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Building Contract Signed

Went and saw the salesman in his office today to sign the building contract. First piece of good news was that the house plan was given the preliminary go ahead from the local council despite the problems I discussed yesterday. Of course there is a chance that they may change their mind and we may end up having to alter the plan to comply with some bureaucratic requirement. This could potentially mean more costs.

The building contract we signed was the standard contract offered by the Housing Industry Association here in Australia. Using the standard contract, written in plain English makes the whole process a lot easier to understand. The salesman was great and took us through every section of the contract and explained its purpose and potential effects on us. Key things that came out of it are:

  • The contract includes a 48 hour cooling off period.

  • The payment schedule was laid out. It's in 5 equal installments with the first payment due after the concrete foundations are paid. Interestingly the contract includes a provision to allow the last payment to be held over until the client is happy with the home. 'Happy' (according to the contract) means that the standard of the new home is at least that of the display homes presented by the builder.

  • Fairmont Homes seems to offer a fixed price contract, and discards the section of the contract that allows for changes in contract price and the builders costs change. The allowable change was something like 2% per month of the contract.

  • The Housing Industry Association outlines the mediation process between the builder and client clearly in the contract. The HIA actually mediates this process themselves and provides both parties with advice if a fee is paid (presumably to stop trivial complaints).

  • The contract does include some time lines but there doesn't appear to be any way of enforcing them and no mention is made of time taken to get the concrete foundations down, just time to build after this happens. 130 working days after foundations going down is the expected time period.

  • The builder warrants the home for a period of six months. The salesman tried to tell us this was not transferrable to a new owner but this sounds like it would contravene Australian consumer laws so I'll need to look into this.

    • The whole process took a bit over an hour and included some preliminary selections for the house such as the shape of internal archways. It would have taken longer but the salesman's printer ran out of ink and some of the paperwork was not signed. This will be mailed to us in the next week.

    In spite of not signing some paperwork with the main contract signed and the deposit paid the actual process of building can start. This will include drawing up a site plan, conducting soil tests and writing engineering reports, and submitting the plans to council for development and building approval. We've been told 3-4 months from today we can expect the foundations to go down. Here's hoping it's only that long!

    Posted by on October 5, 2006 10:53 AM |

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    Comments

    Hi there - I stumbled upon you through Blogwise :)
    We are in the process of building a house too. Isn't it exciting, and just a little nerve wracking at the same time! We're in SYdney, and just a few weeks ahaead of you I think...
    Best wishes and good luck :)

    Posted by: DaFFy | July 27, 2005 10:44 AM

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    Thanks Daffy. Things have started happening in the last few days so we're a lot happier now. Good luck with your efforts!

    Posted by: Mark | July 27, 2005 11:06 AM

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    What does spec home mean - Spec what is the meaning of that.. Please send as soon as possible...msfrmthoma@aol.com

    Posted by: Mary Ann Freeman Thomas | July 30, 2005 09:11 AM

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