Contract Conum | Roger Ramsey

As if they weren’t complicated and (sometimes) confusing enough by themselves, everyone is trying to convince you that their proposal is the best – talk about headache material!

Since we have had years working in the building industry, we know that most people are primarily concerned with these three things:

Value for money. Completion of build on time. No nasty or expensive surprises along the way or at the end of the project.

So, to help you navigate through the sea of competing and contradicting contracts, we have put together our top five tips for navigating building contracts.

1. “Understand what a Provisional Sum is.”
A provisional sum is the part of the quote where the builder has estimated how much a piece of the build may cost, but it may increase or decrease as the project progresses.

Let’s take the kitchen for example; if the builder is trying to win your business by providing the cheapest quote, he may provide you with a provisional sum for a kitchen fit out that uses the cheapest kitchen appliances.

When you come to actually installing the kitchen, any changes (like an induction cooktop) will incur a higher cost, because the estimate he gave you was too low to achieve your desired outcome.

It’s essential to find a builder who takes the time to understand what your financial priorities are and then provides you with a real, honest quote.

2. “When examining multiple quotes, query any large variances in price.”
Most building materials and basic building costs are the same, so when you come across two quotes for the same job that have a large difference in price, ask why!

The devil is in the details and just because something is cheaper, does not automatically make it better.

Consider things like the company’s guarantee, whether you’re happy to pay less upfront but risk not having your build completed on time?

3. “Speak with people who have used the builder you are considering.”
Just like interviewing potential employees for a business, speaking with references who have previously used the builders you are considering is a must.

Don’t just take the references that they give you, ask around locally and use avenues like social media to gather information on how efficient, respectful and honest the builder was with their past clients.

4. “Always ask for a contract for any building project over the value of $30,000.”
It’s the law to have a contract for any building project over the value of thirty thousand dollars. Unfortunately that doesn't mean everyone will offer you one right away - shocking, we know!

Knowing your rights and making sure that you are covered against any damages or disappointments at the end of the project is of paramount importance!

5. “Understand the difference between a Fixed Price vs. Estimate Quote”
In most cases, even if a fixed price quote is higher than the estimate, you would do better to take the fixed price.

Estimates can change as your build proceeds, but a fixed price means that the builder has listened to all of your wants and needs and taken the time to generate a quote based on a realistic idea of your expectations and the plans provided.