CONSTRUCTION AWARENESS

How Some Builder's Rip Off Their Clients

There are numerous ways certain builder's can rip off their clients. Some things we strongly feel that all owners should be aware of are listed below ;

• PC ALLOWANCES. This is an allowance for an item that cannot be costed exactly. For example Kitchen cupboards, supply of tiles or bathroom fittings, site works, etc. Some PC allowances may be unavoidable but a tender should NOT have PC allowances for basic items such as frames & trusses, windows, roofing and alike. The best quotes have little or no PC allowances so that costs cannot increase during construction and will closely remain within the desired budget.
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• UNREALISTIC PC ALLOWANCES. If a PC is to be included it should be a realistic figure. There may need to be an element of trust between the owner & builder in estimating this amount of PC allowance.
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• UNQUOTED VARIATIONS. Most variations can be quoted for before any work is completed. However if in the rare case it cannot be quoted (eg replacement of termite damaged timber) the variation needs to be proved by supplying a copy of any material purchase invoices to the owner plus a charge for labour at an agreed rate and a builder percentage for overheads and profit
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• CONCRETE PIERING. Any concrete piering should be completed at an agreed rate. The owner should inspect the amount of pier holes completed to ensure they have been charged for the correct amount of piering completed. The builder is the only person who usually keeps a record of the amount of concrete piering that has been actually completed on site. The engineer or council does not usually record the depth of pier holes drilled on site. We strongly recommend that the owners attend the site while measuring the depth of piers. Most bigger housing companies will not allow you to be on site.
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• ROCK EXCAVATION. This can be expensive and should be completed at an agreed rate of charges of machine hire, float charges, truck hire, tip fee's that might be required.
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• GST. This can be double charged. Owners should ensure any invoices clearly state whether GST is included or not. The builder can easily double charge for GST on the sub-contractors invoice and then again on his invoice to the owner if it is not clearly checked.
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• LABOUR RATES. These should be fair and reasonable. It is common for many builders to include excessively hire labour rates for any extra work that may be required. All labour rates would be clearly stated in the building contract or tender  so that the owner knows exactly what labour rates will be charged for if required.
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• EXLCUSIONS. Builders can make more money by excluding an item rather than completing a variation by not passing on the full amount of any excluded item in the contract to the owner when an item is deleted. If the owner is thinking of excluding an item during construction they should ask the builder to include what the credit amount would be in the contract prior to contract signing.
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• TENDER VALIDITY. All good builders will state in their tender how long their tender is valid for before they can revise it for industry rise and fall. This is usually between 30 and 90 days. WRITTEN INCLUSIONS. Owners should insist that all of their requirements are included in the tender in writing. If it is not written in the tender the owner will have no legal right to claim for the inclusion. The tender should be attached to the contract and signed by both parties with a copy for each party supplied.
  The most important element will be communication & trust between both parties. The above are only a few of the ways builders can rip off their clients. Owners should check the builders experience, check references and evaluate the builder not only on price but also on professionalism.
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• HOUSE SQUARES. House squares should not be calculated including the eaves areas. A lot of builders, mainly project home builders include the eaves area in the house squares to make the size of the house look more appealing - automatically people assume that there house is a lot bigger than it really is. The eave areas should not be included in the house squares or square meters and should not be charged for as the cost of this area should  already be included in the square meter rate excluding the eaves calculation.