Hi all…

I’ve just finished writing an article from a Gen-Yers perspective (a bit big for a forum post, but still only a few hundred words!)

Take a look at http://www.digitalfish.com.au/property and let me know what you think! [suave2]

G’Day Rakesh,

There’s a couple of reasons that single story homes are cheaper to build than multiple storey:

i) Less engineering involved. You can pretty much just slap up your frames and trusses over a concrete slab with single storeys – the engineer’s don’t have to think much at all [biggrin]
ii) No scaffolding needed. Scaffolding costs a packet, and is essential to comply with safety regs. On a single storey house you can get away with a roof rail when the roof goes on.
iii) Easier access. Building materials are often heavy and awkward. They’re easy enough to handle on ground level, but once you’ve gotta get them up a storey or 2, they become a PITA. It adds a lot of extra time = extra $$$
iv) Just generally more time consuming. In building a house, the quicker I can get it done, the cheaper I can do it for. I’ve built 3 single-level villas in roughly 17 weeks, but 3 double-storey townhouses would set me back more like 25-30 weeks. (These are absolute best-case scenarios)

A couple of people have sent me messages, and I’m happy to get them. If you’ve got a building question, I don’t mind seeing if I can answer it for you. However I’ve got to disclaim anything I say on this forum as constituting my opinion only – Please don’t presume it to be professional advice.

The state governing agencies also have “plain english” contracts which are OK to use (and also have liq. damages clauses).

However I agree with Michael. Go with a builder who’s a member with HIA or MBA, and they will almost definitely use their chosen agency’s contract.

Steer well clear of any other contracts IMHO.

Hi there,

It sounds like you may be getting a bit shafted. I would seek advice from your state governing body (we have dept. of fair trading here, not sure who it is in WA). But you need to check a few things first. Namely, check when the contract period started. For HIA contracts, this is 4 weeks after all paperwork (ie. proof of capacity to pay, construction certs, proof of ownership, etc.) has been submitted to the builder and contracts signed. So figure out what that day was, add your construction period and that will be your completion date.

Someone mentioned withholding cash. I would imagine that there is a standard progress payment setup as with most builder’s contracts, and that the builder cannot claim payment until a stage has been met. Hence, if the stage hasn’t yet been met (ie. completion) there is no payment that can be withheld.

145 working days roughly means 29 working weeks – PLENTY of time to build an average house, even allowing for delays in materials. (There should also be a definition of a working day in your contract). However, if your contract is anything like the ones I use, there will be allowances for industry shutdown period, material delays, etc. The thing is, we can’t claim for these time extensions unless we address them AT THE TIME in writing. For example, I would have to write a letter to the client saying “our bricks are delayed by 2 weeks, we can’t work ’til we get them, the contract period is going to be extended 2 weeks”. You’d then have the opportunity to see this, maybe negotiate a little, and then sign the variation (even non-monetary variations need to be signed).

Granted, most generic building contracts are written up from the builder’s point of view. However I believe that they can be made fair to both parties, and you can even exert a little pressure on a builder. We recently signed a contract with a developer whereby there was a contract completion date with an equal bonus payable to us for every day in advance of the contract that we finished, and liquidated damages of the same amount for every day in arrears. Make it a decent sum and builders will listen. You should also be able to figure out how much the loan (or rent) is costing you by the end of the project.

Cheers,

Andrew.

PS. Don’t try bribes. It just reduces your credibility should the case ever need to be heard in a tribunal/courtroom.

Hi Saleish,

This is my first post on the forum. You guys have an excellent discussion platform here.

I just felt that I should maybe warn you against a $730/m2 price on duplexes. Firstly, I openly state that I have no idea what arrangements you may have with your builder. I also state that I am a builder, and we specialise in building villas/townhouses/duplexes on the NSW Central Coast. We build them for our own development projects, and we undertake contracts to build for others.

We recently built a 300m2 duplex, and it COST us $257,000, or approx $850/m2 exclusive of GST. If we were building this for a client – depending on a myriad of factors to determine our margin and also PC allownace – it would come in somewhere between $320,000-$350,000 including GST. A project like this takes approx 20 weeks, however I’d never sign a contract for less than 26.

We turnover approximately $3m per year, and have good established supplier relationships. I am confident that the prices we get are extremely competitive. In short, I just feel concerned that your $730/m2 build is unachievable, and if your builder is declared insolvent during your project, it will be a VERY costly exercise to get the job finished. When it comes to finishing another builder’s work, most of us will only go under a cost-plus contract, with a pretty standard 20% margin.

Is your builder long-established? How many staff? What is his current annual turnover? How old is he? For what level of turnover does he have Home Owner’s Warranty insurance?

According to Cordells, the going rate for townhouses is $1250/m2 + GST.

Cheers,

Andrew. []