Increase of PC items in building contract

[laurieload]

I'm receiving conflicting advice on this so I thought I'd run it by the legal gods at Somersoft in the hope that someone has handled this sticky situation before:

We are finishing up a (stressful, error riddled) GF build. Builder has lumped us with extra variations in the very final invoice, many of which were not in writing beforehand. Also trying to charge extra 15m of submains cable that wasn't in original quote but listed as a PC @$55/pm. GF is next to main house (which is raised), and the electrician ran cable from switchbox on other side of main house, through roof and down a wall to GF, instead of under house. Cable was only dug underground for 1.8m between premises (by hand) so no big cost there. No new switchboard was installed for house and there was no upgrade of mains from house to pole.

My questions:
- can variations be charged if not in writing? Do they need to be in writing at the time of installation?
- can PC items be charged at whatever on contract or does it need to reflect charges passed on to builder? (I have not seen electrical receipt for submains, just length of cable laid and am sure the electrical bill was much less).
- do we have to pay this invoice by due date if we challenge it and ask for mediation through Dept Fair Trade?

Any advice gratefully received and appreciated!

 

[Terry_w]

I'm receiving conflicting advice on this so I thought I'd run it by the legal gods at Somersoft in the hope that someone has handled this sticky situation before:

We are finishing up a (stressful, error riddled) GF build. Builder has lumped us with extra variations in the very final invoice, many of which were not in writing beforehand. Also trying to charge extra 15m of submains cable that wasn't in original quote but listed as a PC @$55/pm. GF is next to main house (which is raised), and the electrician ran cable from switchbox on other side of main house, through roof and down a wall to GF, instead of under house. Cable was only dug underground for 1.8m between premises (by hand) so no big cost there. No new switchboard was installed for house and there was no upgrade of mains from house to pole.

My questions:
- can variations be charged if not in writing? Do they need to be in writing at the time of installation?
- can PC items be charged at whatever on contract or does it need to reflect charges passed on to builder? (I have not seen electrical receipt for submains, just length of cable laid and am sure the electrical bill was much less).
- do we have to pay this invoice by due date if we challenge it and ask for mediation through Dept Fair Trade?

Any advice gratefully received and appreciated!

What does your contract say about this? That is the agreement.

 

[laurieload]

Hi Terry, its a standard HIA contract.

- Clause 21.6 (a) states if the actual PC amount is less the difference is deducted from price. I haven't seen a receipt with charges for any works so assume I am within my rights to pay anything until provided with this?

pg 35 in the contract which lists Attachment B (the Consumer Building Guide) - states before work commences on a variation, the builder should give written description of work, specifications, extra cost, extra time needed etc. Then both owner/builder need to sign written doc agreeing on work and price. Word I'm looking at here though is "should".

- I can't find anything about what to do if an invoice is disputed in terms of payment. Clause 15.5/6 states progress claims must be paid within 5 working days other than in relation to the final progress claim.

 

[Tigerboy]

I think you're building in Victoria. If so the law is very clear you can't be charged for variations unless you agreed PRIOR to the builder undertaking them. The sub mains seems rubbish as mist contracts provide that electricity connection is included. For PC ite. So the builder can charge a margin for any items you spend more than allowed. The margin must be stipulated in the contract.

Don't get pressured into paying for things you don't have to.

Good luck.

 

[Scott No Mates]

You may need to get a professional contracts administrator on board asap to finalise the claim (for your protection). As this is not your ppor, you may be required to comply with the terms of the security of payments legislation so you have strict timeframes to comply with especially for objections/lodging counter claims.

The adjustment of PC sums can be done several ways and it does depend upon the contract (or version of contract). In some instances margins are charged on all overruns individually, in other cases it is done on the total overrun etc - your contracts administrator can do this (without resorting to legal representation).

 

[Tigerboy]

Scott no mates, if the build is in Victoria, the Security of Payments Act will not apply to the owner. I'm not sure in other states. I agree that having a person who understands construction contracts would be very useful to resolve the disputes.

 

[S.T]

Not much use building a GF in Victoria unless it is for a dependent family member.

 

[Scott No Mates]

Tiges, as far as I understand the SoPA legislation, is that it doesn't apply to a ppor, anything else is covered eg ip, granny flat, commercial property etc.

 

[Tigerboy]

Scott, in Victoria the act excludes Domestic Building Contracts (residential building) unless the owner is in the business of building. I would suggest a simple development may not be covered. The act doesn't refer to the intended use at all. Again I have no idea of other states.

 

[Scott No Mates]

Tiges,

in NSW the legislation does not apply to (Part 1 Section 7):
"(b) a construction contract for the carrying out of residential building work (within the meaning of the Home Building Act 1989) on such part of any premises as the party for whom the work is carried out resides in or proposes to reside in".

As the owner generally won't be residing in the GF, then the legislation will apply to this contract. Can't speak for Victoria (but the legislation definitely varies from that of NSW).

 

[Tigerboy]

Scott,

Definitely different with serious consequences. In NSW do you need to declare that you intend to live in the building prior to starting, or at any stage?