WA builders demanding as much as $10,000 within 10 days as cash flow struggles bite industry

Builders are forcing customers to stump up five-figure sums within a ten-day deadline, as cash flow struggles take hold of the sector. It comes as building companies pass on some or all of the higher prices they are paying for materials, amid global supply chain issues and labour shortages. The State Government watchdog, Building and Energy, confirmed the ten-day deadline was legal, even when the new costs exceeded the amount in a fixed-price contract. Traditionally, builders charged new costs when progress payments are made, giving customers several weeks or months to find the extra money. But one man, who asked not to be named, said his builder gave him a week and a half to stump up $10,000. He said the extra cost came despite assurances when he first signed up with the builder that his fixed-price contract would never be increased. Fixed price contracts can legally be varied to cover new costs in some cases. That includes when it takes more than 45 days for works on a new home to commence from the time the contract to build a house is signed, and the delay is not the builder’s fault. The man said he was lucky he had the amount in savings, though it was intended for the fit-out of the home. He said he had no access to extra credit through banks after interest rate rises put a crunch on the amount he could borrow. “Who the hell can pay $10,000 in ten days? Not everyone has $10,000 in their back pocket,” he said. But housing expert Gavin Hegney said home building customers who baulk at the payments should remember they had experienced a massive windfall. He said a $200,000 build price locked in about two years ago would now cost at least $240,000 to build now. On top of that, a $200,000 block of land had risen ten per cent in value. Along with $45,000 in State and Federal grants, the customers had incurred a $105,000 windfall. Mr Hegney said buyers who had been charged $10,000 in extra costs were still close to a six-figure windfall. “This will put someone ten years ahead in their payments, from the day they move into their home,” he said. “It’s a once-in-a-decade win.”

WA builders demanding as much as $10,000 within 10 days as cash flow struggles bite industry

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