From Consumer Affairs Victoria: “A reasonable estimate of the cost of certain work if the builder, after making reasonable enquiries, cannot give a definite price when the contract is signed (for example, supply and installation of air conditioning).” CAV recommend avoiding these in a building contract.From HIA: Provisional Sums “are used where there is a mixture of items and labour (installation). The PS allowance is the estimated cost price for the builder to do the work (item plus labour) for the owner. The price of the PS to the owner is the actual cost price plus the builder’s margin applied to the amount by which the actual cost price exceeds the PS allowance. The owner can choose whatever work they want within the range of work contemplated by the PS description. Therefore, unlike a PC (prime cost) item, where there is a change to the scope of work, there is no need to do a variation.”
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| Our first attempt at designing a new home (Federation Style) |
Last week we got the first draft of a design (based on our design attempt above) with one of the building companies we are exploring options with. We have paid $200 to get a floor plan design and ball park estimate done. Over the weekend we went back with our changes and questions. One of the issues that has come up is the kitchen. We (mainly “I” because I don’t like stone bench tops) want timber bench tops. This company doesn’t do them, only Caesar Stone, and this was the second occasion in which the sales person tried to talk us out of timber. Yes we know it requires maintenance, but timber is so much warmer and inviting and can look really spectacular! Its also going to be a Federation Style home, so timber fits with the style. So now we have to include the kitchen as a “provisional sum”, although we can use the same kitchen builder as the company uses, and they’ll negotiate the same rate for us. (Starting to sound dodgy here?). It got even weirder when the sales consultant who is doing the design wouldn’t give us the name of their kitchen company so we could go and look at what they do and decide whether they have the look/product/style/quality we want. So now we are researching kitchens and trying to locate kitchen companies who do timber bench tops – which is quite difficult as we keep getting told no-one wants them.
I’m still not sure how this provisional sum would work. If we go to a kitchen company and find the kitchen we want, get them to quote for supply – is the Provisional Sum an estimate for the builder to install it, or to purchase it on our behalf and install it? (plus their margin of course!)