The building dream
Imagine building your home to the point of an empty shell when a large event shuts down the whole country. This happened to me through the first stopping of our economy through the health event in the past. I initially thought the builder would go under and my house would cost a huge amount to complete, especially when building costs moved positively quickly. Watching the news and knowing that essential services which would be allowed to continue working included building gave me some hope. Seeing actual builders turn up on the first day as lockdowns eased was amazing.
The builder
A building contract, even a fixed price one is only as good as the person signing it. Checking out the building company is vital, in terms of past projects and references. A solid contract is important but useless if a builder liquidates the particular entity you sign with. At times lenders can also look for a deeper understanding of the builders past work. This does not mean that a builder is safe if accepted by your bank. In our business we have seen the not so pretty end, where a builder liquidates in the end leaving a client to find additional funds to try and complete the project. This can result in paying twice for certification of work that has been completed already. Especially if the builder has used sub contractors that have not been paid.
The build contract
It is important to understand what you are signing before you sign it. Getting a lawyer to look over a building contract is not common but absolutely should be.
- Timing how long does the builder actually have to finish, does this line up with your loan approval?
- Variations, even fixed price contracts can change with cost pressure, variance is allowed with certain aspects of the build, understand which mechanisms allow for this
- Who pays for council costs and services, is any of this included?
- The last invoice – is it due on “practical completion” or obtaining code of compliance? ensure this lines up with terms of your loan approval
A good builder can make sure there is full transparency and a timely completion of your project.
