MY FAVOURITE ROOM JENNA HEWITT Jenna Hewitt moved back to New Zealand from Melbourne a year ago to start her own, recently launched venture “the bubble”. “The bubble” is an app and website that showcases the best places to eat, drink and shop across New Zealand, customising search results based on what you are looking for. Jenna tells Ponsonby News, “I am the youngest of three, a sneaker fanatic and have a mild obsession with hearts and skulls. The feeling of velvet makes me cringe and the squeaky sound that cornflour makes gives me goose bumps.” The young entrepreneur shares a villa on Richmond Road with two friends. For them this is the perfect location, with Ponsonby Central only a few hundred metres away for strolling up the road to get coffee on a Sunday, or a “grass juice” from Ceres if they have been out the night before. Jenna continues, “Since leaving university (aside from when I was overseas) I have always lived in the Ponsonby area. I also share an office with the boys from DARKHORSE in Grey Lynn. I love it, living so close to work makes life a lot easier, my family and most of my friends are over this way too.” Jenna’s favourite room is the open plan living area. She says, “It’s a sanctuary at the back of our villa and where all of the action happens, whether it is sharing a bevvy with family, dinner parties, building forts with my friends’ kids, work or just hanging out. I love this room. It’s cosy in the winter and drenched in sunshine over summer.” Her favourite things in the space are the white sandstone Buddha (a birthday gift from Jenna’s brother and his wife) which she describes as “a little reminder to stay Zen and balanced when life starts to get crazy.” Jenna also loves the colourful artwork on the walls. “No-one wants to be surrounded by porridge!” PN the bubble, T: 021 129 0891 www.thebubble.co.nz
“MYTH OR REALITY – FIXED PRICE BUILDING CONTRACTS WORK OUT CHEAPER?” What form of building contract should you enter into? Clients often ask me what form of contract they ought to enter into with builders. One could readily assume that builders are going to do better out of a “charge up” or “costs plus margin” contract as they get to charge for actual time worked, and that fixed price works best for home owners in that they have a firm fix on the cost. But experience establishes that such an analysis is far too simplistic. Is there really such a thing as a fixed price contract? In broad terms every fixed price contract will identify items to which the builder is not able or prepared to allocate a fixed price. Further, some items may be allocated a prime cost sum and/or a provisional sum which give an estimate only of likely cost.
It is also important not to dismiss the importance of estimates. Assuming sufficient detail was provided, the home owner could hold the contractor (generally) to that estimate, and where there was significant cost overrun, the contractor would have to substantiate his reasons for exceeding items as estimated. One form of contracting does not necessarily fit each set of circumstances. It follows that it is not as simple as saying charge up only serves the builder’s interests, and fixed price is the only form of contract that serves the home owner’s interests. Ultimately the strength of the relationship between owner and builder will be reflected in the quality of building work completed. Legal Vision is a Ponsonby based law firm.
Even a relatively simple home renovation that is completed on a fixed price is likely to have its value change just on the normal variations that a builder may claim. For example, a builder may identify borer while renovating a 1950s state house. This change to the scope of work is in normal circumstances going to be treated as a variation which will increase the value of the fixed price contract. So in essence, I am not so sure any contract is truly fixed.
NOTE: This article is not intended to be legal advice (nor a substitute for legal advice). No responsibility or liability is accepted by Legal Vision to anyone who relies on the information contained in this article.
Arguments against contracting on a charge-up basis The typical arguments I have heard are usually twofold: a) A competitive tender is the only way to get a true and fair market price; b) If a builder is not held to a fixed price no adequate restraint is put on at least his cost of labour. In response to a), that argument seems to discount that it is still possible through tender to get a very distorted cost of building. For example, you may have a contractor coming in low who is attempting to “buy” a job, which will not provide you with a realistic cost of building. Further in response to b), this criticism of “charge up” contracts seems to completely discount the need for a builder to service all his other contracts/clients. There is also the matter of a builder’s reputation that he no doubt strives to maintain.
112 PONSONBY NEWS+ October 2013
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