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Ask Deborah Awyzio Your Own Question
Deborah Awyzio
Deborah Awyzio, Solicitor
Category: Australia Law
Satisfied Customers: 863
Experience:  Bachelor of Laws (QUT), BIT (QUT), Family Law Accredited Specialist, over 12 years experience
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CONSULTANT/CONTRACTOR. I DO WORK PROJECT BUILDING COMPANY.

Customer Question

HELLO THERE, I AM A CONSULTANT/CONTRACTOR. I DO WORK FOR A PROJECT BUILDING COMPANY. WHERE A CLIENT WOULD BE REFERED TO ME TO DESIGN A HOME ON A DIFFICULT SITE OR A NEW HOME FROM SKRATCH. I AM AUTONOMUS FROM THE PROJECT COMPANY WHERE I WORK FROM MY OWN
OFFICE, HOWEVER MY SETUP IS SUCH THAT I FALL UNDER THE UMBRELLA OF THE PROJECT COMPANY, BY USING SAME CARDS STATIONARY LETERHEADS AND AGREEMENT. EVEN MY BUISNESS NAME REFLECT THE BUILDER EG PROJECT BUIDERS NAME "DELUXE DIVISION" WHICH IS A TRADING NAME. THE
FEE FOR THIS DESIGN, SITE INSPECTION AND TENDER IS $5000, REFUNABLE UPON THE CLIENT ENTERING INTO AN AGREEMENT TO PREPARE THE PRELIMINARIES FOR ALL AUTHORITY APPROVALS. THIS INTRO WAS TO SET THE SCENE FOR YOU. NOW I HAVE A CLIENT WHOM I PREPARED SEVERAL DESIGNS
UNTIL THEY SETTLED ON THE CURRENT ONE. PREVIOUSLY I ALSO SUBMITTED THE PREVIOUS DESIGN TO THE PROJECT BUILDER FOR A TENDER/QUOTE. THE PROJECT BUILDER PREPARED A TENDER/QUOTE BUT THE COST WAS TOO HIGH BASED ON ALL THE ADDITIONAL ITEMS THAT HAD BEEN ADDED IN
FFROM PREVIOUS DESIGNS. SO I SUGGESTED THAT WE SHOULD REMOVE AS MANY AS THE ADDITIONAL ITEMS TO BRING THIS BACK TO A BUDGET THEY WOULD BE HAPPY TO PAY. THE LAST (CURRENT DESIGN) WAS SUBMITTED AGAIN TO THE PROJECT BUILDER AND WITH THEM FOR A MONTH APPROXIMATELY.
IN THAT TIME FRAME THE PROJECT BUILDER DECISED NOT TO BUILD IN SEVERAL AREAS (MY CLIENT WAS ONE OF THOSE AREA) AS IT WAS GETTING NEARLY IMPOSSIBLE TO GET TRADES TO THE AREAS. I WAS NEVER COMSULTED ABOUT ANY WORK I HAD COMMING UP BUT THEY WERE AWARE OF THEIS
TENDER AND ANOTHER ONE WHICH SO FAR SEEMS LIKE THEY HAVE TAKEN THE DESIGN I DID AND GOT THERE OWN QUOTES. I WAS ADVISED TO CALL AND SPOKE TO THE HEAD ESTIMATOR AND WAS TOLD THAT THE PROJECT COMPANY THAT THEY WOULD NOT BUILD THIS HOME IN THE AREA. IN HINDSITE
THEY COULD HAVE ACCEPTED THE FIRST TENDER AND REVISED ALL THE CHANGES AFTER. THE ACCEPTED TENDER MENT THAT THE WERE COMMITED TO THE HOME. NOW ITS BEEN A WHILE (A FEW MONTHS) I HAD BEEN TRYING TO GET THE PROJECT BUILDER TO GIVE ME A LICENCE RELEASE SO I COULD
HELP THIS CLIENT GET OTHER BUILDERS QUOTE. AS I SAID IN THE BEGINNING ALL DOCUMENT HAVE THE COMPANY LOGO AND COMPANY INFORMATION. THE FIRST REACTION WAS THE CLIENT EXPECTED THE $5K BACK FROM THE PROJECT BUILDER AS THEY MADE THE DECISION NOT TO PROCEED. I THEN
ADVISE THAT THE PAYMENT $5K WAS ACTUALLY PAID TO ME IN PROJECT BUILDER NAME DELUXE DIVISION. NO I RECEVED AN EMAIL LATE LAST WEEK FROM THE CLIENT TELLING ME I HAVE TO PAY THE MONEY BACK THEY DONT CARE ABOUT ANY CIRCUMSTANCES. I HAVE IN COB FRIDAY TO PAY IT
OTHERWISE THEY GO TO THE DEPT FAIR TRADING. CAN ANYONE PLEASE GIVE ME SOME ADVISE AS TO WHAT I SHOULD DO WHETHER I'M LEAGALLY THE ONE AT FAULT HERE OR THE PROJECT BUILDER IS OR BOTH? THANKS JIM
Submitted: 1 year ago.
Category: Australia Law
Expert:  Leon replied 1 year ago.

Good Afternoon

My name is ***** ***** I am a NSW Solicitor. Thank you for your question, and will do my best to assist you with your question. Please understand this is not legal advise Please understand this is not legal advise but a guide to assist you.

The client does not have a contract with you and you do not have one with the client. Your relationship is with the building company as is the clients.

if the client wants his money back it has ot be from the building company not you.

If you have received the money then you will have to pay it back.

You have to look at your agreement with the company on what happens if the job does not go ahead.

Customer: replied 1 year ago.
Hi Leon,The agreement was signed like below and on the Project builders letterhead. The agreement also sets out what is to be done a site inspection, a design and a tender/quote, all of which was done originally. this was a redesign and re tender/quote to reduce the cost.Accepted by:- Project Builder
my signature here
Per:- Jim Watt-Smith
Name: project builder deluxe division (my business name)Whilst the agreement is on the project builders letterhead, the money gets deposited now directly into my account project builder deluxe division. Initially it was paid to the builder then they paid me. The business name was set up to make it easier for all parties (builder and me)My arrangement with the project builder is simple they provide me with the projects and I design the homes. The project builder then provides a quote/tender to build it I then build in all the costs to do the plans and seek the approval. The tender presented is the builders quote and my fees to do the above as 1 tendered price.The builder pays no fees to me for any tendered project. My fees are derived but the costs I build into the project builders tender.Thanks
Expert:  Leon replied 1 year ago.

Good Afternoon

Your agreement with the building company. What does it say if a project does not go ahead and payment for your work?

Customer: replied 1 year ago.
Leon,Here is the wording out of the agreement if the job does not go ahead and the owner of the design. this is signed by the owner/sWe acknowledge and agree that the property and ownership and the copyright of all sketch plans
and designs prepared by Project Builder in accordance with this agreement shall remain the
property and the ownership of Project Builder at all times and nothing in this agreement shall
give license or otherwise to the owner to use any plans, sketches or designs prepared by
Project Builder unless otherwise provided in writing.It is agreed that if We enter into a building agreement with Project Builder for the construction of
the building works upon the land all monies paid by us will be deducted from the contract price. If
a building agreement is not entered into, the total price is non-refundable and Project Builder
may also enter into a License agreement with us.
Expert:  Leon replied 1 year ago.

Good Afternoon

Ok, this is between the building company and the client.

You are paid by the building company. In your contract with the building company, what does it say, if the project doe snot proceed for any reason? Are you still paid for your work by the building company?

This is the agreement I am interested in.

What the customer signs has no relevance to you. You have no contract with the customer.

Customer: replied 1 year ago.
My agreement says nothing if a job does not go ahead, they only work on projects that will go ahead as they are not paying for anything at this point.
Expert:  Leon replied 1 year ago.

Good Morning

What a mess.

You have a situation where the refund is only given if the project goes ahead under the agreement with the client.

In this case you and the client can sue the company.

They are the ones in breach.

The silence in the agreements about refunds and payments is a problem.

Under general law the customer has requested the work and that has been done They are ready to go but the company is refusing to build. The customer can sue them for a breach.

You can sue the company for payment because you have done the work and they have to pay you. It is because of their refusal to build that has caused this.

How much money are you owed?

Customer: replied 1 year ago.
I'm owed nothing the client paid the first stage design $5000 and it was paid to me but the cost is $35K in lost opportunity more than anything else
Expert:  Leon replied 1 year ago.

Good Afternoon

This is what you are saying you have lost in the project?

Does your agreement with the company set this out and how it is paid?

Customer: replied 1 year ago.
that would have been the fees added to the Tender/quote to do that home.No the agreement signed only covers the design stage. When the clients accepts the Tender another agreement setting out the costs and involvements for that next stage
Expert:  Leon replied 1 year ago.

Good Afternoon

On what basis do you get paid the extra then if the agreement is silent on that

If you can point to something then you can sue for a breach of contract.

Does your agreement with the company explain this process and the second agreement?

Customer: replied 1 year ago.
there is a list of what is included in the second stage and the fees for this stage. Also on this agreement is the mechanism to show the credit of the initial $5k, it looks something like below for example.Tender Price $ 405,000.00
Less Design Payment credit $ 5,000.00
New Tender Price $ 400,000.00
Payment for Plans and Council and Approvals $ 35,000.00
Revised Tender Price $ 365,000.00The client pays the $35,000 to my account the same as the design fee.
Expert:  Leon replied 1 year ago.

I think I have confused you.

I am not asking about the agreement with the client.

In your agreement with the company that you are connected with. Does it say anything about your payment structure and what happens if the project does not go ahead.
You have no contract with the client.

Is what you have told me in the agreement with the customer or in the Contract you have with the company?

Also there has to be a clause about what happens if the project does not go ahead. This is important.