A $25,000 retaining wall

[puffl]

Hi,

We're building a new house and our builder had allocated $2000 for a retaining wall needed along one of our boundaries. It's now built and it actually cost $25,000!

He says the draftsman's plans weren't accurate as to how large the wall would need to be. But he was familiar with the site before quoting.

How would you deal with this situation? It seems like an unacceptable discrepancy to me.

Thanks!

 

[Propertunity]

How would you deal with this situation? It seems like an unacceptable discrepancy to me.

God bless those HIA contracts

Look, it will depend on what your contract says that you agreed to. Is it a fixed price contract? Does it allow for variations? If so, does it require your builder to quote the variation first and get your approval before just going ahead and doing it? Or does it allow him to do whatever he thinks best and then bill you for it?

 

[RightValue]

If it was a fixed cost/quote he will wear it... if it was in the contract as a PC (Provisional Cost) amount (as I suspect it is) then you better start scrambling around for some more money .. because trust me it doesn't add $25k to the value of the property!

You need to start talking to a lawyer as it should not have increased 1250% without you being informed of the increase or potential increase.

good luck

RightValue

 

[skater]

Maybe you read it wrong. Could it be that it actually said $20k instead? I would certainly be very sceptical of any contract that stated $2k for a retaining wall. We have just (built ourselves) a very small retaining wall and the purchase of the blocks alone has come to nearly $1.5k. It is only 13mtrs long and 30-40cms high.

 

[puffl]

Thanks for the responses.

I don't think we have much resort in the contract itself. The wall was a PC item and there was plenty of scope for variation in the document itself, sadly.

But as Skater says, such a large variation from the quote still seems unacceptable. I'm not really looking at legal action, but just wondering how to approach things with the builder and whether I could ask him to cover more of the cost or something.

Basically, it's just frustrating because I'm sure he must have known the wall cost would be more than that, but he's trying to blame the draftsman's plans.

I guess I should have known myself $2000 was insufficient for the retaining work, but I suppose it might be an expensive learning experience.

It's only early days in the building process too, which has us worried that other costs will blow out as well!

 

[Rockstar]

How many sqm were in the wall, how substantial were the footings and what material was it made from. Was it engineered? I can let you know if he ripped you off or not as I build walls regularly.

 

[puffl]

Thanks Rockstar! I don't have the exact measurements but I would estimate the wall is about 30 metres long. It's about 2.5 metres tall at the front of the block, gradually scaling down to about 0.5 metres. A considerable section of the wall would be higher than 1 metre.

And yes, it did require engineering.

I don't really think he's ripping us off but would be happy to have that confirmed.

He has provided me with all the invoices to show what it has cost him. Removing dirt from the block proved especially expensive.

From talking to him further today, I think what has happened is the $2000 quote was for a timber retaining wall but at some point we confirmed we wanted a block wall. I never got the impression this would be so much more expensive (naive perhaps), and thought we had confirmed we wanted block before finalising the contract -- probably should have kept better notes on that!

 

[wylie]

That is a BIG wall!!

We had a block wall about 50m long going from one block high to one metre high. We kept it under a metre so we didn't have to have it engineered. Our trusted blockie built it with proper footings and I am sure it came in at around $8K, but other quote was $12K (from memory).

 

[Perp]

We're building a new house and our builder had allocated $2000 for a retaining wall needed along one of our boundaries. It's now built and it actually cost $25,000!

You need to start talking to a lawyer as it should not have increased 1250% without you being informed of the increase or potential increase.

I don't see any good options. Even if you talk to a lawyer and the builder has to wear it - or some of it - do you really want your builder offside and trying to "make up losses" when so much work remains to be done?

Like RV, to me the really unconscionable thing is being hit with such a huge variation after the work has been done, when your options are severely limited. Surely the builder must have told the contractor who did the retaining wall that there was a $2K provision, and if so, the contractor must have immediately started laughing. Why wasn't it addressed at this point? If the contractor had quoted $25K, you could at least have had the option of getting other quotes, or even electing to do the work yourselves (if you're so inclined), or go back to a timber wall. It really is outrageous to have a provision of $2K and hit you with a $25K bill with no warning. And this stuff about draftsman's drawings is just ridiculous. At the point when you got a $25K quote that argument may have held some sway, but there came a point when the retaining wall guy turned up and saw what the job was, and knew that $2K wasn't going to cut it, and that's when it should have been addressed.

I think I would express to the builder, in writing (or email - anything that can be used as proof later if necessary), that you're extremely dissatisfied with being hit with such a huge variation without any warning. Tell him that you seek his agreement that in future, he will advise you of any variations more than 20% (or whatever) from the provision, or $200 (whichever is the greater), prior to the work being commenced or the item purchased. If he's confident of his provisions, there's no reason why he shouldn't agree to this.

I'm sorry you've had such an expensive lesson, and that the remainder of the build goes more smoothly.

 

[puffl]

Thanks ozperp, that's pretty much exactly the conclusion we've come to. We can't really afford to get the builder completely offside at this early stage of the process, and have him trying to pick up savings along the way.

I've expressed our (serious) concern about having this massive extra cost sprung on us without any warning when he obviously has known for some time that the cost was going to blow out considerably. He's said that he'll start giving us a cost upfront for any new variations, but I think I'll take your advice and put the request in writing as well.

And yes Wylie, it is a big wall! I just had no concept of how much it would cost (naive, I guess, as I said above).

 

[Pushka]

We were quoted $8000 for a 2 metre retaining wall - simply because the footings are very deep. Damn expensive things they are - $2000 was never going to be enough for a 30 metre one.

 

[Rockstar]

You have around 550 blocks in the wall @$3 ea. = $1800 (incl deliv)
Shouldn't be paying more than $4 per block to lay. = $2200
Engineer = $1000
Machinery = $1000
Removal of soil = $2000?
Steel = $1000
Concrete for footings = $3000
Block fill = $500
Labour for footings = $1000

Total = $13,500
Builders margin = $2600

= $16k

This could be increased a fair bit if the access is tricky and you need concrete pumps etc.

 

[Aaron Sice]

if you didn't sign a contract variation for the cost increase then you have no legal obligation to pay.

a builder cannot quote one price, complete the work and then attempt to slug you for the difference - unless you've signed for them to do so.

 

[puffl]

if you didn't sign a contract variation for the cost increase then you have no legal obligation to pay.

Is that the case even if the wall is included as a PS item in the contract?

 

[Pushka]

A PC item means that if you choose a more expensive item then you pay the difference. Seems to me you didnt actually choose to have the retaining wall built differently to the contract. But I bet somewhere in the fine print is a statement that says that some things like foundations are subject to change if unusual conditions are found.

 

[Propertunity]

....Seems to me you didnt actually choose to have the retaining wall built differently to the contract.

Nah, I think Pushka the OP mentioned he did fiddle the wall specs.

I think what has happened is the $2000 quote was for a timber retaining wall but at some point we confirmed we wanted a block wall.

But you're right about all the disclaimers about foundations etc. You never really know what it is going to cost until you get out of the ground.