Fixed Price Contract -Renovation

nepalesesquirrel on 20/11/2021 - 09:17

Hi fellow Ozbargainers.
Signed a fixed price contract with a builder in Decemnber last year, and finally the build started this week with some demolition following asbestos removal last week.

Anyway, so 2 days before the renovation started our builder sent us a revised scope that he wanted us to agree to where he has asked us to pay for our own taps, baths etc where our contract stated up to 8k included.
He also wanted us to pay for our own tiles, the contract states that he will supply up to $50/sq metre. He has also ommited some other things totalling around 25-30k.
His reasoning for all this is rise in cost of materials and labour due to covid, and he says that he will be doing the job at a loss.
We didn't end up signing, and the build has started so we will see how things go.

TLDR
December - signed fixed price contract.
November - 2 days before build commenced builder asked for us to pay for 25-30k of inclusions in our contract.
November- Havn't agreed/signed renewed scope, and building has commenced.

Obviously there has been more back and forth throughout this period but too long to go into everything.

Thoughts from anyone in the industry?

Financial

Comments

  • bemybubble on 20/11/2021 - 09:35
    +3

    Just to be clear. You signed December last year for a fixed price contract and he only started this month?

    Edit: skipped to the TLDR bit and didn’t see the rest lol.

    It’s his contract. Unless there is something in the fine print that allows for such a variation then I’d be surprised.

    Also December last year there were material shortages so he can’t say he didn’t know.

    If he’s started building it’s on him. He’s proceeded on the original contract, not revised

  • nepalesesquirrel on 20/11/2021 - 09:41

    Yeah that has been part of the problem I guess, been delays all along with engineering, council approval etc. He says all delays have been out of his control and I am sure some have, but we feel like we have been getting pushed back for other jobs. He has completed many other jobs this year, which he says signed before us, not too sure about that though.

    • bemybubble on 20/11/2021 - 09:45
      +1

      He’s the builder. It’s his area of expertise. If there’s been delays and he hasn’t factored or considered them then it’s on him.

      Not trying to sound heartless as I can understand there can be variations. But he should have either known or factored in.

      Even if it was completely out of his control, then that’s the risk we have being in business.

      • nepalesesquirrel on 20/11/2021 - 10:01

        Thanks for your opinion. ( I understand what you mean by not trying to sound heartless)
        We are just normal people, we don't want to rip people off, and don't want to get ripped off ourselves. We were happy to consider negotiating some of his 'variations' even though we are not overly 'cashed up', but his communication through the whole process has been very poor and he sprung this on us at the last minute. And he has conceded this by the fact that the build has started under original signed contract I guess.

        • bemybubble on 20/11/2021 - 10:04
          +1

          Well if I’m to be perfectly honest it blows my mind he would start a build if he’s behind the 8ball.

          As serp said below you can always negotiate. Contractually you have him by the balls especially if he has started (happy to be corrected by anyone with legal expertise).

          He’s not the only builder impacted by Covid. Some have taken hits. Some have sailed through the rough seas and gotten by.

          I suppose I smell something off by the manner you have described him conducting himself…

          • nepalesesquirrel on 20/11/2021 - 10:24

            @bemybubble: Thanks. I don't believe he is deliberately dodgy, any more than any other builder, I do believe he would have taken a hit due to covid etc, I do believe he should have allowed for this in his initial contract. I guess from our point of view he should have been in contact weekly or thereabouts keeping us in the loop, we had to make first contact all the way up until now, only hearing from him with his requests for price increases at this very late stage.

  • serpserpserp on 20/11/2021 - 09:57
    +4

    I'd meet him half way but get him to sign a new contract to have build done by x date and absolutely no more cost overruns. I'd believe him in saying his costs have risen, so give him a little, but take with the other hand on getting the job done quicker and with no more surprises.

  • nepalesesquirrel on 20/11/2021 - 10:01

    Thanks for your opinion, appreciate it.

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