gday Peter.
my first time on this sight. I have a standard MBA contract with a builder and he is dramaticlly over the time to complete our project. Is there any implications like penalty interest.ps when are you coming to Perth to do a seminare
Sean Chinnery
Hi Seano,
Welcome to the forum!!!
Sorry to cut in; [blush2] I know your question was aimed at Peter.
I am assuming if it was written into the contract that any time lapse would incur costs, penalities whatever, then the answer is yes!!!
Cheers,
Jo
Hi Seano,
Have you taken in to account any extensions of time that have been or could be claimed by the builder?The builder can claim an extension of time for any variations made to the contract by you,and for anything beyond the builder’s control that holds the project up.
Tools
Cool thanks Jo and tool. we did have 2 variations, but were told that the builder has to ask for an extension if it was required due to variations. our builder went into volantary administration which slowed things down, they have almost finished our first project after 9 months(the contract was for 140 days!). we have a second development with them. The pad has been done 3 months ago and they havent touched it since. can we get another builder to finish it?
Sean Chinnery
Hi Seano,
Not sure about the legalities of bringing in a third party (ie. another builder) therefore I suggest you approach your current builder and discuss how they intend to compensate you for the delay in works, (ie. dollar value per day) or X amount off the final payment. If after discussions, you are still not satisfied then maybe you could consider an alternative recourse.
But be sure you thoroughly investigate your legal rights, as you don’t want to risk getting into a building/legal dispute.
Cheers,
Jo
Throw more money at the builder and he or she will prioritise your project for sure.
joy to the world
Hi Seano,
If your builder is licensed then I suggest you give the people at the Master Builders Association a call and see what they advise.
A standard building contract will stipulate the building period but be aware that is stated in working days and doesn’t usually allow for issues such as ‘wet days’, rostered days off, delayed materials etc – well according to my builders anyway [biggrin]
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
The MBA are as weak as water and really only protect the builders. Their building contracts are extremely vague and offer little help. If this guy is a little builder I doubt there will be any late completion penalties as getting a builder to agree to that in the current climate is very difficult (unless you want to pay over the odds). If your pads are down and you are just waiting I would say you are another victim of the brick crisis. Unfortunately these delays can really hammer a return on a development and you need to be really careful about what you rush into (especially if you have an aggressive financier breathing down your back, your interest is mounting, the builder can’t build and hence you can’t sell…)
So are there penalties in the contract? Would be interesting to know.
Extensive list of ‘Off The Plan’ property available for sale in Perth.John – 0419 198 856
Seano,
Yes, the builder must ask for,(and you canno tunreasonably deny) an extension of time for it to be granted.If the contract was for 140 days,and they are nearly finished at 9 months,it doesn’t sound like they are much over time.As Derek said,the contract is in working days,and that is for 5 days per week,less public holidays,RDOs,rain days (which an extension of time claim must be put in for) etc.Tell me the contract start date,and I will look at the completion date for you from the MBA calendar.What state are you in?
Tools
Tool, thanks for your input. I just had a good look at my contract, and is says 140 “calander days” not working days, I am in WA. some food for thought for any one building would be to put in a clause for penalty interest(I couldnt find much about it). one posative is that I have found out that I can get out of our 2nd contract due to them not working on it. I guess I should have tacken our contracts to a lawyer, I was a bit nieve this being my first 2 developments. But I have learnt some huge lessons from this which some of you guys out there might learn from(Get legal advice and check your contract thorally).
Seano..have a mate whose building on back of his block with * Corp, he got bricks same time as another friend (whose now been living in his house for about 8 months)
things are going slow in WA (ask Ausprop) however * Corp, have ‘thrown in’ extra’s to compensate..
on the negative they some work also had to be re-done as it was poor work (plus some vandals got in and attacked the bad work)..ya can never be to careful ..
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorWithout wanting to add salt to any wounds, this is an example of why lawyers should be employed to review “all contracts” – no matter how inconsequential the transaction may appear.
Unless there is a provision in the contract for penalties, then without litigation you are not entitled to penalties.
The same may apply in terms of canceling the contract without arbitration. Although as it appears the builder has breached the 140 days condition, then it is likely the contract can be terminated if so desired.
In terms of avoiding delays, rather than the penalty being a rate of interest, a daily deduction in outstanding payment [percentage should always be held over until satisfactory completion] generally ensures the work is completed on time.
— Michael
some great tips there thanks guys
sean
Originally posted by Derek:Hi Seano,
If your builder is licensed then I suggest you give the people at the Master Builders Association a call and see what they advise.
A standard building contract will stipulate the building period but be aware that is stated in working days and doesn’t usually allow for issues such as ‘wet days’, rostered days off, delayed materials etc – well according to my builders anyway [biggrin]
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
Hi
I was wondering if anyone has ever had any luck with builders paying compensation once they have gone over there contract date.
Thanks
Wayne
Originally posted by natwayne28707:Hi
I was wondering if anyone has ever had any luck with builders paying compensation once they have gone over there contract date.
Thanks
WayneYes Nat,
I too would like to know of any over contract comensations.Regards
Can you check with the MBA on this? Do they not have standards / inspectors re this sort of thing?
Maxene L Thomas
Hi,
Can I just add that there are a million legitimate reasons a builder can go over time. So everything has to be looked at before deciding to take further action, it could cost you $$ to do so, only to find out that it is out of the builders control & therefore not his fault.Also, if you are willing to penalise a builder for being over time, are you also willing to pay a bonus if he comes in early? Only fair I would think. Maybe that would add incentive for your builder next time. If a builder doesnt work, he wont get paid so I can confidently say that the vast majority of builders would prefer to be on the job site as much as you want them there.
I do agree also that you really need to scrutinise your contract as once its signed its binding for both parties. [cap]
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