This item on the TV3/Newshub bulletin last night dealt with the problems that a couple building a new house had with their building contractor who kept wanting more money to finish the house. Although there was prima facie a fixed priced agreement at the outset, the one-page contract had a line which in effect said “if the project takes longer than expected, there will be extra charges.” Needless to say, that happened, and the total extra demanded increased the original price by about 50% — the last $55,000 demand was refused and the builder walked off the job.
This aspect is sure to be important for the thousands of people building new houses in the steadily growing number of Waikanae subdivisions.
The line mentioned above ought to be a red flag that should have been rejected, and according to the HBOANZ guy who was interviewed on the item, these types of contract are usually provided by the contractor and for the contractor’s benefit.
About 5 years ago we were organising a kitchen reno with a firm in Paraparaumu involving a budget of about $36,000; although we had no reason to doubt the firm’s competence and reliability, its sloppy and poorly worded contract was unacceptable and we had to insist, among other things, that it be a lot more specific about what was included and what was not.
The Ministry of Business, Innovation and Employment (MBIE) has some useful info on its website here