Paying Contractors

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The advice you always get about paying contractors is “Don’t pay until the works are complete.”

Easy to say. . . . . but most small contractors want payments up front!

Why Contractors Want Up-Front Payment

I have known a lot of small contractors and one recurring problem is getting payments for [read more...]

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Specification

Control of costs is really important if you don’t want to run over budget on your new home.

One of the key areas in controlling costs is understanding the specification of the house.

One of the traps that many people fall into is paying a deposit based on an initial specification, They are then hit [read more...]

New House Guarantees and Warranties

GUARANTEE

I’m always a bit suspicious of guarantees and warranties!

In my opinion most Guarantees are really just a piece of paper that explains how the Guarantor will fulfill their legal liabilities. (In some cases they explain a process which is less than fulfilling their liabilities)

Bearing in mind I’m not a lawyer this is how [read more...]

Avoiding Splitting Responsibility

I often come across people who want to exclude certain items of the work from a house building contract to save money.

They may want to do the work themselves, use their own tradie (relative or friend) or use a different supplier to install things before or during the build.

Liability for Problems

The main [read more...]

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Cost Plus Contracts – Avoid

Cost Plus

What Is A Cost Plus Contract

Basically it is a contract where you agree to pay all the builders ‘Direct Costs’ plus a ‘Fee for Administration and Profit’.

Rather than a quotation the builder provides an estimate with the actual cost being determined at the completion.

These type of contract are only supposed to be [read more...]

Fixed Price Contracts

Having a ‘Fixed Price Contract’ doesn’t mean the bottom line price of the contract will stay the same.

All it means is that the majority of prices for individual work items are fixed.

Here are reasons for changes in the final price:

Planning and Building Approvals Some blocks will have requirements placed on them that [read more...]

Beware of Escalation Clauses

escalation

What Are Escalation Clauses

These are a way of allowing for inflation. Basically it provides a way for the builder to increase his costs in line with inflation.

The Clause will quote an inflation index which can be used to adjust the stage payments.

When Are They Used

I have only used escalation clauses in [read more...]

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Using Your Own Building Inspector

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I frequently hear of people being told by their Builder “You can’t use your own Building Inspector!”

If your builder says that, he is trying to Con You! ……or Breaking The Law!

Here is an explanation based on my last House Contract (HIA Standard Contract) . . . . . .

Possession

The builder [read more...]