In the last few weeks we’ve look at accepting your quote and singing your contract. Once your contract has been signed, it is time to move into the deposit stage and once paid and cleared in the bank your builder will begin on your building process. This is where the excitement begins, but there are a few things you should know first.
Deposit Stage – From Quote To Completion
During the contract period, your builder will refer to ‘stages’ of your job. In short this is the period covered by a ‘draw’ or payment as outlined in your contract. So for example, you may have the following, deposit stage, base stage, frame stage etc. These are the stage markers for your build and are defined by the payment stage that matches them otherwise known as the ‘draw’. This is simply the time at which your builder will deliver an invoice to ‘draw’ on the contract total. All of which is predetermined in the contract you have signed.
A word on deposits, in Queensland, for new home and renovation/additions contracts under $20k your builder is only allowed to ask for no more than 10% of the contract price. For contracts over $20K your builder is allowed to ask for no more than 5% of the contract price. This does differ a little from state to state, however it is important that you are well informed about how much you are obliged to pay, and not pay any more.
What Does It Cover
There are several stages in your job in which your builder will be significantly out of pocket while completing the stage until the next draw. The deposit stage is one of those, as the small deposit covers all of the statutory costs, and fees incurred to get the job completed up until the base stage.
This includes the following: Council fees, insurances, levies and associated costs. Furthermore if there is anything left of the deposit, the builder may use this amount to start the preparation of your job site, for example clearing of the block, laying the slab, or demolition for a renovation or extension.
Invoices are only to be issued after the stage has been completed, stage will have its inclusions outlined within your contract and it is important to check that all of these have been completed prior to paying your invoice. Your builder should facilitate a site inspection if you deem it to be necessary. Any variations made during this period will be added to this stage claim.
Once you are satisfied, move quickly to ensure that payment is processes swiftly to minimise any disruption to the job flow. Delays in payment can have a large knock on effect that can push your completion date back significantly, and this is one of those occasions in which the delay will be attributed to the client and will exclude you from compensation.
You are now well on your way to having your job completed. Next week we will discuss selections and how they can impact your build.
Have you built or renovated? What did you enjoy about the process?