Michael Bleby Senior reporter Aug 2, 2023 – 3.11pm
Australian Financial Review.
Metricon and other builders have arbitrarily ended contracts and given home owners inflated new quotes to encourage them to walk away, in an effort to clear their decks of contracts the companies took on but could not build profitably, a building contract lawyer says.
After realising they could not complete the thousands of contracts they had signed in a HomeBuilder-fuelled land grab for business, companies such as Metricon looked for ways to end contracts, NSW lawyer Isabelle Braly told The Australian Financial Review.
“Initially, they preface it with a phone call. Everyone gets a phone call, then a generically worded letter. They blame the home owner for breaching the essential terms of the contract,” said SP Garrett Lawyers practitioner Ms Braly, who has represented home owners in domestic building contract disputes for more than eight years.
“The point is to scare away the unsophisticated client. So many people will go ‘It’s too hard,’ or ‘The bank won’t lend me that amount of [extra] money’ and give up. Or say ‘We’ll just sell the land’.”
The surge of new home orders triggered by record-low borrowing costs and the former government’s HomeBuilder incentive payment created a world of pain for builders crunched between the fixed-price agreements they had signed with customers and soaring costs.
Leave a Reply
You must be logged in to post a comment.