Are you thinking of building house? With increased global demand for building products affecting suppliers' ability to service the market, building costs have skyrocketed in the past year.
While in the past it was much easier to enter into a “fixed-price contract” with a builder, with ever-increasing prices for materials sometimes this is not a truly fixed price. It is important that you understand what the contract provides for and where the builder has the right to increase the fixed price. For example, if the provisional cost of your kitchen was $30,000.00 but the price of tapware increased then those increases would need to be passed on to you. This is especially important if you require bank lending as increases could affect your ability to finance the build if you have a limit on funds.
We recommend that before entering into any contract, you do your due diligence first.
You need to know what rights does the Builder have to vary the Plans and the materials used and do they have to get your consent before doing so?
Is there a Defect Warranty Period and what does this cover? It is important that you are aware of what is considered a defect by the Builder, the correct procedure to notify them and how long they have to rectify any defects.
You will need to ensure you can obtain evidence that insurance has been taken out to protect the works.
Understand what the process is if you want to request a variation and how this will be costed?
These are just a few things that demonstrate how important it is to review your building contract carefully before signing.