2019-02-01_Inside_Out

Inside Out / 115

1

Variations

during the reno

You’ve negotiated a fixed-price contract

with the builder, but that doesn’t account

for unforeseen costs during the build.

“It’s very difficult for an architect to

document everything, including things

you don’t necessarily see on a set of plans

or in a couple of site visits,” says builder

Bill Clifton, director of Robert Plumb

Build (robertplumbbuild.com.au). “It’s

only when you start taking plasterboard

off walls or pulling up floors that you can

discover termite damage or damp – and

these turn into what are called variations.”

So, even with a fixed-price contract,

you may have variation costs on top, plus

the builder’s margin. An architect will try

to make allowances for areas that may be

hard to quantify – and you should quiz

the builder about issues that may crop up,

factoring in these at the start and ensuring

you have a reasonable contingency buffer.

It’s much better to be informed. “You

hear horror stories of builders not even

mentioning variations until the end, so you

think you’re all paid up – and suddenly

there’s another $80k to pay!” says Bill.

2

Council fees,

insurance and

everything in between

On a big renovation, hidden costs external

to the actual build include everything

from DA approvals to footpath deposits.

“Then there are insurances to pay for,

and engineers,” says Scott. “Council fees,

which are based on the cost of the job,

can be thousands. Dilapidation reports

must be done at the beginning and the

end and can cost $1000 each.”

Construction certificate fees such as

the Long Service Levy and work zones

can also crop up. A work zone may need

to be organised with council if it’s not

possible to park on site or have an area for

pick-up and delivery of building materials.

This could add up to hundreds per week

or thousands over the duration of the

build (and it needs to be paid in advance

at six-monthly intervals).

“Then there are payments to protect

the footpath,” continues Scott. “For the

house I’m working on in Paddington in

Sydney, the footpath deposit is $26,500.

You get that back if the footpath isn’t

damaged, but these are all hidden costs

people don’t really understand until

they’ve got to pay them.”

3

Delays due to

disorganisation

This is a biggie because, on a building site,

time is money. “You want to have all your

documentation complete, all your fixtures,

fittings and finishes specified,” says Bill.

“So when the builder starts, he’s got clear

plans, clear direction and there’s nothing

slowing him down. You need to have all

that in order to make rapid decisions.

“If you have a build where one part

hasn’t been designed by the architect

yet, or the client hasn’t thought about

this bit, or decisions can’t be made for

a few weeks, the more it costs. My biggest

piece of advice if you’re renovating

would be to be organised!”

4

Not buying PC items

at trade prices

A hidden cost most people don’t really

understand is the 20 per cent margin

placed on prime cost (PC) items such as

fixtures, fittings and architectural joinery,

if these are handled by the builder.

“Things like lighting, carpets, tiles,

hand basins and tapware – everything

imaginable that you can buy for the home

• can be bought through the architect’s
  trade suppliers,” says Scott. “But if the
  builder buys all that for you, he’s going
  to put a mark-up on it.
  “You’ll save money if you buy direct
  via the architect’s trade suppliers, but you
  do need to negotiate with the builder for
  a cost to coordinate or project-manage the
  joiner, and accept and store the PC items.”

5

Not scrutinising the

contract or asking

the right questions

Builders’ quotes can vary significantly,

which means it’s important to read the

contract and the full bill of quantities so

you can see what’s been allowed for.

“Engaging your architect to review and

compare builders’ quotes is a great way of

ensuring that you’re comparing apples with

apples,” says Bill. “Having designed the

renovation, the architect is across the job

and can identify areas where the builder

may have over-allowed or under-allowed

for something, and help them identify

a particular trade that may be susceptible

to variations if the prices vary greatly.

“You should also speak to a couple

of architects the builder has worked for,

and some clients they’ve built a house for

in the previous 24 months. Ask how far

over-budget or under-budget it was, what

the experience was like and if the builder

has been good at coming back to fix

things since the job finished.”

6

Accommodation

and storage

Are you convinced it’ll be fine to live on

site during the build? Think again. You’ll

just delay aspects of the project, and on

most big renovations, it’s not possible due

to the noise, dust and lack of utilities.

“You have to factor in accommodation

costs and allow for a contingency beyond

the date of practical completion, as things

such as wet weather, subcontractor setbacks

and materials not turning up on time can

delay the work,” says Scott.

You’ll also want to allow for storage

costs for your furniture and belongings,

the cost to move out and/or move your

stuff to storage, and boarding costs for any

pets during the build.

“

”

You hear horror stories of builders not

even mentioning variations until the end,

so you think you’re all paid up – and suddenly

there’s another $80k to pay! BILL CLIFTON, BUILDER