additional $8,500 - What should we do?

[Aulyna]

Just excited by starting of our new house few weeks ago, I was shocked today to get a letter from our builder, asking for additional $8,500. It’s titled as “Additional Personal Requirement -provide bushfire protection”.

Our block is in a new released suburb, next to an open land. In the Lease Conditions & Development Requirements, it clearly stated fire protection requirements. I believe the builder knew it clearly as they DO have a copy of the statement and they have build many houses in that area, and their staff know the statement much more than us. (in fact it’s not a person, it’s a company)

The building plan was submitted to the council by our builder and got approved in July; we signed the fixed price contract with the builder in Nov. The slab is just put on.

What will happen if we refuse to sign the additional $8,500? Will they stop building? Should we change to another builder? It will be a long process from design to approve…. What should we do?

Any advice will be highly appreciated.

Regards,

Aulyna

 

[Perp]

Does their letter make any reference to the terms and conditions of the contract? eg "In accordance with item xxx we advise that the contract price has been varied..." And if so, have you read that portion of the contract? (Sorry if that's obvious and you've done that!)

 

[Aulyna]

Thanks

Thanks ozperp,

There is no terms and conditions on the contract itself. It's stated on the Lease Conditions & Development Requirements with the new suburb release.

Before we signed the contract, they charged our bench top additional $3000 for stone. After we sign the contract, they wanted to charge another $4000 on top of the $3000. I argued the size of the bench top was not changed and type of stone was not changed, why you charge more? They agreed to remove the $4000.

Do you think they are finding a way to recover the cost of bench top? If it is the case, what options do we have?

Thanks again.

Aulyna

 

[Perp]

Aulyna, I understand that the bushfire requirements are in the developer's conditions, but my point is that surely your construction contract must say something about how price variations occur? Every construction project encounters unanticipated costs, so I'm sure your contract would say something about that.

 

[Aulyna]

contract not mentioned

Thanks for your reply.

No, their letter makes no reference to any terms or conditions of the contract. It says "provide bushfire protection measures as per approved plans and conditions", but the only condition we got from the council is "metal roofing or walling not to be unfinished" and it has nothing to do with us because we don't have metal roof or walls.

I checked the contract, there is a clause "automatic variations will be necessary if statutory authorities require them". but I think this clause does not apply as no new requirements have been introduced since our land was released.

Aulyna

 

[Raddles]

Hi Aulyna
you may need to check back further with the ACT development authority - as after the 2003 bushfires a number of new measures were introduced - not sure how this will interrelate with your contract - but you do need to clarify what the requirements are - it may be to do with your roof - fire resistant screens - get the builder to clarify the breakdown in the quoted figure.
As someone who lost 2 properties in the 2003 bushfires - if something will protect your property in the future - perhaps it is worth the investment now.
thanks

 

[Aulyna]

Hi Raddles

Yes, i agree it's important to put fire protection measures on as it's not a good thing to loss property.

When we got the land, a bunch of documents came with it. Our block is clearly marked by the develop agency as level 1 bushfire protection zone. our builder knew this as we discussed the requirements with him. We are going to install water tank by ourself, the builder asked us to buy a metal one and use all metal downpipes to comply with the developer's requirements.

The building contract was signed after the house plan had been approved. I reckoned the builder already budgeted it in.

Aulyna

 

[Brinkdude]

Hmm.. messy.

If the development and lease conditions are not met, then the builder will not be able to obtain a "Certifcate of Ocupancy". Which would be one of the final requirements of the contract. If the contract is a Lump Sum contract then I suggest that the problem belongs to the builder.

Perhaps you should talk to your solicitor, who can then examine the documents and provide you with some professional advice.

 

[Aulyna]

Thanks all

Thanks all for kind advices. Feel much better now.

I'll tried to contact HIA first then talk to the builder and keep you guys informed.

Have a good weekend,

Aulyna

 

[Aulyna]

Problem solved ^_^

Hi all,

Just updating the result:

After about 2 -3 month of silent, the builder sent an email today:

Subject: Additional Personal Requirements
Good afternoon
I am chasing up the variation 9/H000465 – Bushfire Protection variation send out to you on the 16/1/08. This variation was raised as per ACTPLA Requirements.
Can you please sign & return by COB Wednesday 2/4/08.
After my reply email, an hour later they called back and apologized it’s their mistake!

How doggy is it? Annoyed me for 2-3 month! If I gave up ealier, the $8500 will be disappeared!

Thank to all replied me messages.

Aulyna

 

[Dave Hooper]

Nice result Aulyna.

I bet you're glad you checked it.