Hi, ok I do feel rather silly posting this and I suppose I should have known better but I just didn’t and I could really do with some help and how to proceed.
I live on the Sunshine Coast and wanted to build a 50sqm auxiliary building on my existing residence in Maroochydore to rent or Airbnb.
The contract was signed in October with a company that I thought sounded good (mistake 1?)
I paid $ 39 525 for the building deposit in October 2019. The quote was for a building that was then 59.2 sqm for $ 81 290. The building was to be delivered contractually 6-8 weeks after the deposit was paid (Due in Jan to be build in February).
My problem
1. NOTHING has happened, every month I hear other excuses (the factory in China where the house comes from (I know! mistake 2?)
was closed for 10 weeks but was opened up in March but still, nothing happened)
2. The building also has been shrunk to 40 sqm (although I still have to see a finished plan yet, they said this was so that the certifier would sign off). The shrinkage is not reflected in the price, even though they cut part of the roof off over the teeny tiny deck and took over 15 sqm off the building.
3. This week I received an email for “extras” that we had discussed but I never gotten the price until then. Once I heard that these would be another $ 25 000, I wrote back and said please just include what is standard and no extras. (This is what the builder said: “In light of your recent communication we are now obligated to request a supplementary payment of A$25 000 to be paid upon receipt of invoice.
This Invoice will cover the extra costs outlined in our previous correspondence.This payment will ensure that the building materials for your Secondary Dwelling will be delivered to site by Mid June.
This payment does also ensure that Australian Base Camps is not left to manage the risk of a breach of contract or associated costs We will then require a supplementary payment of 25% to begin the build and assembly process. We look forward to a mutually acceptable outcome and timely completion not withstanding these most unusual circumstances. “)
3. Nothing has happened building wise at all in the 7 months, which means they have breached the contract. And I don’t see any guarantees why anything is going to happen, even if I would agree and pay an additional $ 25 000 All they have given me is a computerized plan of the house, they do not give me the name of the certifier that has apparently said the plans where good and will be certified once the building is up (is it normal not to have to lodge any paperwork at all for a small building?)
4. I know I am a bit late (mistake no 100) but I have checked and it seems the company they are trading under is
1. not registered as the company on the contract 2. It seems he doesn’t have a builder’s license (does he need a builder’s license for a small dwelling or as he calls it an Ikea house from China)
I am so upset about the whole thing and now being asked for more money after seeing nothing and feel really stupid that I didn’t check his builder’s license and I just let them put me off every month with other excuses. I did however ring his references and he had indeed built their houses.
My question is of course, what would you do? Get a lawyer and try to get my deposit back and get in a legal fight? Ombudsman or what else can I do? And do we have a lawyer here that would deal with this? I am not sure what the goal should be? Get my deposit back and start from scratch or force them to build the house for the original price?
I know that you all can’t give me legal advice but what shall I do and what should my next steps be and what would you do?
Thanks so much for taking the time and care to help. I really appreciate it!
Susanne12Susanne | Susanne McAllister Wellness
https://www.susannemcallister.com
Email Me | Phone MeOh Susanne.
This sounds horrible, and I’m sure you are feeling quite anxious and stressed. Hang in there… I’m confident a solution can be found.
First of all, building disputes are incredibly common. In fact, I think if there was ever a building contract that didn’t have some wobbles, I would be amazed. Just look at the State government and their construction contracts for roads and tunnels. So-called water tight contracts leak live sieves.
Now to your situation. Yes, there are some lessons to learn about due diligence before engaging a builder, and the dangers of having supplies sourced from overseas (and China in particular – quality, environmental, warranty, etc.), and about having paperwork reviewed by a legal eagle. But all that is in hindsight now.
Did you actually sign a building contract (you seem to indicate there is something)? You seem to have at least a quote, but was that translated into something more formal? If so, while that is likely to be loaded in the builder’s favour (you can actually negotiate the standard wording), it does at least set out your rights and responsibilities that you can seek legal advice on in respect to performance and enforcement. It sounds like you want to either ask for performance (i.e. build the house), or else terminate the contract and get your money back.
The problem with getting your money back is that the builder probably doesn’t have it anymore, hence why they are trying to shake you down for more. The pandemic has caused a cash squeeze, and builders are notorious for poorly managing their cashflow (using future projects to pay for completion of current projects). If the pipeline of future work dries up, then they can’t pay to finish existing work and pay out accounts (sub contractors, supplies, etc.), hence they can’t use those trades and suppliers until they’re paid.
That said, the request for an extra $25k just sounds like a mafia style shakedown to me and causes me to question the entire integrity of the builder. If it were me, I wouldn’t want to deal with them anymore.
So, what to do? The short answer is that you leverage to force the builder to do the ‘right thing’, and that is going to require some legal heat.
Here’s what I recommend:
1. Don’t pay a single cent more until this is sorted out!
2. Confirm what paperwork you have (emails, contracts, txt messages, plans, etc.) and get it in order.
3. Head off to see a lawyer who specialises or has experience in building disputes.By the way, don’t threaten the builder with legal action, nor tell them you are seeking legal advice. Keep that up your sleeve.
Please keep us in the loop about how it all goes.
– Steve
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
I am very sorry that you find yourself in such a situation. Unfortunately, such companies are not uncommon.
I know it’s been a very very long time but, given the situation, it might be a good idea to seek legal advice to understand your options. A lawyer can guide you on whether you can get your deposit back or negotiate with the company.
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