Fixed price contract

Discussion in 'Legal Issues' started by seederfarm, 6th Sep, 2021.

Join Australia's most dynamic and respected property investment community
  1. seederfarm

    seederfarm Member

    Joined:
    27th Apr, 2016
    Posts:
    11
    Location:
    Sydney
    Hi all, first timer here and first-home buyer in the process :)

    I have recently left an EOI deposit on a home+land package with a semi-reputable builder (Sydney).

    The original advertisement had the H+L advertised at $929,000. I placed the EOI deposit of $2.5k to 'take it off the market'. This was a little over a month ago.

    Recently the vendor/builder's sales rep came back to me and informed me that I'm looking at $960,000. The change has been due to: a) material cost increases and b) laying a thicker bracket/bar on one side of the house that runs parallel to a drainage easement. I take it that it's more likely than not, that they are capitalising on a hot market.

    Moral of the above aside, the vendor's sales rep has told me that he will get it in writing that there will be no further increases/variations in future and that this new amount of $960,000 is all I will be paying.

    My current conveyancer has advised me (as it seems to be the general case) that he only takes care of land contracts and cannot assist with build contracts.

    My question is: what is the default position in the industry? Legally, what will I need the vendor/builder to explicitly include in the contract so that I'm not up for any cost increases or variations or 'surprises'? Are these bulletproof?

    Thank you for anyone's assistance.
     
  2. Scott No Mates

    Scott No Mates Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    27,103
    Location:
    Sydney or NSW or Australia
    Standard pricing is for a standard set of circumstances your block has an easement which they are required to accommodate in their build. You need to get the builder to confirm what is the extent of the additional works.

    As to additional costs due to materials, prices have been increasing of late and their advertised price should have taken this into account.
     
  3. belleran

    belleran Member

    Joined:
    26th Jun, 2015
    Posts:
    6
    Location:
    Qld
    Cost of building prices has gone up dramatically since I signed a standard building residential building contract with our builder. The builder is now repricing. I can understand PC and PS items changing but shouldn't the fixed price component have to stay the same and the builder have to wear the cost increases?
     

Buy Property Interstate WITHOUT Dropping $15k On Buyers Agents Each Time! Helping People Achieve PASSIVE INCOME Using Our Unique Data-Driven System, So You Can Confidently Buy Top 5% Growth & Cashflow Property, Anywhere In Australia