I am building with the homebuyers centre. My house is completed, they were waiting for the final payment from my bank before they handed me the keys.
They received the final payment today, and I had planned to pick up my keys tomorrow. Out of nowhere they demand $5900 before they will give me the keys! No warning at all!
They list a number of “fee variations” costs that were never spoken of until a matter of hours before I picked up the keysI have given noice to my rental property and am expected to move out within 2 weeks. I have nowhere to move into now!
My bank will not loan me any additional money, as I am at my maximum amount with them. I can’t get a credit card or quick finance because of a previous bad credit (resulting from an unpaid phone bill I knew nothing of)
Is this fair, are they allowed to do this? I doubt I would be able to come up with this amount for at least 3 months (only by saving around $500 a week). If they had given me some prior warning, of at least 6 months I could have budgeted for this amount
Is this a common practice?
Ahhh
Hi Kitty,
With the amount involved it’s worth seeking legal advice; start with your conveyancer / solicitor. A quick letter may smarten them up.I’m surprised that you hadn’t been made aware of the additional costs being incurred. Take all the paperwork when you visit your conveyancer / solicitor and ask their advice.
Good Luck!
Have a look over your building contract – check for ‘prime costings’ next to items. Then check the variation allowance for prime costed items. From memory the standard here in VIC is +-30%. Meaning, if you sign a contract with $15,000 worth of prime costing you can be stuck with a $5,000 bill at the end, no questions or approvals required. I hope this is not the case for you, but if it is, I wouldn’t waste money on legals.
Cheers, F.[cowboy2]
A variation is something that has occured after you have signed the contract, if it is in the contract it should be already listed and priced in the contract. Say you wanted the driveway done in the price, it would be in the contract when you sign it, including the builders % charge. If you want the driveway done after you sign the contract it will become a variation that you should sign which includes the builders %. Which was 20% for us. To put it simply if it is in the contract you pay, if it something they have added or done and you didn’t sign a variation you don’t pay. Another example when it came time to install our water heat/pump the one in the contract wasn’t available so they upgraded to another brand and we had to sign a no charge variation. All variations from you or the builder should be signed for.
RoboCheck the contract. If you picked more expensive PC items eg dishwashers, tiles, taps etc. the builder is within his rights to charge the extras. Normally a builder should notify the client of the variation before they go ahead with the job and get the client to sign off as proof that you are aware of the variation.
Maybe you have rights if the builder did not notify you. It may be worth sending a legal letter. If not check the contract for dispute resolution procedures which sometimes can cheaply resolve disputes with an arbitor or similar. Commonly in these cases it is very hard to appeal decisions to a higher level (normally appeals to be heard are only successful on a point of law, not the facts as presented).
Hope this helps. Good luck.[biggrin]
HI,
All this legal stuff could take a while and it may be contractually you owe them this sum. Just wondering if you have thought of investing $200 ish in a locksmith and get them to change all the locks for you so the builders dont have keys but you do. I know really its a moral question as to whether you would do this or not, but desperate times… desperate measures. if you need to move in over the next couple of weeks it may be an option.
Contact the company and ask to pay off the sum in installments (the $500 a months you spoke of) you never know they might have a nice office/accounts lady that could benefit from a bunch of flowers????
Good luck, I know whats its like to have your settlement date changed and have nowhere to live. Its a horrible panicky feeling. I solved it by having the previous owners let me move into the property before settlement rent free as it was unoccupied. Thats not going to help you though.
Dohicky
You post says Homebuyers Centre which I think is a WA builder. Am I right?
Regardless of which state you are in, you need to read your original contract carefully.
If you changed stuff after the contract signing, they usually give you a variation order that details the change, the cost, and get you to sign.
If not, check your contract for each line item in the Schedule and see if the words Provisional Sum, PS, or something like it are listed against the line item. This gives the builder the right to pass on the cost to you if the actual cost exceeds the provisional sum.
This passing on of costs is very common for site costs like additional excavation, uprated slab or foundations, or increases in materials and labour costs. An earlier poster is correct that there is usually a cap on the maximum amount they can pass on but most builders incorporate the passing on of costs in their contracts.
Is it fair? Not really. The builder passes all risk on to the customer with these clauses. However, in WA where the market is overheated, you would not get any builder to take on a project without these clauses.
If you can’t get finance from anyone your best option is to approach the building company with an offer of payment. You might get lucky.
BUT, if you are in WA I can bet you have been waiting 18 months or longer for this house to complete. I suggest you call around other lenders and get it revalued. I will go IT if you can’t get a better valuation and have someone else mortgage the house for you covering the $5k shortfall. WA prices have boomed so would give you more than enough equity to satisfy another lender if your bank won’t play.
Good luck! Post back with how you went.
Kitty,
Here is something you could try if you find out that you are contractually obliged to pay the $6K. You could ask if the homebuyers centre would take a credit card payment and then apply for a 0% interest credit card for 6 months. This card gives you interest free on transfers AND PURCHASES!! http://www.citibank.com.au/cardsoffer/offers/goldzero_B.htm
If you want to get your credit rating fixed get in touch with Baycorp Advantage and explain the situation because they have the capacity to clear you http://www.mycreditfile.com.au/home/home_default.aspx
Obviously it would be best to do this before applying for the credit card.I hope this helps.
Todd Burns
http://www.freepropertyhelp.com.auHi goodbyekitty,
you have signed a contract with the builder, and they have to hold that price. they can only price rise you if
a) you do not get all approvals in the beginning stages before your contracted 45 working days is up – NOT YOU IN THIS CASEb) you did not pay your final progress payment, hence allowing the builder to charge a percentage of the over all contract price for every day late you are on your payment.
c) the only other one i can think of is that you might not have factored some pre-start variations into your finance, and the builder is actually still owed money by you.
check your contract price..and add up all the progress payments and see if they match up! sometimes pre-start variations are not factored into your final loan approval..and you are expected to pay cash for these.
the builder will give you a reason for the demand of extra cash..they have to… if not go to the BRB (builders registration board) or HIA.
Regards
Lyndon
Originally posted by lyndon_g:Hi goodbyekitty,
you have signed a contract with the builder, and they have to hold that price. they can only price rise you if
a)
b)
c)OR as per earlier posts, if the contract contains prime costing/provisional sums. It’s probably not helpful to post suggestions that the builder has done the wrong thing when for all we know, these ‘variations’ may have been agreed and signed for in the contract. Don’t want to give false hope.
Cheers, F.[cowboy2]I didnt say that it was necessarily the builders fault. Quite often the builder will have a reason which states exactly why its the clients fault for the price increase. they have to give a reasonable explanation though.
provisional sums have to finalised in the final contracts, and by law have to be within 10% of the actual cost of the work.
CORRECTION
provisional sums might not be finalised at time of contracts as they are not yet quantifiable, but the builder needs to give reasonable proof if PC or PS items come in higher than originally noted in the contracts.
im not saying that the builder is necessarily wrong, as most times they are not – many hours are spent ensuring that they are in the right or legally protected! also, many of the documents you may have signed protect the builder as much as they protect the client!
the most important thing is to go back over your contracts and simply crunch the numbers.
hopefully you can work this one out!
cheers
LyndonDisappointing that Kitty has not acknowledged the responses so far.
Still there Kitty? What’s happening?
You must be logged in to reply to this topic. If you don't have an account, you can register here.
