and contributing to… 5 3434 You talk about deletions, are they variations or PS and PC adjustments? pleas list them 1 16548 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 |