Builders - delays and liquidation damages

[laurieload]

Hello everyone,

Well our builder has gone hideously over schedule and I'm getting shirty for this and him trying to extract payments for a heap of small variations not agreed to at the last minute. So I'm taking out my anger by wondering about the 'delays and extension to time' clause and the 'liquidated damages' clause.

Our builder did email me about delays getting tradies over the christmas period (fair enough) but hes given nothing in writing or verbally since to explain the delays. Also we asked for very minor variations (3 items @ 2 hours work max).

How do I work out the amount of time I can charge him for going over? Is it based on times he has put in emails? (I didn't get anything specific but willing to be reasonable.) How do people claim this? Does it come off the practical completion payment or do I need to claim it separately?

Thanks in advance

 

[RPI]

Contract should have in it what the delay amounts are. Builder will normally write it in at $50 or less per day

 

[laurieload]

Thanks, yes I know damages but just wondering how to go about claiming them. Does it come off the final payment? I'm finding conflicting info about withholding any payment - builder can charge interest on late payments - and just wondered if anyone had any specific experience in claiming liquidation damages.

 

[smy7484]

Refer to your signed contract to confirm if it's legitimate LD. E.g. may be increment weather can be claimed as extention of time.
The proper way is to certify the progress claim amount and includes a variation (deduction for LD) on the builder claim as you go. However this will usually **** the builder off thus stop works etc. Alot of clients are now only deduct the LD amount on the builder final claim or final 2 claims.
You are holding the builder's Bank guarantee or cash retention too.

In saying so, all should be as per your contract with the builder.

 

[vaughan]

Also we asked for very minor variations (3 items @ 2 hours work max).

Builders make money from variations. The rationale is that the change may appear to be minor to you but it could entail a lot of work at their end, including the cancellation and re-ordering of materials, for which they may lose their discounts. That's the theory.

In reality it's an opportunity to charge, and they do. Get used to it.

I worked at a large academic intuition that had a new building constructed. The whole top floor was decked out as workshops. The day after completion a new team of builders went in, ripped it all out and re-fitted the floor as classrooms. I asked the architect why this happened and they said it was much cheaper to do this than to issue a variation during construction.

 

[laurieload]

Thanks for the replies and advice Smy7484 and Vaughan.

Wow Vaughan that story is outrageous! Somebody must have ****ed up big time to change their mind from workshops to classrooms on such a big project!

I will see how I go adjusting the final payment to take into account the LD's. Will post here if it turns into a nightmare!

 

[Tigerboy]

Hello everyone,

Well our builder has gone hideously over schedule and I'm getting shirty for this and him trying to extract payments for a heap of small variations not agreed to at the last minute. So I'm taking out my anger by wondering about the 'delays and extension to time' clause and the 'liquidated damages' clause.

Our builder did email me about delays getting tradies over the christmas period (fair enough) but hes given nothing in writing or verbally since to explain the delays. Also we asked for very minor variations (3 items @ 2 hours work max).

How do I work out the amount of time I can charge him for going over? Is it based on times he has put in emails? (I didn't get anything specific but willing to be reasonable.) How do people claim this? Does it come off the practical completion payment or do I need to claim it separately?

Thanks in advance

Generally your contract will allow an amount for delays (liquidated damages). The builder must notify you of delays to construction. The method of notification will depend on your contract. The fact that he has told you may not be enough.

The usual practice is calculate how late he is, calculate the rate based on the contract allowance and deduct this amount from the final payment.