Seeking Advice: Should I Continue or Cut My Losses on an Off-the-Plan Purchase?

I recently purchased an off-the-plan house and land package in Mar 2024, with settlement completed the same month. The construction cost of the house is $460k, and I made some custom changes to the design requiring an additional $50k. Its a simple just extending the first floor by another 10m2. This was all finalised in early Sep 2024. At that time, the builder assured me there would be no further costs, and the next step would be to submit the plans to the council for approval.

After three months later, I received an email from the builder indicating that due to recent BASIX changes, additional modifications are required for compliance. This includes double-glazed windows, enhanced external wall insulation, ceiling fans, and solar panels to improve the house’s thermal efficiency, meeting the BASIX 7 STARS requirement.

These mandatory changes will incur an estimated minimum extra cost of $34k. Based on my research, the BASIX changes came into effect on 1 October 2023, well before I signed the contract. It appears that the builder was unaware of these changes, and the building was sold without including the costs that are now compulsory under the new legal requirements. Additionally, they have removed the facade from both the left and right sides and the back of the house, retaining only the front, yet they are still requesting at least an additional $34k.

I have raised this up to the builder and questioned the BASIX changes came into effect in October 2023, well before our contract was signed. They came back stating the increase is actually due to the delay of the floor plan changes I made on my end.

And they have also pull the building contract stating one of the special condition which states if the building have not commenced within 6 months. They reserved the right to charge a variation for any price increase from building material suppliers.

I am concerned that the builder may request additional costs as construction progresses. Furthermore, I have lost confidence in the builder’s ability to complete the house without major defects or issues. Consequently, I am considering terminating the contract and engaging a reputable and experienced builder to continue the work, or potentially selling the land and moving on.

I have consulted with a few individuals who have suggested that terminating the contract at this stage would result in the loss of the 10% deposit. Could you please advise whether I am legally entitled to recover my initial 10% deposit from the builder under these circumstances?

• This topic was modified 14 hours, 53 minutes ago by  asou.