Further to this if you are holding back money you need to understand the...

Hi, I was hoping if someone could tell me how section 16 of the registered master builder contract works. The cost fluctuations part. Can a builder use this clause for justification of project blow out? For example, if the builder had been quoted 9k to get the electrical work done but was charged 11k. Does that mean the Ower is liable for the extra 2k? Thanks in advance 🙂

Hi Steve, Can you clarify which Edition and Clause of the RMB Contract you’re referring to. Because in the 2015 Ed (which I think is the latest) Cost Fluctuations is Clause 64. What do you mean by Section 16?

Hi chris, it’s on page 10 bullet point 16 on the rbc1 2016 additions and alterations. It’s also on bullet point 5 page 10 of the rbc1 2016 new build contract. Our build was over a 3 month period and builder trying to use this clause to justify 20k increase in price.

Hi Steve, Sorry to pursue this, but the latest version of the Registered Master Builder’s contract I can find is 2015. And if the one you’re referring to is RMB then your 2016 version must be very different to the 2015 version. But anyway, based on the Cost Fluctuations clause (Clause 64) of the 2015 version my personal view on whether an increase of $2K on an original figure of $9K for electrical work could depend on a several things: -Was the $9K an actual quote based on a detailed scheme layout, or just a provisional sum, with the intention that the scheme details be decided later? -If the latter, did you ask for things that pushed the price up? -If the former, how far in advance of actually doing the work were the scheme and quote prepared? Although the construction only took 3 months, maybe the quote was a lot earlier. I think most of these quotes are only valid for about 30 days. -These days I think $9K would only get a very basic electrical system for a fairly small house. So if you finally got something satisfactory for $11K maybe that’s not too bad.

Thanks for the reply. If it matters the construction started the day we signed the contract. The builder should have put a contingency in place for slight increases in his prices? He did not provide any provisional or prime sum costs even though we kept asking and asking. I know we shouldn’t have used him. We didn’t add anything extra to the electrical work. The whole project has gone over by about 30k with a couple of variations which we didn’t know about or agree to some of them. Do all variations have to be signed that yes we would like to proceed?