Build costs

[nod]

There’s two plots started about 6 months after us by a Manchester building company 

They are only about quarter of a mile from us So I called on several times for a nosey 

They quite a bit smaller than ours at 250m2 but he was happy to share his cost projections 350 build 200  plot 700 sale price There’s been a lot of people there throughout His vista have racked up like everyones 

They have just gone on the market today for 900k 

I think for plots to be viable developers will have to up there end price and hope buyers pay it 

 

The housing development I’ve been working on locally for the last 18 months has lost 2.2 million so for with 100 k per week penalty’s if they are still on after next Christmas 

We still have 104 to plaster 

[Adsibob]

16 minutes ago, nod said:

so for with 100 k per week penalty’s if they are still on after next Christmas

How does the penalty clause work in these types of arrangements? I always thought penalty clauses were unenforceable under English law.

[jamieled]

It might depend if they are truly penalty clauses or whether they are liquidated damages (sometimes the terms are used interchangeably despite the difference).

 

While there has been a tightening up of the enforceability of penalty clauses, there is still a strong presumption that if both parties are properly advised and of a similar standing, they are best placed to agree on what a reasonable penalty amounts to. It can be challenged if the penalty amount is out of all proportion to the losses incurred, but these losses can include some less obvious aspects such as reputational damage.

[nod]

2 hours ago, Adsibob said:

How does the penalty clause work in these types of arrangements? I always thought penalty clauses were unenforceable under English law.

There one of the largest building companies in Europe The whole site is being developed for a client who are marketing the properties 

We framed and plastered tiled The first eight in seven moths 

27 people in the office 

 

I did the framing and dry lining on two of the largest refrigerated units in the Uk and associated offices 

These are to store all the cancer medicines after Brexit One site manager Which was ridiculous 

He nearly had a nervous breakdown 

probably needed 2-3 

27 on a housing site is something I’ve not seen before 

[nod]

54 minutes ago, jamieled said:

It might depend if they are truly penalty clauses or whether they are liquidated damages (sometimes the terms are used interchangeably despite the difference).

 

While there has been a tightening up of the enforceability of penalty clauses, there is still a strong presumption that if both parties are properly advised and of a similar standing, they are best placed to agree on what a reasonable penalty amounts to. It can be challenged if the penalty amount is out of all proportion to the losses incurred, but these losses can include some less obvious aspects such as reputational damage.

No 

Pretty straightforward If we are not off here by next Christmas That’s what we will be paying 

There a city centre company that have a meeting 8-9 each morning 

There own Health and safety company that fines them thousands of pounds for each infringement 

Not sure how fining yourself works

[saveasteading]

3 hours ago, Adsibob said:

thought penalty clauses were unenforceable under English law

In the standard contracts there is a line to fill in for 'liquidated and ascertained damages. LADs

Of course the contractor will try very hard to avoid delay, but also to justify any delay that will allow an 'extension of time'. EOT

Surveyors battle over this. There used to be some evil contractors who endeavoured to charge their subcontractors this way, and I expect some major clients did the same.

The lawyers gained.

 

With 'real' clients, ie decent people trying had to make a living, I would explain about LADs. and that we already lost money if the job runs on. If LADs are insisted on then 1. we have to fight them rather than gt on with the job. 2. will add a few weeks of that value to the tender, as risk. 3. explain that if the deadline is as importnat as they say, then they should have started sooner.

 

With corporate clients I simply added the risk as a likely job cost.

[nod]

My wife’s just pointed out that two others nearby have come on the market also Similar size to ours albeit over three floors 

1.3 million Id of expected these to be 8-860 max Are developers simply adjusting there prices to suit 

Who’s paying these inflated prices ?

[nod]

9 hours ago, saveasteading said:

In the standard contracts there is a line to fill in for 'liquidated and ascertained damages. LADs

Of course the contractor will try very hard to avoid delay, but also to justify any delay that will allow an 'extension of time'. EOT

Surveyors battle over this. There used to be some evil contractors who endeavoured to charge their subcontractors this way, and I expect some major clients did the same.

The lawyers gained.

 

With 'real' clients, ie decent people trying had to make a living, I would explain about LADs. and that we already lost money if the job runs on. If LADs are insisted on then 1. we have to fight them rather than gt on with the job. 2. will add a few weeks of that value to the tender, as risk. 3. explain that if the deadline is as importnat as they say, then they should have started sooner.

 

With corporate clients I simply added the risk as a likely job cost.

I think the client has reached a stage where there has to be a cut off point 

The delays Some through bad luck ground etc 

Others brought on by themselves 

Earning a living in Health and safety hell is difficult 

 

[ProDave]

Individual build plots here have not been viable for developers for a long time. And that is with plot prices being low.  It is worthwhile for self builders because you get the house you want, or by doing a lot of work yourself you can build it cheap enough that you might get a modest profit if you sold.

 

The problem has to be building land is being valued too high.  It is almost like a ponzi scheme if the developers can only make money if the market rises so they can sell the house for enough to cover the costs and make a small profit?

 

This was a big issue when at the start of our build we could not find a buyer for our old house unless we reduced the price, and that would have meant it would cost us more to build the new 3 bedroom house than we sold the old 5 bedroom house for.  And sorry I could not stomach paying money to downsize which is why we did what we did.