Hi,

I have decided to terminate the existing builder/contractor for my house reconstruction. Reason is it took him almost 4 months just to design and only starts submission on 5th month. To cut the story short, it is my first time doing this and I signed a contract which was prepared by him and thus favoured him. I paid deposit of $100k and he refused to pay me back the balance, even though so far only URA written permission is granted and PE hasn't even submitted drawing to BCA at this stage. He gave me a list of cost which I know he inflated a lot to justify the refusal to return deposit.

I gave him a termination letter but he wants me to simplify it and don't look too seriously legal. I was told that I need his signature on the letter to agree to cease to be the builder.

Anyone can advise me on this? He is trying to drag his feet to sign back and I need to appoint a new builder.

I had complete a design & build contract for a 2 storey semi d with a basement & attic back in 2013.

Both the owner & myself agreed on progressive payment with retention (10% each payment up to maximum of 5% of total contract) on each payment. This was proposed by me to the owner to ensure fairness. We did not use the SIA (Singapore Institute of Architects) standard form of contract. but the method adopt was based on that form of contract.

From contract confirmation to commencement it took 8 months & the progressive claim for this period was about $53K (payment for Professional Engineer, Soil Investigation, Land Surveyor, Pre-Condition Photo Survey, Electrical & Water Preparation, MOM Factory Permit, & some preliminary site preparations.)

As there were not deposit requested by me, the owner agreed that I report progressively the works to be done on the following month & he will pay in advance for me to carry out the reported works.

The job was successfully completed in September 2015.

This is the problem with Design and Build companies.   Below the work starts, you will have to pay a deposit up front, for your case, $100k.  Many pay more than $100k.

Just to clarify, I'm also a design & build contractor. But at no point in time did I request the owner for deposit.

What I did was as following example:

Estimate of Works done in Jan 2013: $10K. Hence $10K will be paid by owner at beginning of that month (ie: owner to finance for job done in Jan 2013)

After the $10K worth of progressive job completes, the cycle repeats again.

But in every payment, to be fair to the owner, the owner will retain 10% of the current claim progressively, up to a total limit of 5% of the contract.

 

Example:

Contract Sum: $100,000.00

Max Retention: $5,000.00

 

1st Month:

Claim: $10,000.00

Less 10%: $1,000.00

Payment: $9,000.00

 

2nd Month:

Claim: $50,000.00

Less 10%: $5,000.00

Less Previous Payment: $9,000.00

Payment: $36,000.00

 

Final Payment (On Completion): $100,000.00

Less Max 5% $5,000.00

Less Previous Payment: $45,000.00

Payment: $50,000.00

 

After Maintenance Period (For Landed Residential usually 1 year from date of completion or T O P)

Payment: $5,000.00