Your builder has raised the price. What are your options?
It happens more often than anyone in the industry admits, and it usually arrives with a deadline attached. Before you sign anything, pay anything or agree to anything on the phone, work through the steps below.
What to do first
In order. None of these commits you to a position, and all of them put you in a better one.
Do not sign or pay today
A price increase almost always comes with urgency attached to it. The urgency is rarely a requirement of your contract. Taking two days to understand what you have been sent is reasonable, and saying so out loud is enough.
Ask for it in writing
Four things: the new figure, what it is for, the clause in your contract it relies on, and how it was calculated. An increase that cannot be tied to a clause and a calculation is a negotiating position, not an invoice.
Read three parts of your contract
The price clause, the variations clause, and anything headed rise and fall, price validity or provisional sums. Nearly every mid-process increase comes out of one of those, and they are usually only a page or two.
Work out what you have actually agreed to
A quote, a preliminary agreement and a signed building contract are three different things, and what can be changed differs across them. Establish which one you are in before you argue about the number.
Get a second opinion before you reply
Not from the builder asking for the money, and not from a forum. Somebody who reads these documents every week can usually tell you in under an hour whether an increase is contractual, negotiable or neither.
Know where the formal help is
Western Australia has a building regulator and a consumer protection agency, and both deal with complaints about residential building work and contracts. It does not have to be your first step. Knowing it exists changes how the conversation goes.
Where mid-process price rises actually come from
Almost every increase we are shown traces back to one of these six. Identifying which one you are dealing with is most of the work.
Provisional sums and prime cost items
An allowance written into the contract for something not yet chosen or not yet fully known. If the real cost lands higher, the difference is yours. Ask for the original allowance, the actual cost, and the evidence behind it.
Site costs after the soil and contour reports
The allowance in the original quote was an estimate made before anyone tested your block. Ask to see the reports the new figure is based on, not just the figure.
The quote expired
Many quotes are valid for a set period. If titles, finance or your own decisions ran past it, the builder may reprice. Ask which document set the expiry and what the delay was attributed to.
A rise and fall clause
Some contracts allow the price to move with the builder’s costs. If yours does, ask for the clause, the basis or index it uses, and the arithmetic. If yours does not, say so.
Variations
A change made after signing. Some are requested by you, some are agreed in a meeting and never priced at the time. Ask for the signed variation and the price that was agreed when it was made.
Delay, then repricing
Late titles and late finance are common in WA, and a build that starts later can be priced at later rates. Whether that is allowed depends on the contract, and whose delay it was is usually the argument.
What kind of increase is it?
Find your row before you respond. It changes what you should be asking for, and it changes how strong your position is.
| Type of increase | What it means | What to ask for |
|---|---|---|
| A variation you requested | You changed something after signing. | The signed variation, and the price agreed at the time you agreed it. |
| A provisional sum adjustment | An allowance in the contract turned out to be too low. | The original allowance, the actual cost, and the invoice or quote behind it. |
| Site costs | Your block needed more work than the allowance assumed. | The soil and contour reports the new figure is calculated from. |
| Price validity expired | The quote was time-limited and the time ran out. | The document that set the expiry, and what the delay is attributed to. |
| Rise and fall | The contract allows the price to move with costs. | The clause, the basis or index it uses, and the calculation. |
| None of the above | No clause has been named at all. | The clause, in writing, before you discuss anything else. |
A fixed-price contract sets the price subject to whatever that contract itself allows to change. That is not a trick and it is not unusual, but it is the part people are surprised by. Our article on fixed-price and cost-plus contracts explains how each behaves when costs move.
My husband and I had a builder which we bought half of the block from. We were pushed into a contract and we were not clear on what to do and what to expect. However, when we had Luke on board, he totally understood our current situation and he utilised his professional knowledge and design experience to help us understand more about the building procedures and outcomes. He provided us realistic and valuable suggestions on plans, and he was always there to help us to work together to meet a solution.
We are independent, and we are not your builder
We are an independent building advisory. We do not build homes, we are not owned by a builder, and we are not lawyers. What we are is people who read these contracts every week and are not being paid by the person asking you for more money.
- Read the contract and the variation with you, and tell you what is standard and what is not
- Price the same scope with builders on our panel, so you know what the market number actually is
- Tell you plainly whether the increase looks contractual, negotiable, or neither
- Help you work out what walking away would cost, before you decide anything
- Say so if what you need is a lawyer rather than us
Where to get formal help in Western Australia
Independent and official
Building and Energy is the state regulator for residential building work. Consumer Protection WA handles consumer complaints, including about building contracts. Both are free to contact and contacting them commits you to nothing.
If the amount at stake is significant, if you are being asked to sign something to release it, or if the builder is talking about terminating, get advice from a lawyer who works on building contracts. This page is general information, not legal advice.
Common questions
Can a builder increase the price after I have signed?
Sometimes, and it depends entirely on what you signed. Residential building contracts commonly allow adjustments for provisional sums, site costs and variations, and some allow for cost rises. What no contract allows is an increase with nothing behind it. The first question is always the same: which clause, and show me the calculation.
The builder says the increase is not negotiable. Is that true?
It might be. It might also be a position. The way to find out is to ask for the clause and the calculation in writing. Anything that cannot be evidenced is worth questioning, and a builder who will not put a figure in writing has already told you something useful.
Can I cancel and go to a different builder?
Sometimes, but it depends on where you are in the process and on what leaving costs under your contract. Deposits, preliminary work, plans you have paid for and the land settlement timeline all matter. Work that number out before you make the decision, not after it.
What if the increase came before the slab was poured?
That is one of the more common points for it, because the site costs and the soil report land around then. It does not make the increase automatically valid or automatically wrong. The same questions apply: which clause, what evidence, what calculation.
Does it cost anything to have you look at it?
No. We are paid by the builders on our panel when a client builds with one of them, never by you. There is no fee for going through your documents and no obligation to do anything afterwards. Our how we get paid page explains the arrangement.
Is this page legal advice?
No. It is general information about how these increases usually arise and what to ask for. If the amount is significant, if you are being asked to sign something to release it, or if the builder is talking about terminating, get advice from a lawyer who works on building contracts.
Send it to us before you sign it
Bring the contract, the variation and whatever the builder has put in writing. We will tell you what we see. It costs nothing and you are under no obligation to build with anybody.