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KHB-Zine, Issue #009: Contracts
September 02, 2017
Welcome to the September edition of KHB Ezine.
Early PS: if you are reading this on a phone, turn it sideways to enable landscape view, it's easier to read.
For potential owner builders, contracts and warranties can look daunting. Here is an outline of what to expect as an OB buying a kit home to build themselves. No legal advice is offered here.
Kit home supply contract
Once you look closely at the layout, move or add a wall, add or enlarge a window, raise the ceiling, add a sliding door, add bushfire provisions etc, the price will alter significantly. This is not the providers fault as they have to start somewhere. So for the kit alone I would add 20% to the advertised prce for your alterations. This will eventually be 'the finalised quote' which should also list the agreed inclusions: insulation, cladding, roofing, linings ect, and is then yours to
accept or not.
My big alterations were thicker glass in the windows (for bushfire provision), more windows and an extra slider, a higher ceiling, steel screens and transport. This changed the price from $62000 to $78000.
A contract to provide a kit is a lot more basic compared to a contract to build a home. There are still three pages of 'legalese' which needs to be read and understood. Most of it outlines dispute management rising from quality of the product, late or non payment, timeliness of deliveries, substitutions, ammendments, what the supplier is not responsible for eg site prep or site construction, what the purchaser is responsible for eg immediate inspection and approval of the delivered product. If it is not readable, get a solitictor to assist.
The contract will also spell out the terms of payment, usually broken into 4 payments:
2. Frame delivery
The contract should also spell out owner builder assistance over and above any manuals supplied.
A trade quote often doubles as a contract in this day and age as properly written quotes contain the following:
Many building jobs require a certification to be furnished on completion or supply and need to be handed to the building insector. Some of these need to be part of a trade work contract. My last build required certification for:
Warranties on trade work must be inserted into the signed contract and be explicit. Most reputable trade workers will return to fix a fault these days due to the advent of social media! A twelve month warranty is pretty good for faulty workmanship or failures. Of course all PC items such as Dishwashers, exhaust hoods, stoves etc must be redeemed from the item seller.
Waiver: This is a summary from my experience. I am not a contracts solicitor so this is not advice. Do your own research and seek legal advice.
If you are buying a kit from a builder and getting them to build it, you will need a much more substantial contract. HERE is a site that outlines some important contract provisions.
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Kit home groundwork: 5 Crucial Steps.
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