We have made all the selections for our new home and building is about to start. I’m new to this process and while I’m hopeful the house will meet my expectations, I do have concerns. What is the best way to deal with problems during construction?
A: In an ideal world, you’d decide on a new home design, it would be built and then you’d move in. But reality tends to be a bit different. Eden Brae Homes picked up the Professional Major Builder Award for the 2018 NSW HIA-CSR Housing and Kitchen and Bathroom Awards last month and has seen it all when it comes to managing issues. State sales manager Bill Hawie says one of the biggest issues in building is extra costs.
“If a client has chosen a builder with what’s called ‘provisional allowances’ in their site costs, then there’s a chance the builder will charge extra for their site costs during construction and generally the customer won’t know about that until towards the end of the build,” he says. “The term ‘provisional allowances’ is very risky for clients because the initial quote might look very affordable.”
Bill says provisional allowances can apply to a range of factors, including traffic management, materials handling for the job, removing soil from the site or bringing in soil.
“It might be piering, how far into the ground the piers are positioned, drop edge beams,” he says. “If you receive an additional $5000 or $10,000 bill for the extra site costs, then it makes it very difficult to go back to the lender and borrow more money.
“Often the clients would be eating into their own savings which would have been put aside for other things to finish the home like furnishings and landscaping.”
Bill suggests you ask for a “fixed no more to pay” clause in relation to site costs so you don’t get caught out.
Bill says time-frame and construction delays can be other issues for customers, particularly if there’s limited incentive for the builder to finish on time.
“Essentially, if a builder doesn’t finish the construction by the time-frame that they’ve nominated, the standard penalty for liquidated damages is somewhere between
$1 and $5 a day,” he says. “That’s the penalty the builders have to pay the client.
“Eden Brae allow for $500 a week and that is a self-imposed benchmark but it forces us to finish the home within the designated time-frame because we don’t want to be paying that extra money every week.”
Bill says it’s not uncommon to see builders taking more than 12 months or even 18 months to complete a house.
“During that time the clients are perhaps renting and they’re making loan repayments as well so that period can be quite costly if that liquidated damages is only the standard $1 a day,” he says.
When clients step into their new home, they may find things they don’t like.
“It is a dilemma that happens often with colours or it happens when the timber staining is not what they expected,” Bill says. “If you’ve chosen it and the builder’s provided what you’ve asked for, you will need to change it after you move in because to change colour schemes or tapware is a costly exercise during construction, both in materials and time.
“But if the client talks to their supervisor and finds out what the builder’s policy is, they may be open to making that change.”
Bill says quality control can be another issue during construction and he believes it’s in the builder’s best interests if building inspections are carried out.
“For Eden Brae, the integrity of the home is paramount,” he says. “Cosmetic things can be fixed up but the structural component should be built right the first time, otherwise you get more serious defects down the track.”
Bill says most people aren’t qualified to know whether a home is being built properly.
“It’s worth insisting on independent quality inspection reports, conducted by someone who is independent of the company’s supervisor,” he says.
“We have independent builders that do inspections at critical stages of the construction and they provide copies of the reports to the clients at the end of the build.”
Bill says it’s definitely worth researching the background and the history of a builder before signing up with them.
“Before they commence construction for a job, every builder must provide a home warranty insurance certificate which is in place in case the builder gets into financial difficulties. The insurer would then take over the completion of the home so it’s minimising the risk and making sure there’s a quality builder with a good track record.”
Bill says a customer’s primary contact during construction is their site supervisor, while administrative queries would be directed to the builder’s head office.
As a bonus for Eden Brae customers, the company can install a Buildwatch camera on the construction site so customers can see where the build is up to.
“Once the house is locked up we relocate that camera internally so you can monitor the progress of the construction internally as well,” Bill says.