Hi I am planning to sign some preliminary building and land agreements. The builder has offered fixed site costs, but has a clause under foundations and site related costs section that has a list of subject to clauses which i am planning to remove since its supposed to be fixed site cost. - Bushfire requirements (no bushland in the cleared estate) lot will be surrounded by houses. - Additional charges for rock/tree removal, root barriers, import/export of material to/from site. - acid sulphate requirements (quite a distance from shoreline so shouldnt be a problem?) Is removal of these reasonable? Also does anyone have the clause for compensation, something along the lines of if siteworks are started and house not completed in 24weeks there be a penalty of $xxx/week? Just think this clause is crucial and would like to add it in the prelim and formal contracts, so I dont have to chase them to complete and handover the house as it seems many builders will just take their own sweet time to complete the last few stages. Also any other clauses that might be protective and helpful when building? Lastly, a bit off topic, but the land is not even titled yet, so technically this H&L package will be like an OTP purchase? The land deposit is refundable but builder wants another deposit for soil test and other admin stuff they plan to do whilst the land is getting titled. Would it be better to just wait till the land titles? the timeline for that has already been delayed by a month and road is up but those green boxes out of the ground are not there yet and lots of council people assessing the site now.
Never run into fixed price site works clauses in building contracts. The normal clause may be a $1500.00 provisional sum amount, subject to clause hard digging and the like. Much like the clauses you have mentioned. It sounds as though the H & L is in a subdivision so it would be reasonable to believe that the developer would have prepared the site adequately. That said a geotechnical report would confirm the carrying capacity of the lot and a good investment for around $500.00 and further the report would give you a good idea of the quantum of earthworks you may need to do, if any, prior to the commencement of building. No probs asking the builder to put in a liquidated damages clause, eg $X.00 per week to cover rental and other costs incurred by you on account of delay. The builder does not however need to agree to the clause being inserted
Any fixed price site costs I have seen have a list of exclusion such as rock. Good luck with having the clause struck and adding in a "real" damages clause. Most standard clauses include longer terms (ie 45 weeks) and token damage amounts is (eg) $45 a week to reflect the notional actual cost of a delay rather than your total costs of housing for that period.
I think its unreasonable and unnecessary. If you check the councils mapping website, that should easily tell you if the land is in bushfire zone and if its soil has acid sulphate. FWIK, a few houses surrounding your house does not eliminate the risk of bushfires. Although I personally wouldn't live in a house built on soil containing acid sulphate (google, risk of skin cancer etc), this only adds costs to the builder - why would you want to eliminate this clause ? Also as Paul said, I don't think any builder will exclude the clause that they will not run into rock. There are many threads here which talk about what should be considered before building including number of power points, usage of LED and how you can ensure the cornices never crack etc.
