Hi IMs,
We have found ourselves in a tricky situation. We applied for a home loan a few months ago but to be approved, we needed to fixed house price. We (in a hurry because we needed to get the loan) talked to a builder and signed an initial contract. After we got loan approval, we continued to work with the builder but as time went on, we were less and less satisfied with them.
We recently told them that it wasn't going to work as we felt they were too expensive for us. They have sent us a bill for $8000 (one of which was $3200 for a Council Fee which we have discovered only costs $980 to apply for). We haven't signed off any final plans or any other contracts with them so we are wondering if we are actually liable to pay this. It seem very excessive for what is not much work. With no final plans signed off, they haven't even started the build.
Any advice would be greatly received. Thank you!
6 Replies
I will comment only on the council fee as having worked for a building inspector it is the only bit that I have had experience with. It of course varies between councils and states but the $980 is only the fee to submit your application to council. In order to put in a successful application the builder would have been required to provide engineering and architectural plans, soil test, show proof of having paid their building insurance for that particular job and in qld they would have been required to pay Q leave if your build was intended to cost over $150,000. All of which cost money for the builder. If you feel they're overcharging I would ask for a breakdown of the bill that you have been sent but to be honest these costs do add up and I think you're underestimating how much work is done prior to a build commencing
Get legal advice!
You may want to look into the council fees. If your going to go with a different builder, will you be liable to pay that $3200 again for the next builder to lodge their application with council?
You still owe them their time. So it’s likely you will be liable to pay given you formally ventured into a contract.
You signed an initial contract and they did work as a result. Unless you hire a lawyer that gets you out of it, I'd say you're absolutely liable. If you can save that amount going elsewhere, do. Otherwise, you might want to consider working with that builder.
I work for a large residential building company and you are 100% liable. The council fees will be the certifier fees, plumbing and drainage permit fees, soil, survey, onsite sewerage design (if you have a septic site) qleave( if the build is over $150k) plus many other documents required just in order to lodge an application to council. You need to remember every job takes a whole team of people all completing different task just to get a single job from prelim to final lodged and approved.
Once you sign a contract you have given the builder the ok to proceed with getting all the Approvals required in order to construct a home.