WHY YOU NEED A STANDARD INDUSTRY CONTRACT...A CAUTIONARY TALE

by Dwell Building Services | August 2020 | Custom Home Builders

Last week we were contacted by a local solicitor to provide her client with a building defect report on a recent renovation. She also requested that we do a cost estimate to compare the price that was charged by the builder to what SHOULD have been charged. This is really difficult considering that in the open market, there is no “set charge” for building works. It is on the client to obtain 3 quotes or else get a recommendation for a trusted builder and make a purchasing decision that way.

The plot thickens.

No contract was in place for the renovation works. The price quoted to the client by the builder was $50,000 for an outdoor living/entertaining area, but the final cost blew out to $120,000. When documentation was requested of the clients by their solicitor, none could be produced. No contract, not even a written quote, no plans submitted to Council. Without ANY form of paper work, a cost estimate was impossible because there was no evidence of what the scope of works was in the first place.

A defect report was done and a quote for rectification of the shoddy work carried out, but nothing more.
Heart-breaking for the clients, who were an elderly pair of sisters.

There’s nothing worse than a Cautionary Tale of Woe that goes nowhere, so what can we learn from this exercise?

Often there is the incorrect perception that “cash work” will work out cheaper. That contracts indicate mis-trust. That you don’t really need Council approval for work carried out to your own property.

Unfortunately, nothing could be further from the truth!! Without a scrap of evidence, these poor sisters probably can’t do anything to recover their money. A standard industry contract would have protected both parties. The builder would have been guaranteed his quoted amount in progress payments and the sisters would have had some sort of guarantee that the work would indeed be done to specification.

For anyone looking to obtain building works and/or a home renovation, the key to understanding the quotes presented in all building is:

Labour + Material = Basic Cost + Builder’s Margin + GST

As custom home builders and home renovators, Dwell Building Services uses the standard industry contracts provided by the HIA (Housing Industry Authority). We’ve been members of the HIA for 10+ years and their contracts are equitable and transparent. In fact, as a consumer, you can obtain a standard industry contract free from the Department of Fair Trading - they are quite similar to the HIA contracts and again, equitable and transparent.

Contracts Build Trust.