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Seeking advice on tricky situation

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Hi all,

Encounter situation below and qould like advice on how to handle.

 

I have engage a contractor for Design and Build of a landed home and they brought in their architect with a engineer.

A initial quotation was provided and agreed upon, and design work started, and with a quotation signed. The site work did not start for quite a while. Then the brother of the director came along and said that it was under quoted and they can only fulfill it with a added VO of 270k, which we are not certain as it is too sudden. Then the dad came in to say he is confident of finishing it with a VO of 300k, and the brother decided not to get involved with the company.

Hence we still go ahead with them. The building went quite fast, but slowed down in Sep to Nov.

He requested for payment of certain amount over a period, which we followed.

In Nov, we check if it is possible to move in by year end, and the dad promised that believe him and it will not be an issue and he said that if not completed in time, they will pay for the rental. I continuous check with him and he continue to promised it will be completed by year end. He started to request for payment beyond the 5% upon TOP and 5% after 6 months completion, which we pay some if that helps makes things easier.

Dec came, and during SP testing, it failed but but because of electricity,  but due to safety, SP cannot test, and the year end moving became impossible. Then the dad says that he do not want to be involved anymore as he has lost enough money and asked me to talk directly to the initial director, his son that started the discussion, and he mention that if we pay the balance without withholding any amount, they will be able to complete the work, and wanted me to pay direct to the sub con for transparency and so that they do not have to charge me gst.

Then as I spoke to the son more, I realised that the amount owe to the sub con is at least 200k more then what is still outstanding to the main con. Not only are we not able to claim back the additional rental cost, but seems like we will need to pay more than what is owe to them.

They are still working on helping to complete the work, but it is difficult to talk to them on this issue and what to pay become fuzzy, while the sub con invoice keep getting directed to us, which we are holding on, as things are unclear.

Like to seek advice here on how best to move forward. Thank you.

 

 

 

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why did the SP testing fail? Why is SP testing cannot be done again due to safety? What kind of safety issues? Has these safety issues been rectified?

DO NOT pay the contractor anymore especially directly to their sub-contractors. Any outstanding amounts between the builder and their sub-contractor is between them and you shouldn't be involved. Return the invoices from the sub-contractors back to the builder and do not get involved between their issues. I also hope you have receipts from the builder for all the payments you have made to them thus far. No GST is just a myth since the sub-contractor's invoice will already have the GST factored in as their supplies is likely purchased from a GST registered company. Just that the amount will be lower since the mark up from the builder is excluded. But again I reiterate, DO NOT pay the sub-contractors directly.

Did your contract with the builder come with a LD clause? If yes, you can possible use this on them to claw back some of your rental cost due to their delay.

How much work is outstanding before TOP can be applied for? Do you have the direct contact of their architect? Cos the architect will need to submit for the TOP application and others as well. So this is just in case you need to get the architect to continue to see through the project should the builder decide to abandon the project.

Important thing now is whether work is still being done on site so make some effort to go to the site everyday to check for progress. If there's still signs of work being done then maybe still not that bad. I'm not sure how fast the builder promised you the project can be completed but delays seems quite common nowadays likely due to lack of workers. One house near mine has been undergoing A&A works under a famous ID company and it's been 18 months since work started and work isn't finished yet as of today.

 

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Thanks, Snoozee.  There is safety issue, as the lift shaft is not completed then, and the staircase railing is not done. Both are completed now and the SP testing has just been cleared.

They are still carrying the work, but seems to want to push the bills to us, and using delay of TOP as a way to get us foot all the bill.

Do we have the right to bring in another contractor to finish up all the work?

 

 

 

 

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As mentioned, don’t pay the subcontractors directly. You are not your builder’s bank account. if subcontractors send bill to you, tell them to send back to the builder instead. Any payment you made should be based on progress claims by the builder and supported by evidence of work done on site. 
 

changing a builder is not as straightforward as you changing a renovation contractor. There are items which the builder need to certify and submit to authorities and a new builder may not want to take this risk at this late stage of works. Moreover you need the architect and PE to submit stuff to authorities as well and you are kind of stuck since these two consultants are under the builder’s payroll. 
 

I would suggest you take a look at the contract signed between you and your builder. Seek legal advice if needed on what you can compel the builder to finish and any financial penalties you can claw back from the builder. Unfortunately since this is a design and build project, I would think the contact will likely be skewed towards the builder. I hope you have also keep all the documentation of payments and receipts as you may need them to support your case. 

 

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