Hi
We brought a house and land package in Sydney. The land was registered and we signed the contract for the building for a value of $410k. The construction started last year in November (2021). The invoices were raised and the payments have gone through the bank as well. The construction was delayed due to COVID but now we are in the brick & roof stages for which the invoice is also raised. Two days earlier the builder has sent an email stating that there is going to be an increase in the contract price by 10% which means $40k increase.
My question is, is this possible? I understand that there is price increase off late but for us the building materials were all ordered last year the invoices raised and paid.
We did not go for Fixed price contract. But with that said there is a clause in the contract for price rise and fall as well. The contract favours the builders a lot and if we go and handle this legally it is going to be a long process. We are already paying the mortgage and also the rent. Its too much for us to handle at the present moment.
Can you please pour in your insights on this. Thanks
Even if you did sign a 'fixed' price contract, the price can still go up!
Its a con job indeed to call them fixed price contact, but in your case, you didn't sign one, so what does your contract say?
Contract favour those who write it.
You're not alone, builders ramping up costs everywhere on people with contacts, the normal is 10-20%.