Friday, 20 April 2018

Building in NZ - Pre-Contract

This is my journey from purchasing a section to signing a building contract in NZ. I hope you'll find it useful.

It would have been better if I could have afforded an architect to build me what I want (a French-inspired home) but such costs were quite beyond me. They can be 15% of the total build. With an architect's plans you can shop around for the best price amongst builders. The best option for me was to find a quality builder with a good range of plans, one of which might suit.

It sounds simple but I can assure you that if you want other than a bog-standard box it is not. House and land packages/turnkey deals are the easiest but my chosen builder didn't have anything on offer so I chose my section and then chose my builder based on the fact they were the only ones with a plan that resembled something I might like.

Why I liked their plan:
There was natural light coming directly into the kitchen and I could stand at my sink and look out on my garden. These days the trend is to put the kitchen in the middle of the house with no natural light, only whatever light would come in from the dining or living areas. In short, you need to use electricity to light your kitchen any time you want to work in it, they are so dark. Not very sustainable in my opinion. I live in a duplex currently which is exactly like that. It's consequently dark and cold to live in.
I also liked the plan because it had elements of 'character' such as great indoor-outdoor flow to multiple patios and pergolas which climbers could climb, wind and ultimately drizzle down - think grapes, wisteria and roses. There was also a European-shaped external chimney much as you might find in an old cottage in France or England. I wanted street appeal and friends had suggested I use one of my bedrooms as an Airbnb to help meet my living costs. Tick!

After careful thought I felt the current plan used up too much of the section on driveway, robbing me of garden space. This single aspect meant we had to work out how to reorganise the garage, the entranceway and the bnb. Driveways are scarily expensive folks. Keep them minimal, especially if you want tinted exposed aggregate to look a bit classier and to eliminate the horrendous glare from raw, white concrete.

Danger: the minute your builder makes a drawing of your ideas they become your builders ideas and thus copyrighted. You can't take your own ideas to another builder and ask them to come up with something that meets your needs ie trot your plan around for pricing. Other builders get nervous about legal ramifications of 'shopping plans'. They all want to propose one of their standard plans which of course don't meet your needs. They then have to come up with something different that is not like the first builder's ideas so they can't be accused of plagiarism. For a 3-bedroom house it's hard to come up with something original. None of them wants to design something from scratch for you no matter what their marketing says. They feel safer using their own plans, most of which are boring to me. My builder is expensive but the barriers to going with someone else really dissuaded me from changing. i found seeing my ideas with the builder's logo irkesome. They've got you by the curlies. I checked with a building design copyright lawyer who said I'd better stick with my expensive builder to be safe.

Bear in mind your design must meet stringent developer covenants if they are in place. These are a list of materials you are 'allowed' to build with and what style. You must have street appeal. No heat pump condensers may be seen from the street. Take care with positioning of solar panels, raintanks etc. Nothing 'ugly' facing the street please. Covenants dictate your colours, pets, exact fence type, activities you can indulge in and size of home. I am forced to build a 200m2 home just for me. Ridiculous!

OK, you've got your layout pretty much sorted so your builder provides a rendering of what it might look like. Exciting! They should show you how the house is positioned on the site to profit from the sun. Do you want most spare land in front on the street or, like me you prefer your space to be private around the back? Your site layout should show any easments, boundaries. distance to road and neighbours, recession planes because your council will need to be happy with your choices. See, it's not just about you.

Next your builder will draft a sales proposal consisting of basic specifications for the house and a total cost. I wanted a fixed price. OK except that in reality it's not, really. So many things are NOT included such as driveways letterbox, fences. landscaping, sometimes spashbacks, logfire surrounds and hearths, curtains. Sometimes your builder will decide to change the specs because they can't build the house for your budget. This is disappointing and results in uncomfortable but necessary negotiations as you make trade-offs. I sacrificed the security system and doorbell so I could have 2.2m internal doors to match my 2.7m stud. That extra height makes  a big difference in the whole feel of my home.

Beware the PC sums. Your builder doesn't know your tastes so they decide on the specs for plumbing, electricals, flooring, tiling, heating and attach a guestimate for costs. Go around every supplier checking that the PC sums are realistic or you could get hit with thousands of dollars of additional costs.

You get the Sales Proposal and they should also send you a blank copy of the contract and the Residential Building Guide support documents. I had my lawyer check this even though it was a standard Masterbuild contract. Your builder MUST supply these documents in advance of you signing.

You will be sent an Authority to Proceed to concept plan drawings to sign and which you must pay for. They say the drawings are included in the cost if you decide to go ahead and build the house but how would you know? The cost of the house was the same before I signed and paid for the drawings as when I later signed the contract to go ahead and build. I queried it but - how can you know? For me the house price hadn't reduced $2400. Building is not a transparent process and these are not the working drawings.

Your builder should also apply for a Project Information Memorandum from the council to see what the state of the section is for building on. Geo reports are not enough, even if supplied free by your developer. Your section might need special testing even though the council knows the foundation category. In my case the equivalent of TC1.

Note: talk to others who have built. Listen to their horror stories and learn from them, pick yourself up off the floor and keep going.

Next post: signing the contract and what you need to do while you are waiting to start building.


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