pompeywill

Just when we think things are going to plan.....
I am having a house built in Perth, signed up last April and was told the whole project would take approx 14 months.
The wife and I spent about 4 hours sat with the salesman discussing the plans, stretching our budget to the limit we managed to order a fairly reasonable house, costing $100,000. To get this price we had to take out floor-coverings, blinds, no internal doors or wardrobe doors (as a chippie I will fit those myself) basically we got the costs down as much as we could to come in on budget.

Building work was due to start in 3/4 weeks, so after a 9 month wait it was a pretty exiting time.

Then on Monday morning I receive an email from the building company saying that building costs have risen and that they want an extra $18,000 before they will start work. They have given me 10 days to decide to accept these new conditions or they will terminate the contract.

So after scrimping and saving to be able to afford the house how do they expect people to find all that extra money?

If I tell them to get stuffed then I am back to square one, and I only have 18 months to get a house built on my land or I will lose the land as well (at market value or thereabouts) Thats from the date the land was settled which was back in June.

I feel we are being blackmailed, they totally have us over a barrel.
Has anyone else experienced this? Is this the norm in Australia or am I just being ripped off?

I wont name the house builders (yet) but they are one of the biggest in Australia.

biggy

Had u already signed a contract for the $100K if not then I am afraid that they can do whatever they like....if you had signed a contratct then the price stands....they cannot put it up unless u ask them to add stuff to the contract........are they members of the master builders of Australia? If they have broken the contract then it is time to see a lawyer mate......let me know how u go.

Good Luck

Quinkana

Would a transportable house be an option? All sorts available these days.

MrsDagboy

I agree with biggy, unless your contract says that they can increase the price, I would have thought that they have buckleys chance of getting it to stand up in court?

Hope you can sort it out .

Go Banana's !!

Hi, really sorry to hear about your troubles as ours is going through hassle free at the mo with Novus homes yet we hear of loads of horror stories.

My understanding is that if you have signed the contract there is a section in their which DOES allow the builder to adjust the price "due to delays beyond the builders control......"

I do know of costs such as brickies and tilers being increased in the last year - tilers was between 8-16% depending on timing of delivery of tiles, as we got stung for a $2k increase on our original price but this was agreed at the pre-start meeting.

My advice would be to contact the Housing Industry Association who acts as an ombudsman to these sort of disputes.

As a word of advice (my family have been involved in the building industry for over 40 years in Perth) the big boys in the building trade promise you the earth and then you just become a number when you sign on the dotted line......b*****ds !

Good luck but I think you may have a hard choice on your hands.

Warren

pompeywill

We have signed a contract quotation, which we assumed would be the price that we would be paying (as you do).
I believe the building contract is the main contract which you dont get to sign until the construction phase kicks in. They say that if the prestart phase, and various approvals that are required take too long then they can put the price up. I feel that they have been dragging their heels delibrately to hit us with the increase.

sj oldfield

The same thing has recently happened to my cousin. they sold their house in Kinross a year ago and moved in with parents. Bought a plot of land on the new build site inbetween kinross and currambine. they were having a 2 storey house built , as they are mostly 2 storey on that site.
Builders have just added $20,000 to their bill.

They have had to downgrade to a single storey, which ais going to look a bit odd, with the houses surrounding it.

Dont think there is much you can do about it. Sorry

pompeywill

Well at least its not just us then.
Due to hear from the contracts manager on monday to decide what we will do.
I am hoping to at least get the price down a bit, so fingers crossed. Will keep you posted.

btw hope you are feeling better Sandra.
cya soon

GRADERMAN

Hi Pompeywill being a chippie [no fish] why dont you back your own ability and build the house subcontract, do the footings your self then geta couple of mates to help you frame it subcontract the roof the plumbing the brickwork and the electrics the rest you do. if you think it is a bit much try and re price with builder too lock up stage and see if you feel comfortablewith the amount of work that is left, other than that borrow the money it wont feel as much in five years time. you shouldnt have given somuch time before start date. you are not being ripped off any more than other people its just they dont say. good luck with your project
GRADERMAN

steandleigh

If your builder is " one of the biggest in Australia ", then surely you will have recieved a copy ( from the builders at the time of signing the contract ) of the " New Home Construction contract " ( QC1 2000 ). I would read through the small print of this and contact a good solicitor - basically, they do not have a leg to stand on - if construction costs have risen - that is THEIR problem and most certainly not yours, if they were incompetent at the time of quote, then they have to stand it, not you.

Don't be ripped off mate...

A question - why will you lose your land???

Good luck, best wishes and go get 'em!!!!

sj oldfield

Just driven passed your 'house' If it is any consolation the area is really coming along nice. loads of shops are opening up, and the price of houses has really shot up in that area...thats if it is any consolation!!!!

pompeywill

Thats the problem, I dont have the buildings contract, they send us that to sign approx 4 weeks before construction. That contract contains a 'rise and fall' clause which stops the builder putting the price up.
The house we chose was $100,000 so we signed up back in April 2004. The same house now is $118,000 so thats the price they want. The contract I signed with the salesman at the time apparently means nothing.
We have delayed nothing, we have signed all the paperwork when requested, turns out we had a trainee dealing with our case who didn't know what she was doing.
Call me stupid if you like but I honestly assumed that the price agreed at the beginning would be the price I would be paying. If you stretch yourself to get a mortgage at the outset and then a few months later the builder decides to add a further 20%, surely thats out of order.
If I dont get a satisfactory answer on monday I will name them on here and say they are definately to be avoided. If it costs them just one potential customer it will cheer me up no end.

I will lose the land if I dont build within 18 months, I think thats standard procedure, they dont want empty blocks of land in residential areas.
The land agents can force me to sell back to them at a price set by an indepedent body.

pompeywill

hi Graderman,
I have considered the option of building myself as the land now has all the required approval and plans have been passed.
I am still in the UK at the moment and was thinking about bringing my own lads over to Aus to build the house.
Not sure if I can do this though, they wouldn't have the Aussie licenses or work permits etc.
I was told I'd have trouble finding brickies over their at short notice as they are all really busy.
My father is a brickie/ general builder and has offered to help but again I'm not sure if its allowed.

cresta57

I think your worrying a bit about the 18 month rule. With the recent boom and shortage of labour you should have sufficient grounds for an extension especially given the circumstances.
If you have not signed the actual contract then all you have is a quote subject to price hikes, it's a dirty trick to pull but legal, usually when you've had your soil tests here [QLD] the builder gives you a revised contract price to include site costs i,e extra concrete in the slab etc. One of the firms I contract to hikes the house price up by 14k on a 100k house, though you are told approximate site costs and warned they may vary. No ideas how it works over there in WA though
Good luck with it all

MaggieNoodles

Hi Pompeywill

You can get a permit to build your own house, as an owner builder, but not sure how long it takes to come through.
I'll see if I can find the building regs website and post a link for you.

If you do choose to build yourself, the builders you have used so far probably won't allow you to use their plans so you may have to resubmit different plans to the council which takes time... Catch 22.

You are right, there have been shortages of brickies, I've heard they can earn around $2000 a week at the moment. If you do choose to be an owner builder you can save alot of money if you do it right, around 30%. (I'm not sure if that has changed over the years with the boom but that was the figure back then).

I wish you lots of luck to get this sorted asap.

MaggieNoodles.

ps. I have sent you a PM