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Guidance - build contract

Discussion in 'Development' started by SaberX, 20th Aug, 2015.

  1. SaberX

    SaberX Well-Known Member

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    WA
    Hi all,

    Any general or specific things to take note of when reviewing your drafted l
    Plans, spec sheets and hia build contract prior to signing with the builder?

    I note the price list quotes me a base.build price of 4k more for example than the base price on all prior correspondence. Even the PPA where i signed off initially (yet to pay 2k associated deposit post signing) had the lower amount listed. Do i have any legal footing given i signed off on this?

    Even soak well storm waters are quoted as 6k over the 4k signed off on. My sales rep picked this up and listed it down on hand written paper to reduce the cost, thinking the base build line should legally be reducable too?

    Any other general tips in reviewing.spec sheet, build contract, plans etc?

    Oddly enough some prestart material indicates after signing you need to have finance say 45 days... But oddly it's these fixed price contracts i need to even apply for the loan? Sounds like a vicious cycle of independency?

    Feeling abit lost as post signing up the communication of what next and process gets lost.

    First time building FYI.
     
  2. Chilliblue

    Chilliblue Well-Known Member

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    Plans are correct

    Materials are correct

    Number and location of power points

    Access to sight to photograph electrical wiring and plumbing

    Access to pinning water pipes against future hammering

    All items priced and agreed on

    Condition site is to be left in

    Start your own spreadsheet you can tick things off.
     
    Last edited: 20th Aug, 2015
  3. wombat777

    wombat777 Well-Known Member Premium Member

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    Watch out for provisional sums! A good way for builders to sting you with extra charges - mostly for site costs.

    Ideally you want a fixed price contract - particular ly if your budget is tight and you have a problematic site ( trees near build zone, reactive / clay soils, rock at low depths which increases cost of trenching for pipes and footings, etc ).
     
    Leo2413 likes this.
  4. SaberX

    SaberX Well-Known Member

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    WA
    I've started looking throught standard specs list.... would it help if I upload the general terms if anyone could browse through for anything unusual? I'm going through with a fine toothcomb anyway....

    The issue is with some of the things you guys suggested, what if the contracts do not allow for say site access to photograph electrical wiring and plumbing (don't owners just walk onto site anyway? it seems everyone does this during their build to monitor?), or if you disagree with anything else? Given these are pre-written contracts what can one do to get them changed as builder I anticipate would just dig their heels in as it is a standard contract? Walking away isn't feasible given you're obliged to pay the $2k for the initial PPA fees for drafting etc....

    With site costs I don't know how I will get this fixed? The land hasn't titled or settled, so I need the build contracts done to submit with formal finance approval to access the FHB grant and stamp duty exemptions for FHB up front (for LVR/deposit purposes- hence can't wait to get it remitted later in the building process). So therefore no site surveys or engineering works can be done. So site costs can't be fixed?? Things like hard digging are costed at $1,300 are provisional but the sales rep mentioned these are hire costs so even if there is hard rock etc. the cost shouldn't change. That said I don't think I can get this formally shown as 'fixed' as supposedly they always show this provisional.

    Ideally i see the sense in what you're saying, but how else can I proceed with the contract when it seems my hand is forced given the situation? Any advice?
     
  5. SaberX

    SaberX Well-Known Member

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    WA
    Also, my sales rep has been usually quite trust worthy/transparent, so I don't doubt his words but what do you think of the following:

    To get the contracts out in time he's suggested signing today immediately to get it to the office on Friday in time to allow contracts finalised for the broker to submit with the loan application.

    He's mentioned this is the most efficient process - to sign the contracts, draftings, pre-sale lot, standard specs etc. sheets as supposedly these need to be signed anyway, and I can then alter/note down items to change afterwards. Supposedly they would then do a variation request to the contracts anyway, so putting off signing these original docs would make no difference?

    Any thoughts on this? Obviously common sense to me would rather have the price list and specs updated now to remove the wrong items (totalling $6k or so from a quick glance) as I know what you sign is legally what you're bound to. But i have the email in writing advising changes can be noted after (not structurally assumedly, just inclusions, costings, draftings?).

    Does anyone know if this is industry practice? Are original documents fixed and must be signed - with any changes made via variations? Or am I potentially setting myself up legally for issues?

    Alternatively I could get the broker to submit finance approval now (developer requires approval by end of month) - and then complete the building contracts after more review say next month, then reapply for the loan by including the final building documents. The land would then settle in say 2 months time, and from what I understand as long as you have the build contract in the loan by land settlement/titles issued then you can access the FHB grant and stamp duty exemptions up front? Would this alternative finance strategy work perhaps?

    Thanks!
     
  6. thydzik

    thydzik Well-Known Member

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    try and delay signing of the contract as long as possible, you want to try and get as many of the unknowns out of the way first, you want to minimise variations as this can be costly.

    as it has been mentioned, try and firm all the provisional sums.

    You can still get an idea of financing without the actual contract signed.

    have you got council approval? What did the PPA give you?
     
  7. Zak

    Zak Well-Known Member

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    Reading the advice given in various forum. Don't trust the sales rep especially they urge u to sign on the dotted line without full examining and concrete all costs. In a few months time into the build and you encountered problems then they will all go back to the signed contract. If it is not written on paper you have no leg to stand on
     
  8. SaberX

    SaberX Well-Known Member

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    Yeap, if not written into contract Zak then if you obtain emails and written confirmation from the sales rep that you need representation in writing, and they confirm they provide that by email, then in time sof disputes surely you can legally stand by on these right? After all if you get a representative claiming to stand by xxx and xxx and if you can't even trust that, how else can you force past your point of contact (i.e. sales person if that's what he's purporting to give you?).

    The finance can't be approved without having a final building contract signed... and the final building contract has provisional sums in there which until the land can be surveyed i.e. when titles are released, they can't be converted into fixed sums supposedly....

    Speaking to one independent lawyer before taking her services she mentioned they generally go through the 'understanding' of the contract as the standard HIA HCBA lump sum contracts can't be varied from builders generally as they are stuck on this... so I have read from head to toe as much as I can about the contracts.

    Unfortunately apart from minor things I don't think there is any recourse with these large project builders to get them changed.

    I am however going through with fine toothcomb the draftings and costings to eliminate items which don't seem right....

    I cannot get provisional amounts for crossover, soakwells and hard digging etc until land is surveyed and so forth.