Tips For Home Owners
How Builder's Rip Off Their Clients
There are numerous ways builder's can rip off their clients. Some things owners should be aware of are listed below ;
- PC ALLOWANCES. “PC” Allowance is “PRIME COST”. This is an allowance made by the builder in his construction tender as he is not certain of the selection of certain building materials and therefore does not know the exact cost for supply only of this item. The builder has already allowed labour to install the item as a fixed price included in the tender price. Typically this an allowance includes items such as kitchen cooking appliances, bathroom wall & floor tiles, bathroom fittings).
- PS ALLOWANCES. PS” Allowance is “PROVISIONAL SUM”. This is an allowance made by the builder in his construction tender as he is not certain of the amount of labour & materials of certain construction tasks and therefore does not know the exact cost for supply of materials & labour to complete this task. Typically this an allowance includes items such as siteworks, demolition, concrete peering, kitchen cupboard joinery, painting). Sometimes this item is impossible to calculate the exact cost at the tender stage (e.g. concrete piering).
- HOW THEY WORK. The way PC & PS allowances work in a contract is that the owner is charged the difference between the allowance and the actual final cost. If the allowance is not spent then the owner receives a credit for the difference. If the actual cost exceeds the allowance then the owner is charged the difference between the allowance and the actual cost, plus an agreed percentage for builders margin to cover his overheads & profit
- DELETING AN ALLOWANCE. The owner also has the option to delete the allowance totally from the contract and receive a credit for the full amount. However the owner then takes on the full responsibility for the supply of the item or for the tasks to be completed. This means the owner is responsible for the insurance of supply of any item (e.g. theft, damage etc) and quality o the installation of the item and any delay costs
- MINIMISE PC & PS ALLOWANCES. The best tenders have the least amount of PC allowances. Its best to make as many selections as possible before the contract is signed and construction work commences. This can include selecting all tiles, bathroom fittings, kitchen cooking appliances. Get quotes for kitchen joinery & painting if possible. This will minimise delays and possible budget overruns.
- UNREALISTIC PC ALLOWANCES. If a PC or PS must be included in the contract it should be a realistic figure as close as possible to the final cost. Better to over estimate the allowance than under estimate it. If
- UNQUOTED VARIATIONS. Most variations can be quoted for before any work is completed. However if in the rare case it cannot be quoted (eg replacement of termite damaged timber) the variation needs to be proved by supplying a copy of any material purchase invoices to the owner plus a charge for labour at an agreed rate and a builder percentage for overheads and profit
- GST. This can be double charged if not correctly listed in the tender. Its would be very clearly noted whether the allowance includes or excludes GST. Owners should be given a copy of all invoices for material supply and/or sub-contractor quotes and ensure any invoices clearly state whether GST is included or not. The builder can easily double charge for GST on the sub-contractors invoice and then again on his invoice to the owner if this is not clearly checked.
- LABOUR RATES. These should be fair and reasonable. It is common for many builders to include excessively hire labour rates for any extra work that may be required. All labour rates would be clearly stated in the building contract so that the owner knows exactly what labour rates will be charged for.
- EXCLUSIONS. Builders can make more money by excluding an item rather than completing a variation by not passing on the full amount of any excluded item in the contract to the owner when an item is deleted. If the owner is thinking of excluding an item during construction they should ask the builder to include what the credit amount would be in the contract prior to contract signing.
- TENDER VALIDITY. All good builders will state in their tender how long their tender is valid for before they can revise it for industry rise and fall. This is usually between 30 and 90 days. Owners should not sign a contract until plans are passed by council and the builder is ready to start on-site immediately. Otherwise they run the risk of being charged for excessive price rises imposed by the builder. The owner can also ask for evidence from builder's suppliers proving they have actually incurred the price rise they are claiming for.
- WRITTEN INCLUSIONS. Owners should insist that all of there requirements are included in the tender in writing. If it is not written in the tender the owner will have no legal right to claim for the inclusion. The tender should be attached to the contract and every page signed by both parties with a copy for each party supplied. The most important element will be communication & trust between both parties. The above are only a few of the ways builders can rip off their clients. Owners should check the builders experience, check references and evaluate the builder not only on price but also on professionalism
Progress Claims - When you need to pay the builder
There are numerous ways that progress claims can be made. They can be made every 2 weeks for up to 95% of the value of the work however this method gives no incentive for the builder to perform and complete the work ASAP.
We prefer for progress claims to be made at set intervals when a construction stage is met.
Each schedule of progress claims is customised to the job but a common break-up of claims is as follows;
DEPOSIT Max 10% of the contract price
- CONCRETE POUR
- DELIVERY OF FRAMES & TRUSSES
- DELIVERY OF BRICKWORK
- FASCIA & GUTTER INSTALLED
- ROOF TILES / IRON DELIVERED
- PLUMBING & ELECTRICAL ROUGH-IN COMPLETED
- PLASTERBOARD / INTERNAL LINING DLEIVERED
- LOCK-UP (HOUSE IS SECURE)
- FIXOUT DELIVERED - DOORS & ARCHITRAVES
- CERAMIC TILING COMPLETED
- PAINTING COMPLETED
- PRACTICAL COMPLETION
Final payment is required at "Practical Completion". This is the stage when either the owner moves into the house / addition or when the house is complete, except for maintenance items.
Owners have 13 weeks after they move in to supply a maintenance list of minor items to be completed or rectified. O'Mara does not usually enforce this 13 week period and we often return to inspection any owner concerns may months after the work has been completed.
Each project O'Mara completes is totally different. A schedule of progress claims is prepared and included in every building contract to suit the project. Adjustments can be made to suit both parties when required.
INSURANCE - IS EVERYTHING COVERED
HOME WARRANTY INSURANCE (now called HOME BUILDING COMPENSATION FUND)
This insurance policy covers the owner against fault by the builder. If the builder dies, goes broke, retires or will not rectify faulty work then the insurance company will pay out the owner and pursue the builder. The builder must obtain the insurance policy directly. If the builder cannot obtain his own home owners warranty insurance policy it is probably because he is unlicensed, has had previous claims against him or has a limit on the amount of insurance that he can obtain. The better the builder is the more insurance he is able to obtain and the lower his premiums will be. Some builders are also limited to the type of work they can perform to what maximum value.
If a builder asks you to obtain the home owners warranty insurance policy directly beware. This puts all of the responsibilities on the owner and NOT the builder. The owner losses all rights to claim against the builder. We strongly recommend against this. The builder should always obtain the policy.
O'Mara has NEVER had a claim by any previous client against home owners' warranty insurance. We are rated by our insurer as a CLASS 1 builder. The highest rating available. We can obtain insurance usually within 48 hours.
This covers all new materials delivered to site and all new work is fully insured against theft, vandalism, fire and any other damage.
WORKERS COMPENSATION INSURANCE & SICKNESS / ACCIDENT INSURANCE
All people working on site need to have insurance to cover any accidents and injury on site
Companies need to have workers compensation insurance, sole traders only need to have sickness & accident insurance.
O'Mara is fully covered for this insurance at all times.
PUBLIC LIABILITY INSURANCE
This covers all anyone who enters the site and hurts themselves on site. It does not matter if they were allowed to enter the site or if they were trespassing. They still need to be covered. Councils usually require cover for up to $10,000,000.
O'Mara is fully covered for this insurance at all times.
HOME CONTENTS INSURANCE For HOME ADDITIONS & RENOVATIONS
O'Mara cannot cover your house "contents" with our standard construction insurance. You will need to check with your insurance company that your house contents is covered while renovating against theft or damage (eg water damage), some companies will cover you, others will not. If your current insurance company will not cover your contents while renovating you may need to take out a separate policy to cover your contents during construction. O'Mara cannot cover your contents as they are not our property.
EXISTING HOUSE "STRUCTURE" INSURANCE
You should also check to see if your current house insurance will cover your existing residence "STRUCTURE" during construction. This is to cover your existing home against damage during construction not caused by the builder. (Eg water damage, fire, electrical shorts, etc). If the builder caused the damage the builder is always liable for any damage. However if the damage is caused by a fault in the existing home and has nothing to do with the new work being completed then insurance is required to cover the existing house structure. Many insurance companies will not your existing house while building work is being completed. We can take out a special insurance cover for your existing residence "STRUCTURE" if your current insurance company will not. The cost of this policy can be obtained upon request
SITE CHECKLIST
When preparing a tender it is very important that the builder complete a very comprehensive checklist of the existing site and home condition. With every project we complete a comprehensive site inspection and record the condition of all items for the preparation of our construction tender. This makes our tender more accurate and reducing the amount of possible variations during construction.
Construction Glossary of Building Terms
AGGREGATE - The crushed stone or alternative substance contained in concrete.
AGREEMENT - A contract between two or more parties, either written or verbal.
ANT CAPPING - Termite barrier (shield), usually of galvanised iron, placed over piers and dwarf walls to control the entry of termites.
APEX - The highest point of a gable.
ARCH - A structure of wedged shaped blocks, or square blocks with wedge shaped joints, over an opening so disposed as to hold together when supported from the sides, and capable of carrying a load over the opening.
ARCH BAR - A structural member or beam carrying loads over an opening.
ARCHITECT - A person who is qualified to design buildings and supervise their construction.
ARCHITRAVE - A moulded section covering the joint between window and door frames and the wall lining.
ARRIS - A sharp corner formed by the join of two surfaces along a length of timber or brick.
AUSTRALIAN STANDARD - Approved standard for material, equipment, technique or procedure as set down by the Standards Association of Australia (SAA).
BAGGING - A masonry process in which thin mortar is applied to the face of the work with some coarse material.
BALUSTER - A small post used to support a hand-rail.
BALUSTRADE - A series of balusters supporting a hand-rail.
BARGE BOARD - The board covering the roof timbers on the gable or skillion end of a roof, fixed parallel to the roof slope.
BASEMENT - A room or rooms of a building, in part or wholly below ground level.
BATT - Any portion of a full brick.
BATTER - The slope of a wall of buttress built at an inclination to the vertical plane.
BAY WINDOW - A window of varying shapes, projecting outward from the wall of a building, forming a recess in a room.
BEARER - A member of floor framing, spanning piers and supporting joists.
BED JOINT - Horizontal joint in brickwork.
BENCHMARK (BM) - A fixed point of reference, the elevation of which is known and referred to during levelling operations.
BEVEL - An angle formed between two straight lines meeting at an angle other than 90°.
BIRDSMOUTH - A notch cut out of roof rafters to secure a firm bearing on top plates.
BORERS - Several species of insects and larvae that tunnel into timber.
BOWING - Deformation of timber at right angles to its face.
BRICK VENEER - Framed construction with an outside skin of brickwork tied to the frame.
CAMBER - A convexity upon an upper surface (eg beam, bridge, lintel).
CANTILEVER - A projecting beam supported at one end, or a large bracket for supporting a balcony or cornice. Two bracket like arms projecting toward each other from opposite piers or banks to form the span of a bridge making what is known as a cantilever bridge.
CAVITY WALL - A hollow wall, usually consisting of two brick walls erected 40 to 50mm apart and joined together with ties of metal.
CCA - Copper chrome arsenic salts used in preservation of timber.
CHAMFER - To take off the edge or arris of any material to a small depth at an angle of about 45°.
COARSE AGGREGATE - Hard stone, basalt, dolerite, cracked river gravel greater than 4.75mm in diameter - a component of concrete.
CONCRETE - Artificial rock of cement, sand and aggregate.
CONSTRUCTION JOINT - Joint which occurs because of the sequence of construction, unlike an expansion joint.
CONTOUR LINE - A line drawn on a site plan joining points of the same elevation.
CONTRACTOR - One who agrees by written agreement or contract to supply materials and perform certain types of work for a specified sum of money.
COUNTERSINK - A tapered recess, cut around a pilot hole for a screw, to receive the head of the screw.
COURSE - A single row or layer of bricks.
CRAZING - Fine cracks that may occur on plastered or rendered surface.
CROSS BRACE - Any crosspiece which diverts, transmits, or resists the pressure of a load.
CROSS CUTTING - Cutting timber across the grain.
CUL DE SAC - An access street with a blind end usually in the form of a turning space for vehicles.
CUPPING - Distorting of wide boards showing curvature across the grain causing the broad surface to be concave.
CURING - Treatment of concrete or cement rendering to facilitate hardening.
DAMP PROOF COURSE (DPC) - A barrier, usually physical, built into masonry to prevent moisture migrating up from the ground or down from above, eg chimneys, parapets.
DATUM - A predetermined level on a site from which all other levels are established.
DEAD LOAD - A permanent, inert load on a building or other structure due to the weight of its structural members and the fixed loads they carry, which impose definite stresses and strains upon the structure.
DIAGONAL BRACE - An oblique framing member securing wall framing lateral in vertical position.
DIMENSION - A measure of distance.
DISTRIBUTED LOAD - A load spread over a surface expressed in kilograms per square metre, or along a length of member expressed in kilograms per metre.
DOOR(s)
Flush - A smooth-faced door.
Hollow core - A door with infill of expanded cardboard.
Solid core - A door with blockboard fill
DOOR FRAME - A frame into which a door is fitted.
DOOR HEAD - The upper part of the frame of a door.
DOOR JAMBS - The two vertical members of a door frame.
DOOR LEAVES - In wide openings, a door may be made up into two or more individual sections or “leaves”, which are hingedtogether.
DOWEL - A wood or metal pin used to strengthen a joint by its insertion partly into each of the joined pieces.
DRESSED - Timber that has passed through a planing machine to produce smooth surfaces.
DUMPY LEVEL - An optical levelling instrument.
DWARF WALL - A brick wall from footing level or underside of floor framing.
EAVE - The lower part of a roof that overhangs the walls.
EFFLORESCENCE - A white or coloured powder sometimes formed on the surface of masonry by deposit of soluble salts.
ELEVATION - A geometrical drawing of a facade of a building.
END MATCHING - Milled tongue and groove on the ends of flooring boards.
ENGAGED COLUMNS (PIERS) - Columns or pilasters attached to a wall.
FASCIA - A board fixed horizontally to the lower ends of the rafters, to which guttering may be fixed. Also forms the outside board of a boxed eave.
FIBRE CEMENT - A product made of cellulose fibre, fillers, Portland cement and water.
FILLET - A small strip of wood or a flat moulding of small section.
FLASHING - A strip of impervious material used to prevent the ingress of water between two surfaces.
FLUSH JOINT - To place two adjacent surfaces together in the same plane. To form an invisible joint between two such surfaces, eg sheets of plaster-board.
FOOTING - The construction whereby the weight of the structure is transferred from the base structure to the foundation.
FORMS - Prepared forms of timber or other material for the casting of concrete.
FOUNDATION - The ground upon which the footings of a building are constructed.
GABLE - The triangular end of a house formed at the end of a pitched roof, from eaves level to apex.
GABLE ROOF - A roof shape consisting of two sloping surfaces.
GRAIN - Description of direction of growth of wood.
GROUND PLAN (FLOOR) - Plan view of a horizontal section of a building showing the layout of rooms on the ground floor.
GROWTH RINGS - Reflection of seasonal growth pattern in timber.
HALF-LAPPED JOINT - A joint in woodwork where two members are halved in thickness and joined by lapping.
HANDRAIL - Railing which serves as a guard and which is intended to be grasped by the hand to serve as a support.
HEADER - A brick laid with its short end to the face of the wall.
HEARTWOOD - The more durable inner part of tree trunk where cells seem only to provide support to the tree.
HIP - A slanting ridge formed by the intersection of two sloping roof surfaces at an external corner.
HIPPED ROOF - A roof with an end roughly pyramidal in shape, with surfaces sloping upwards from all three eaves.
HOT DIP GALVANISED - Process by which iron or steel is immersed in molten zinc to provide protection against corrosion while in service.
ISOLATED PIER - A pier supporting floor framing at points not attached to dwarf walls.
KILN DRYING - Controlled seasoning of timber by use of kilns.
LINTEL - Structural member or beam carrying loads over an opening.
LIVE LOAD - The load arising from the intended use or purpose of the building or structure, but excluding wind, snow and earthquake loads.
MASTER KEYING - A system by which all locks within a building are capable of being operated by one key. Often there are a series of sub-masters.
MASTIC - A waterproof adhesive plastic compound.
MATRIX - The mixture of sand and cement that binds together the aggregate of concrete.
MILLED - Timber that has passed through a moulding machine and is of a specific profile.
MITRE - Half the angle of a joint.
MOISTURE BARRIER - Material which is used to retard the flow of vapour or moisture into floor or walls.
MOISTURE CONTENT - Mass of water contained in timber expressed as a percentage of dry wood fibre.
MONOLITHIC - Any structure made of a continuous mass of material or cast as a single piece.
MORTAR - A composition of lime and/or cement and sand mixed with water in various proportions.
MORTAR JOINTS - Types of joints in finishing the mortar in stone or brick work.
MORTISE - A recess in a piece of wood to receive a tenon or lock.
NEWELS - Posts placed at top and bottom of flights of stairs to secure handrails, strings.
NOGGING - A horizontal piece of timber fixed between studs in a framed wall.
NOMINAL SIZE - Sawn sectional size of timber.
NON-LOAD-BEARING PARTITION OR NON–LOAD-BEARING WALL - One which supports no vertical load except that of its own weight and merely defines spaces.
NOSING. - A projecting edge of any flat surface (generally rounded in section), eg the projecting edge of a stair tread.
OFF FORM CONCRETE - Concrete which is formed by placing and stripping from formwork and has no other applied finish.
OVERFLASHING - The flashing which is built into the wall surface and sits over the upturned apron flashing.
OVERHANG (ROOF) - The section of a roof extending over the external wall (see Eaves).OVERLOADING
Placing too heavy a load on a beam, column or floor.
PARAPET - Low wall at the edge of a roof, balcony, bridge or terrace.
PARTICLEBOARD - A manufactured material formed by bonding together flakes of wood and pressing them into a dense sheet.
PARTY WALL - The wall between two adjoining buildings but common to and used to advantage of both buildings.
PERGOLA - An open framework over a path, terrace or patio.
PERPENDS - The vertical joints in a masonry wall.
PIER - A vertical member of base structure.
PITCH - The angle of inclination to the horizontal of a roof or stair.
PLANT - Tools and equipment used in building operations. To attach or fix by nailing or otherwise, eg planted door stop.
PLASTER - Material of a mortar like consistency used for covering walls and ceilings of buildings usually made of Portland cement mixed with sand and water.
PLASTERBOARD - A rigid insulating board made of plastering material covered on both sides with heavy paper.
PLASTERING - Any calcareous compound, usually of gypsum plaster, Portland Cement or lime putty and sand, that has been applied to a surface in a plaster state and sets hard.
PLUMB - Vertical or perpendicular.
PORTAL FRAME - Joining the rafters of a roof and wall frame together by a rigid joint such as that provided by welding.
PORTLAND CEMENT - A component of concrete and mortars which combines with water to provide the cement agent. Named for its resemblance to Portland stone.
PRE-CAST - Poured or cast in any place other than its ultimate position (eg pre-cast units of concrete houses).
PRE-CAST CONCRETE - Concrete manufactured away from its ultimate location.
PREFABRICATED CONSTRUCTION, PREFABRICATION - The manufacture in a factory of whole or parts of buildings such as individual rooms, walls and roofs, in contrast with the conventional construction of a building piece by piece on the site.
PROFILE - A frame set up on a building site on which is indicated the position of the building. (Sometimes called hurdle).
PVC (POLYVINYL CHLORIDE) - A widely used plastic - the main uses include water pipes, waste pipes and floor covering.
PREBATE - A step-shaped reduction cut along an edge or face or projecting angle of wood.
REINFORCED - To strengthen by the addition of new or extra material (eg reinforced concrete, steel rods are embedded to give additional strength).
REINFORCED CONCRETE CONSTRUCTION - Building construction in which the principal structural members are made of concrete which is poured around isolated steel bars, or steel meshwork, in such a way that the two materials act together.
RETAINING WALL - Any wall subjected to lateral pressure other than wind pressure and built to retain material.
RETURN - A term denoting that a feature has been continued at another angle.
REVEAL - The thickness of wall from the wall face to the door or window frame. The remainder of the thickness ofwall is known as the ‘jamb’.
RIDGE - The horizontal member at the highest point of a roof where the common rafters meet.
RIPPING - Sawing timber in the direction of the grain.
ROOF PITCH - The angle formed between a sloping roof surface and a horizontal line.
ROOF TRUSS - A frame designed to carry the loads of a roof and its covering over the full span without intermediate support.
ROUGH SAWN - Timber direct from the saw.
SAA - See (Australian Standard)
SAPWOOD - Wood from outside of trunk, usually high in starch.
SARKING - A covering of water-proof building paper beneath the external roof covering.
SASH - The framework in a window, into which the glass is fitted.
SCABBLE - The dressing down of the roughest irregularities and projections of stonework or the roughening of a smooth finish (eg concrete).
SCAFFOLDING - A temporary structure specifically erected to support access platforms or working platforms.
SCANTLINGS - Sawn framing timbers of comparatively small dimensions (eg 100 x 50) in a building.
SCARFING - The joining of two pieces of timber together in length by which the two ends are cut to lap over and fit each other.
SCREED - Boards or battens set up to establish the height at which concrete is to be levelled off.
SCREED BOARD - A board used to level off concrete between screeds.
SCRIBING - Cutting a piece of timber (eg a moulding), to fit the profile of another to which it is to be fitted.
SEASONED - Dried timber by air or kiln.
SERVICES - Supply or distribution pipes for cold or hot water, steam or gas; also power cables, telephone cables, lift machinery, transformers, drains, ventilation ducts, and so on.
SHEETING - Flat sheets of material to protect or cover a building framework.
SHEET FLOORING - Flooring made up and laid in large sheets.
SILL - The horizontal member at the bottom of a window frame.
SKEW NAIL - Nail driven at an oblique angle through a piece of timber and into receiving piece. Usually in opposite pairs.
SKILLION - A roof shape consisting of a single sloping surface.
SKIRTING - Moulding to cover the joint between floor and wall flooring.
SLIP JOINT - A joint so designed that movement of the units joined, by expansion or contraction, is possible without affecting structural soundness or stability.
SLUMP CONE - A mould into which concrete to be tested by the ‘Slump Test’ is placed, which is of standard construction inthe form of a cone.
SOFFIT - The lower face or under-surface of anything (eg the underface of an arch, the underside of the eaves of a roof).
SOFTWOOD - A non-pored timber.
SOLID PLASTER - Solid plasterers apply material of a mortar like consistency (usually made of cement mixed with sand and water) covering rough walls of a building to produce a smooth finish.
SOIL TEST - A core of earth taken from specific positions on a building site to test and select the type of footing needed.
SPAN - Face to face distance between points of support for loadbearing structural members.
STIRRUPS - In reinforced concrete beams, vertical or inclined rods to resist shear stress.
STRAIGHT EDGE - A length of timber with the sides and edges even and true, and the edges parallel; used for trueing and plumbing and levelling work.
STRETCHER - A brick laid with its largest side to the face of the wall.
STRIP FLOORING - Flooring laid as separate boards, fitting together with a tongue on one edge and a mating groove on the other.
STUD - Vertical member in wall framing.
SUSPENDED CEILINGS - A ceiling which is suspended from and is not in direct contact with the floor or roof construction above and generally used to conceal services.
SUSPENDED CONCRETE SLAB - A slab spanning between supporting walls or posts.
UNDERPINNING - The construction of new footings and walling under the footings of an existing structure which have failed or may fail.
VALLEY - The internal angle formed by two inclined slopes of a roof of an internal corner.
VAPOUR BARRIER - Impervious membrane providing a barrier against water vapour.
VERMIN PROOFING - Wire mesh fixed to bottom plate and set into mortar joint in brick veneer buildings to prevent entry of vermin into cavity.
WALL TIE - A steel wire tying brickwork to timber frame.
WATER CEMENT RATIO - The ratio between the amount of water and the amount of cement present in concrete.
WATERPROOF - Materials and construction which will prevent water from passing through walls and joints.
WEEP HOLES - Openings sometimes left in the perpend of a brickwork course over flashings, and at the bottom of wall cavities for drainage purposes.
WIND BRACE - A structural member, either a tie or a strut, used to resist lateral wind loads.
WIND LOAD - The estimated pressure or force exerted upon a structure by the wind, which must be provided for in the design of the structure.
