New-build homes - constructing the right contract
Issue Date: - Thursday, 5 November 2009
With the First Home Owners Boost coming to an end in December, plenty of people are signing up for house and land packages to get the full $14,000 grant. Consumer Protection is warning that with eagerness there also needs to be caution as there are many details within building contracts that consumers need to understand. For First Home Owners with little experience in this field, getting good advice is essential.
Consumer Protection has received some calls from home-buyers who’ve agreed on a price to build a new house, only to be asked to pay more along the way for extras which they thought were included.
Commissioner for Consumer Protection Anne Driscoll advises those planning to build a house to make sure that what they see in the display home and what they intend to have built are clearly understood and included in the building contract.
“Remember that the salesperson is not who the building contract is with, so any discussions they have about what is or is not included in the home needs to be documented in the contract with the builder before it is signed,” Ms Driscoll said.
“It is also important to realise some aspects of the display home will not be included in the property being purchased. Flash décor, manicured gardens and subtle finishing changes can easily influence a consumer’s perception of what their finished house will look like.”
The most common contract used in the home building industry is what is commonly called a ‘Lump Sum’ contract. Paperwork will include specifications and detailed plans explaining exactly what the buyer is entitled to – which tiles, bricks, windows, taps, wall finishes, etc.
Ms Driscoll added: “These documents should be taken away and read thoroughly before the contract is signed. Simple things like consideration of where power points need to be for items like a TV and also sun orientation so that the alfresco area is facing in the right direction can have enormous long term implications if we do not get them right.
“In the case of any uncertainty over the drawings we recommend seeking advice from an independent advisory service. The key thing is that everything expected must be documented in the contract and specifications. If in doubt ask for this to be explained and pointed out.”
For anyone planning to sign up for a house and land package or building a new home there is more information at www.commerce.wa.gov.au - consumers should click into the Real Estate section and choose Home Building.
END OF RELEASE
Media Contact: Alina Cavanagh
9282 0679 or 0423-846397
alina.cavanagh@commerce.wa.gov.au