Dodgy Builder - Advice till Handover and Final Progress Payment

Hi everyone. I would love to get some more advice, the more the better.

We are currently building a new home in Regional Victoria. This was our first home ever after being in the country for a couple of years. We thought we did enough research to go in with a plan, however, we are now in a potential situation that we are trying to avoid. The builder seemed to have had a very good history, but recently the complaints are piling up with dodgy contractors and build defects. They promised to fix these issues and some clients are still waiting months after moving in, and they are simply being ignored and treated like absolute garbage. Some of the people have started a formal complaints process with VCAT etc, which we will likely do at the end of the process in any case as they are using unethical practices.

From now until the final handover process, we want to ensure we protect our investment and get what we paid for. We only have the final progress payment left. So far they are mostly helpful, as essentially, they are after their final payment, which is why they seemed to pretty responsive to us still. There are lots of rumours about how they are still in business, which we cannot confirm at this stage.

Our first plan of attack is to talk with other local people who had issues to take note of what types of issues they were and get a general idea of what to look for as early as possible. We are also now asking for weekly inspections as we are now at the point where all the final bits and pieces are going in. All good, however, when defects are found we don't have any guarantee that they will be attended too. Legally, they can offer us an occupancy certificate, as defects will not stop us from living in the space, so it does not seem that withholding payments will be an option. The types of defects does not seem to be of a major structural nature. We are trying to get some legal advice as well.

What would you do if you found yourself in this situation?

Happy to provide more info if needed but for now I would not want to make the name of the company public at this stage.

Comments

  • +1

    Why don't you want to name them? If you plan on withholding it as "leverage" does that mean you are asking for help here but you don't want to help anyone else by warning them?

    • I'm trying to do the right thing. They seem like the type of company that would stop the build and try and sue me. Importantly, we have not had some of the severe defects as some of the other people. However, this final stage is where most of the issues occurred. The only issues we have had was a very nasty and rude person to deal with in the office, and multiple potential mistakes that we caught luckily. If I was less involved, these issues would have has more severe consequences.

      • +3

        Dupe account? I saw your comment above.

        • Nope, that was not my account,

  • How much research did you do with this builder?
    Are they are small time builder or a bigger company? Sounds like a smaller guy.

    Sometimes it is worth just going with a bigger company. Maybe just wait and see until you get to that phase, you never know you might be the lucky one!

    • +1

      The thing is, at the time we signed the contracts, the reviews were good. They have amazing builds and have won some awards. It seems that they have had dealings with less than ideal contractors for numerous builds, and we COULD be lucky and not the same issues. As I can confirm that some of the subcontractors are not doing work for them anymore. This does not help people waiting on issues to be fixed, as you would assume their insurance should cover it. I would just like to prepare as best I can if stuff hits the fan and know what my rights are

      • +2

        Are you boxing at shadows, or do you actually have an issue that needs to be rectified?

        So you've signed contracts. What does the contract state? Have you read it?

        If you're at lock up n fix, you wont be able to see any potential structural defects. (they'll be covered by plaster, carpet, roof tiles etc)

  • +3

    Get a building inspection from an independent inspector before final payment. Will cost you maybe a thousand but for peace of mind. New build there is always builder insurance to fall back on if they go out of business.

    • I would not mind paying for an independent building inspector, however if something is not sever enough that will make occupancy impossible, is that something that can be used as not progressing with the final payment?
      Some defects included
      Paint spattered kitchen joinery, white paint on black surface.
      Dodgy and cracking external concrete.
      Stained / Damage tiles

      • +3

        Paint spattered kitchen joinery, white paint on black surface.

        Probably be able to rub off with some water if it is water based paint.

        Dodgy and cracking external concrete.

        You can probably hold some of the final payment

        Stained / Damage tiles

        You can probably hold some of the final payment

        Get the reasonable estimate from the independent building inspector then you can put it forward as withheld until fixed. Backed up by a professional and being reasonable goes a long way.

        • +1

          This is very helpful, thanks!

        • Pretty sure the building contract will say the issue of the occupancy certificate or something similar is the trigger for the (whole) final payment, so it will become due shortly after that. OP would be in default under the contract if he/she withholds part of the payment.

          Contract will have a separate clause dealing with minor defects being rectified after completion.

          • @djkelly69: Sure.

            But the builder would get laughed out of court if it is legitimate and documented (by independent professional) issues.

            Contracts only scare those not in the know. Builder is just threatening if there is a legitimate claim. Threats are cheap.

            • @netjock: You don't get to rewrite the contract just because you are worried something might happen in the future.

              If the contract has a process for dealing with minor defects (which it will), you have to follow it. Unless they are issues which should have prevented the issue of the occupancy certificate, you won't have a leg to stand on if you try to withhold part of the final progress payment.

              Cracked tiles or concrete are very unlikely to be significant enough to prevent issue of the occupancy certificate.

              • @djkelly69: Okay Mr building industry. You obviously don't see reason.

                You are a push over. Been hustled much?

      • Get a building inspector - as then at least you have a third party report in case you do have to go to VCAT down the track.

        They will also give you the method and language to take up with the builder to rectify the defects (as well as an option to inspect the remediated defects if you wish).

  • https://www.builderassist.com.au/wp-content/uploads/2016/02/…

    Use this as your guide to what is acceptable and what is not; build a list of faults in writing (with photos) and get them sorted. Independent inspector is a good idea if you suspect issues.

    Make sure you've got all the required paperwork in order as well as docs like appliance receipts & warranty info, and assume that you'll not be able to get the builder back or make contact again if they do go under or are dodgy etc. Assume they'll never want to come back to fault fix.

    Don't withhold payment without cause though (i.e. make sure you're using the correct contract clause re: defects when providing your list) or you'll be liable for more problems than you need.

  • Use handovers.com to do your final inspection.

  • You’re pretty anonymous here. Perhaps name the builder so others can steer clear.

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