Brace yourselves this is a long post, jump to half way down for our timeline
Part 1 – What is an end panel? (and the various paperwork stages of building)
This could be my ignorance for construction terminology, or perhaps broader contract/legal terminology but when we started this, people kept talking about their End Panel and I was honestly sitting there thinking WTF is that. Now we’re there I’m a little more well versed and realise the end panel, is the final part of our contract.
Through the building contract you go through four different stages of pricing:
- Tender – the initial estimate where you ask for everything you want and the builder will quote it all as accurately as possible to “tender” for your business. This can go back and forth through several iterations as you add/remove/negotiate over items until you receive pricing you’re happy with. At this point though, it’s really still an estimate because it will be loaded with “provisional allowances” which are estimated amounts of money for specific items that you need to go through in more detail to price accurately – ie. your kitchen fitout, electrical requirements. Builders will expect you to pay some more money before they get into those details. Typical things you might have PAs for are flooring and tiling, electrical, air conditioning, kitchen (or joinery if you want to fitout other areas with cabinetry such as laundry, media rooms), bushfire requirements, fittings and fixtures upgrades (such as tapware, doors and windows, paint, garage door), security, landscaping, additional building site costs.
- Contract – this is the point where you say ok, we’ve got this tender to a point where we’re happy with the price and what we’re getting. Now the builder will now proceed to ask you for more money because that’s how things get moving – never underestimate how flexible they will be with getting things done quickly when they’re waiting for you to pay some money. A contract will formalise all the pricing and commit you to building with them. By now you should have some plans you’re happy with too.
- Variations – now the contract is done and signed, you will most likely get into all those detailed items listed above. As the pricing comes in for each of them, you go through a mini cycle of a variation with all the costs which you review and may go through several iterations of the add/remove/negotiate process to get to a happy place before signing it off. Some variations won’t be linked to making these decisions, they might be additional build costs that come up based on plan approvals (ie. you need a privacy screen or an additional site survey or a special clause on building on your land), you may still be able to negotiate on them but they’re not going to be something you can say no to. We ended up with about $10k worth of additional build costs like these that we didn’t budget for in our site costs PA. We were lucky that our BAL was lower than expected so we had some fat in our contract that covered this, otherwise we would have had to sacrifice some of our upgrades.
- End Panel – once all the appointments are done and the plans are approved, you reach a point of “no more changes” (which isn’t entirely true, but your builder will probably charge you a huge admin fee if you decide you need the make a change after this – our fee is $1250 per change!). They will now go ahead and reconcile your tender, contract and variations into one document for you to sign off with your final cost.
End Panel goes through two stages – a draft where you check it to make sure all your provisional allowances have been deducted and you’re happy with the final number. If you’ve had a run of big unexpected site cost variations, you have the option to remove some items now to bring the budget back under control, or you have to nominate how you will pay the extra (ie. will you pay the extra cash yourself or will you change your loan application for more money). It’s common for people to opt to pay the extra from their own pocket, it’s less hassle than changing your loan amount with the bank and you’re also less likely for the bank to undervalue your construction because they don’t see the value in your upgrades.
Once the draft end panel is signed off, your plans go off again for construction drawings…one last chance for the builder to throw in some variations based on issues they haven’t noticed until now that will cost more to resolve. When those construction plans come back you will sign them off and then the builder will prepare your final end panel which is the absolute final reconciliation of costs and the figure you will end up paying.
Part 2 – Our End Panel Saga
- 13/11/2017 – CDC Plans Approved (notified directly by the certifiers)
- 14/11/2017 – Tender Expiry Date which gave Wisdom the right to charge us current list price for our build ($28,000 more than when we signed our tender)
- 16/11/2017 – CDC Approval notice from Wisdom and our CSO requested a management review of our contract due to the tender expiry.
- 23/11/2017 – Draft End Panel Received plus an extra variation for a privacy screen on our front balcony that was a council requirement (on our plans since contract…yet despite multiple requests never raised as a variation until now). I sat down to balance our draft end panel and immediately panicked because it was over $8500 more than I had expected. I had been tracking every variation and item in excel since day 1 so I knew the exact $ figure we had expected. After half an hour of reconciling all 215 items on the DEP, the very last item turned out to be the issue. We had a provisional allowance of $4000 for our landscaping, which combined with the $5500 landscaping credit we get was enough to cover the $7900 of landscaping (driveway and letterbox) that we had requested Wisdom to complete. But they had added another $7900 provisional allowance in addition to that.
- 24/11/2017 – Amended Draft End Panel Received it took an email and a phone call to our CSO to explain it made no sense that we had this $7900 provisional allowance and why it should be removed but they took it off and with that we owed just over $400 (which we will pay ourselves)
- 27/11/2017 – Draft End Panel Signed
- 28/11/2017 – Construction Plans Requested (10-15 working days to process) and notice that our final end panel cannot be assembled until management review our tender expiry
- 11/12/2017 – Unconditional Loan Approval received and sent to Wisdom
- 15/12/2017 – Call from CSO to confirm where we wanted our wall blocking and a few minor details on the construction plans
- 18/12/2017 – Construction Plans Completed (15 working days)
- 20/12/2017 – Constructions Plans Received (17 working days) as this was only 2 days before Wisdom shutdown for Christmas for 2 weeks I made it quite clear we would take that shutdown period to review the plans given that we had waited so long and it would make no difference to the timeline. Still no news on the management review of our tender expiry
- 08/01/2018 – Construction Plans Feedback after we found a couple of minor issues like the soundscreen insulation not being listed for everywhere we had paid for and our privacy screen still saying we were going to install it.
- 10/01/2018 – Amended Construction Plans Received
- 10/01/2018 – Tender Expiry Variation Received this had been hanging over our heads since June when our land was delayed and I had asked so many times with no response that I didn’t think it would happen but I was wrong. Management asked us to pay an extra $6,500 which we now have to fund ourselves. We’re grateful it’s not the full $28,000 but it puts a decent dent in our savings towards everything we need to do for the house post build. The variation only extended our contract date out to 10/02/2018 so I checked with our broker if we would be ok because the bank had just requested more documents to finalise the loan 2 days prior and they were still dithering around with refinancing our land loan. It’s still cheaper than if we had started this all 3 months later after a price rise but doesn’t leave a warm and fuzzy feeling after 15 months of administration dragging on.
- 11/01/2018 – Construction Plans and Tender Expiry Variation Signed Off we signed these off quickly as our CSO said we should have our end panel by mid following week – no such luck as they sat in her inbox for a week.
- 18/01/2018 – End Panel Requested by CSO
- 19/01/2018 – End Panel Prepared by Wisdom
- 24/01/2018 – End Panel Received from CSO again as we were 1 day out from a public holiday weekend I made it clear we would take the weekend to review everything properly before returning it as we had signed off our construction plans really quickly only for nothing to happen at Wisdom’s end for a week. Part of this email also included the invoice for us to pay the extra for variations over the top of the contract price that we’re funding through our mortgage.
- 29/01/2018 – End Panel Signed Off
- 30/01/2018 – Funding available to commence construction
- 31/01/2018 – LACC Issued has to call to get a soft copy that I could send to Wisdom so we didn’t waste time waiting for the post
- 01/02/2018 – File moves to Production Estimating