Many residential builders offer fixed price contracts to build a residential dwelling. However, some purchasers do not realise that the fixed price is only offered up to a certain date. Many builders include a clause in their tender that the fixed price is provided up to a certain date and if construction has not commenced by such time, then the builder can increase the fixed price or charge additional costs.
Further, many residential builders allocate the date of expiry of the fixed price before the registration sunset date for the land. This means that if the expiry date is for example 30 December 2023, but the land has not registered by this date and the sunset date (date registration is required to be completed by) is 30 June 2024, then the builder has the discretion to increase the fixed building price.
The standard HIA building contracts do not provide the purchaser with a right to terminate the building contract if the builder increases the fixed price. The standard HIA building contracts also do not provide the purchaser with a right to terminate the building contract if they rescind or terminate their contract to purchase the land on which the dwelling is to be built.
If you are wanting to enter into a building contract before your land is registered, please contact Watson Law so we can negotiate on your behalf to include clauses in the tender and/or building contract to ensure you are protected if the land is not registered by the expiry of a fixed price.