David
Spoiler Alert: If you believe a Master Builder is actually giving you a “fixed price contract”, you are probably wrong.
We have spent the last 2 months “dating” A1 Homes. We found a plan that could work, with a few revisions, and agreed specs down to the taps and window latches. We have built before, so know exactly what we want, and they provided a fixed price estimate (crucially, not a quote) to our specs. It seemed like a fair price so we were keen to continue.
They then said we would need to spend $3,000 on drawings and colour consultants before they could give us an actual fixed price quote. That is a lot of money – we have previously had quotes done on concept drawings that cost us $1,500 and $1,955 respectively.
Eventually we came round to the idea, but we asked to see the contract they intended to use before we forked over $3,000. That’s when it got hairy.
A1 presented us with a “standard” Registered Master Builders Association contract. The problem is that Clause 46 of the contract (2018 edition) specifically allows the builder to charge us more if ANY aspect of the build turns out to be pricier than the fixed price quote. i.e. it directly contradicts the claim of a fixed price quote.
Further, Clause 101 of the contract (which has grown by about 60 clauses since we last built, practically all of them skewed toward the builder), specifically allows for a situation where A1 is building for Mrs Smith down the road and if that gets delayed, they can delay your start and end date. And with Clause 46 locking in their ability to on-charge any costs that might arise because prices rose since they gave you a not-fixed fixed price quote, they’ve ensured whatever their project management skills, you will pick up the tab. Oh and by the way, they have your deposit of 5% while they retain the right to delay indefinitely while they finish Mrs Smith’s project.
We queried these 2 clauses and a couple of others. A1’s response was simply that they don’t ever change clauses. They had no answer for my question of how they could claim they offered a fixed price contract when it wasn’t. They said they hadn’t charged more than the fixed price on the 2 years they had used the contract, which frankly didn’t give me enough peace of mind to hand them $500K on the back of a contract that still says they can crank up the price at any time.
I spoke to a Director of Master Build Services who confirmed there was nothing stopping them deleting irrelevant clauses in the contract; A1 was simply choosing not to.
In the end, we were not willing to risk our money on a “no surprises guarantee” that isn’t any guarantee at all and could potentially hold a very nasty surprise. We suggest you give this a lot of thought and question whoever you build with if they have the same wide-open clauses in the contract.