Question: We engaged a builder to address concrete cancer on a standard costs-plus agreement. On the final invoice, OC was not privy to how he came up with the costs. Did we write this builder a blank cheque?
We engaged a builder to address concrete cancer within a lot. The OC signed a standard costs-plus agreement from HIA. The OC were happy to pay costs and give the builder a profit, believing that the contract entitled them to see details of the builder’s costs, like timesheets and receipts for the materials. However, when the bill came, the builder provided a cubic measurement (litres) and a per-litre cost. The volume was about right, but OC was not privy to how he came up with the costs.
When we challenged the bill and asked for more information, the builder refused and declared that this was industry standard. They would not provide actual figures for time and materials.
Did our building write this builder a blank cheque? When remediating concrete cancer, is there a better way to engage builders to keep them accountable and have a more transparent “costs plus” agreement?
Answer: This is very complex and difficult for owners unless the agreement is absolutely crystal clear.
Volume measurement for repairs is not ideal, particularly from an owner’s perspective. It’s extremely difficult to be able to determine how much was done. Experts have experience. Part of the issue here, is getting a very firm upfront and signed agreement with the builder to determine how the final price will be calculated.
I’m not a fan of volume measurement because, as a supervisor, I sometimes find it difficult to check, but there are strategies. We can have hold points in an inspection process where we indicate the builder can’t proceed past a point until something’s been addressed. The expert has the opportunity to look at the progress and potentially measure and understand how much volume has been used.
It’s about upfront transparency. An expert knows how to manage the process. It is very complex and difficult for owners to take on unless the agreement is absolutely crystal clear.
This post appears in the June 2025 edition of The NSW Strata Magazine.
Bruce McKenzie
Sedgwick
E: bruce.mckenzie@au.sedgwick.com
P: 1300 735 720
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