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VIC House and Land Package - Pull Out of the Building Contract?

Discussion in 'Property Law Forum' started by Daniel Edmondson, 27 February 2015.

  1. Daniel Edmondson

    27 February 2015
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    I have entered into a house and land package (2 separate contracts) but both signed at the sometime with the land developer and house builder. When I signed the intent to enter into a contract it was off a brochure with a floor plan and some elevations (no details) but a large list of inclusion. On the day of signing detailed drawings were included into the contract, which on a brief inspection were fine. After a detailed look, the room sizes are different to plan on the brochure (which we are been charged variation cost to have them as per the original plan), this along with various other disputes with the builder we do not have confidence that they will deliver the house we would like to live in for the rest of our lives.

    The current situation is
    We have settled on the land, my deposit has been paid and my bank as paid the balance.
    I have paid circa $10,000 deposit to the builder, which they have produced detailed drawings

    I would like to keep the land but build my own house through and alternative builder (not a volume builder). I would not be concerned if i lost my $10,000 deposit to the builder, i have already written it off. But my questions are as follows

    If I pulled out of the building contract would this effect my land, considering I have already settled on the land?

    Would I be able to build with an alternative builder?

    Would there be any additional financial implications, other than the $10,000 builders deposit?

    Is it likely that there would be any restrictions on the land that for example, wouldn't allow me to get a building permit? sell my house in future? rent my house in future? etc.

    There are some clauses in my land contract that read similar to "the purchaser covenants and agrees with the vendor that it will use the builder to undertake the building works". But nowhere in the contract does it state the name of the building company in question. Understanding the above, but considering I have settled on the land contract and that I now own the land, how can restrictions be imposed on me?

    I am hoping that the issues with the builder can be resolved, as it will be better for me in the long run, but at this point all trust is lost and i don't feel confident moving forward with this builder. I just want to know my options.

    Please ask me for more details about either contract, should that help provide further clarity.

    Any advice that can be offered, or details of who I need to speak to and what I need to do next would be appreciated.

  2. Victoria S

    Victoria S Well-Known Member

    9 April 2014
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  3. Rajesh

    Rajesh Member

    9 September 2017
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    Hi Daniel,

    I am in a similar situation now.
    The land is settled and the builder is changing the plan as they realized the plan in contract does not meet the council regulation. The revised plan is very ugly than the original.
    I am planning to terminate the building contract and build with someone else with a decent plan.

    Did you manage to terminate without any issues?

    Rajesh Mani
  4. Luiza

    Luiza Active Member

    26 July 2017
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    The requirement to use a builder is there likely to prevent you for carrying out the works as an owner builder.
    The "Land Contract" and the building contract are probably two independent contracts.
    You can easily check what covenants, if any, are registered on the title - do a title search or go back to the "Land Contract" - their content should be there.
    Sometimes it is possible to end a building contract if the builder doesn't comply with the laws on what documents and information should be provided to the owner. However, no competent lawyer will give you advice on the matter without looking at the documents. How much would it cost you? I would charge approx. $990 for review and advice so shop around and ask for a quote!
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