Can builder introduce fees not disclosed in contract signed?

[kennyboi]

I had signed a construction project for a granny flat and like to know where I stand with these:

I am at a stage of choosing inclusions and add non-standard inclusions. I am wondering if the builder can suddenly introduce a $250 admin fee not disclosed for choosing non-standard inclusions, and a $250 admin fee for amendments. These fees are neither explained or acknowledged in contract signed. When signing the contract, it was made known to them there are non-standard inclusions to consider and was told it is ok to add later and they will price it accordingly. No where it states this comes with these fees.

Also, their advertising brochure says it takes an estimated 3-4 weeks for design and CDC approval, yet it takes them circa 4 weeks just to get the survey done, and circa 13 weeks for design and CDC approval. Do I have grounds to claim compensation from false/misleading advertising?

Thanks

 

[Propertunity]

Also, their advertising brochure says it takes an estimated 3-4 weeks for design and CDC approval, yet it takes them circa 4 weeks just to get the survey done, and circa 13 weeks for design and CDC approval. Do I have grounds to claim compensation from false/misleading advertising? Thanks

You've probably got no claim since they stated the time was "estimated" and that will give them a lot of "get-out" clause.

Did you have a lawyer read over the construction contract before you signed it?

If the relationship is degenerating this early in the build process, you are not going to have an easy time of it through to completion.

 

[kennyboi]

You've probably got no claim since they stated the time was "estimated" and that will give them a lot of "get-out" clause.

With the "estimated", wouldn't that still subject to it being within a reasonable time period? Even if I double their estimation, I am still out by 5 weeks of potential rent.

Did you have a lawyer read over the construction contract before you signed it?

No, I didn't get a lawyer to read over the contract. They use fair trading standard contract plus a small part of their own construction contract and it seems simple enough to understand. There's no mention of fees or design/approval process time. But now they want to charge me a fee, I wonder if that is at all legal. Had I know this, I might not even sign up with them as I do have a few non-standard inclusions in my design and they know about it.

If the relationship is degenerating this early in the build process, you are not going to have an easy time of it through to completion.

Completely agree. Legal is my last option and less preferred. I am trying to work without coming to this, but I still need to know where I stand.

Thanks

 

[Propertunity]

With the "estimated", wouldn't that still subject to it being within a reasonable time period? Even if I double their estimation, I am still out by 5 weeks of potential rent.

5 week's loss of rent is not going to come anywhere near the costs of hiring a lawyer and even then with little chance (in my view) of success. These types of delays are very normal in the industry - and it hasn't rained yet during the build.

No, I didn't get a lawyer to read over the contract.

Lesson learned, I hope?

A contract delivered to you for signing from a builder is not going to favour the customer. Where's the liquidated damages clause for example?

 

[kennyboi]

5 week's loss of rent is not going to come anywhere near the costs of hiring a lawyer and even then with little chance (in my view) of success. These types of delays are very normal in the industry - and it hasn't rained yet during the build.

I am talking about design and approval phase, not the construction phase. Construction phase is shown as 14 weeks in contract. You are right about that point about liquidated damages. I should of used a lawyer. But too late now.

My main concern is not about damages, but more so on whether a fee can be introduced, but not disclosed or acknowledged when the contract is signed.

 

[Propertunity]

My main concern is not about damages, but more so on whether a fee can be introduced, but not disclosed or acknowledged when the contract is signed.

You need a lawyer to read the contract that you signed, even at this stage, and to give you their advice. No-one on here can comment without seeing the entire contract you signed which you admitted was cobbled together as part of a fair trading and part of the builders own construction contract.

 

[kennyboi]

You need a lawyer to read the contract that you signed, even at this stage, and to give you their advice. No-one on here can comment without seeing the entire contract you signed which you admitted was cobbled together as part of a fair trading and part of the builders own construction contract.

I understand this point that lawyer is needed to go through details. What I was asking is if the contract is clean and no mention of a fee, would they still be able to introduce the fee.

 

[Perp]

I understand this point that lawyer is needed to go through details. What I was asking is if the contract is clean and no mention of a fee, would they still be able to introduce the fee.

Yes, no, maybe.

This really can't be answered by anybody but your own lawyer.

All the emails between you and the builder may also form part of the contract, so you'd have to go through those, too. And any pamphlets or ads they may have given you, and you'd have to look carefully at their generic conditions regarding additional works. And consider the issue of whether, in asking for additional services, it would be reasonable that you'd expect to have to pay for them. And a thousand other considerations.

There is a good reason why people are reluctant to answer these questions and instead refer you to a lawyer (other than because they want you to pay your lawyer a lot of money rather than tell you themselves).

 

[kennyboi]

Yes, no, maybe.

This really can't be answered by anybody but your own lawyer.

All the emails between you and the builder may also form part of the contract, so you'd have to go through those, too. And any pamphlets or ads they may have given you, and you'd have to look carefully at their generic conditions regarding additional works. And consider the issue of whether, in asking for additional services, it would be reasonable that you'd expect to have to pay for them. And a thousand other considerations.

There is a good reason why people are reluctant to answer these questions and instead refer you to a lawyer (other than because they want you to pay your lawyer a lot of money rather than tell you themselves).

Thanks for clarifying that. Yes, I will need a lawyer to get exact answer, was looking to see if it is hopeless to get one now before spending on one.

 

[Perp]

It will cost you more than $250 to find out.

If I were in your position, I'd simply ask them what the basis of their $250 fee is. Either they'll point you to a clause you missed, or they'll have to admit there isn't one, and just might back down.

And builders overwhelmingly don't - I'd almost say never, except I don't have anywhere near enough experience to justify such a strong statement - pay damages for planning delays; they're beyond the builder's control. They know that, and write it into their contracts.

 

[kennyboi]

It will cost you more than $250 to find out.

If I were in your position, I'd simply ask them what the basis of their $250 fee is. Either they'll point you to a clause you missed, or they'll have to admit there isn't one, and just might back down.

And builders overwhelmingly don't - I'd almost say never, except I don't have anywhere near enough experience to justify such a strong statement - pay damages for planning delays; they're beyond the builder's control. They know that, and write it into their contracts.

I probably ask them that and see how I go. I don't like souring the relation over $250, but I don't want to be taken in for a ride either.

As for delay damages, I was thinking of raising that only if they are pushing on admin charge. But thanks for the feedback, this probably won't help.

They have a habit of running open house on their finished product. Maybe I will charge them back a fee should they be unreasonable about it.

 

[Paul@PFI]

All construction activities charge for variations. Its often how they make $. Look at pool builders. BlueHaven have never built a full completed pool for the advertised price since it doesn't include strengthening for most soils, spoil excavation and removal, rock, clay, a filter, sewer connection, fence, council approval fees. landscaping and coping other than the included 2.5m2, filter box, safety sign, essential tools, kreepy crawly, chems etc etc. All in the details and fine print.

And I don't think I have ever seen a builder complete anything by the estimated date. They all blame council approval, weather, suppliers, heat, cold, illness, death I family etc etc....

The council delay may be based upon some sites being certifier approved if they don't encroach neighbours fence. Delayed if it does and more fees. That's common with awnings and pergolas too.

You said non-std inclusions. That's a variation. I would think $250 is fair as it probably involved a bit of source and supply effort and updating specs etc.

Standard agreements are often worded well and give them every reason to take their time. I work with a guy who has a contract to buy based on completed build that said 6 months. Its now 18mths and if he calls them on it they have right to rescind. Its going to settle in a few weeks.

 

[brazen]

And I don't think I have ever seen a builder complete anything by the estimated date. They all blame council approval, weather, suppliers, heat, cold, illness, death I family etc etc....

Yip. This is why my clients get:

1. A 100% Money-Back Guarantee on their approvals. If I fail to get the approval = all their money back. All of it. NO-ONE in the construction industry (that I can find) offers this. Anywhere.

2. Guaranteed four week approval turnaround from the day I'm engaged to the day the approval to build is in the client's hand. So many builders take your 5% then go to sleep for many months, especially when they hit a snag - usually @ approval stage.

3. A properly fixed build price which (as stated in the contract) can only be varied by:
(a) Rock or other unusual substrate IF excavating
(b) Sub-standard (existing) electrical supply line
(c) the client themselves via additional inclusion upgrades. e.g laminate bench-top to stone.

Beware. Many (so many) builders will stick clauses in the Contract which don't include discarding excavated material or digging up old pipes (e.g. drainage, gas etc) so read your contract very carefully. Better yet, get a lawyer to check it!

I've seen so many cases of architects whom get a client to (almost) full approval only to discover that they totally forgot (how on Earth??) to check the site's access to services> he/she designed the dwelling over a Sewer Mains! The costs to fix this are astronomical, so they dump the client and walk away. Client then comes to me, I feel sorry for them and work for next to nothing to save them.

People need guarantees!

Brazen.

 

[Paul@PFI]

Earthing ...Yes. Wait till you dig a hole and find contaminants. Civil firm I was working with had a telecoms client (big one starts with T) who gave us a job to dig a trench and haul fibre etc...Probably $40K of work being billed to the client. We struck a petroleum tank filled with 12,000 litres of 40 year of fuel alongside a river in a unmarked former servo. Dial before you dig didn't even know about it. Took the Fire Brigade and Council records.

Variation ? $2m. Clean up $500K. Insured value $0. All borne by the Telco. And you wonder why broadband / foxtel costs so much.