Get Victorian Alterations Additions And Renovations

A cost-plus-fixed-fee contract is a cost-reimbursement contract that provides for payment to the contractor of a negotiated fee that is fixed at the inception of the contract. The fixed fee does not vary with actual cost, but may be adjusted as a result of changes in the work to be performed under the contract.

A cost plus contract can be used for domestic building work where: The cost of the construction is estimated to be $1,000,000 or more; or.

Examples include rent payable, utilities payable, insurance payable, salaries payable to office staff, office supplies, etc. read more includes the allocable cost to the contract, viz., office rent, traveling expenses, insurance, office supplies, etc.

An example of a cost-plus method is when a builder charges by the hour and you do not have a fixed price for your contract. You can use a cost-plus contract if you are renovating an existing house, but only in very limited circumstances. Get legal advice before you sign any cost-plus contract.

Cost Plus Contract Disadvantages For the buyer, the major disadvantage of this type of contract is the risk for paying much more than expected on materials. The contractor also has less incentive to be efficient since they will profit either way.

When Should I Pay My Builder? The default payment term in the HIA Contract for all HIA Progress Payments is 5 days. Section 17.5 reads: “The owner must pay a progress claim within 5 working days of the builder giving the claim.”