Hi, wondering if someone can provide advice on if companies are allowed to...

Hi, It will all depend on what is written in your contract. Majority of contracts used are heavily in favour of the builder so if you look over it and are still not sure I would seek advice from your lawyer as this may not be the only instance of a variation you come across especially if the problem stemmed from a design flaw in the plans and the change was not of your making.

Hi LM, A couple of extra comments in addition to what MJ has said. (Once again we’re talking about the importance of the Contract.) Might be worth checking, but I don’t think NZ consumer law or building regs say anything about obligations for providing a breakdown for quotes. My copy of the MB Contract 2011 just says changes to the Contract Price have to be agreed in writing. Of course a reasonable builder will provide some kind of breakdown, but it seems you can’t insist on it. If you really think it’s unreasonable, I guess you could go back to MJs previous advice about getting a QS or other expert to review it. But this may depend on how urgently the change is required, to keep the job moving (see ‘delays’ below). You’ve mentioned ‘a problem on the plans’, which I assume means the plans were produced by your own designer, and not the builder himself, which might change the situation. But at the risk of appearing to sympathise with the builder, I have to say that life can get very difficult for a builder when the Client asks for design variations during the build. The MB contract allows the builder to charge a 5% processing fee. But in some cases that may be nothing like enough to cover the actual hassle caused by the change. Even what appears to be a small amount of work can have a knock-on effect to the whole programme. It may take time to order materials, or delay a particular subbie who then goes off Site, and can’t immediately come back. Delays to the whole job generally justify a builder in charging overhead costs, including head office staff and rent. All these other costs may be more than the cost of the variation itself. Sometimes variations have to be ordered mid-build. But it’s another reminder that they should be avoided if possible. Starting with a set of plans, and thinking you can change them, or work out the problems as the build proceeds, usually costs far more than you expect. Especially if you have the bad luck to have gone with a builder who sees variations as an ideal way to increase his profit margin. There are even some cynical people who suggest that there are builders who know that most of their clients can’t resist the temptation to make a few changes.

Hi LM I’m having variations and cost overruns coming and they are not breaking down details. I’m not sure what the reason is for not being transparent, all I can think is that they are charging a ridiculous amount of margin and don’t want to disclose it. Although the contract specifies a %age margin there is really no way to tell. If they are reputable honest builders I would expect that they should fully transparent with a breakdown. Otherwise they are just lazy and overestimate the price hoping that it should cover the job.