Prime costs and provisional sums explained

In our last blog we talked about custom home inclusions. And the importance of getting all the inclusions listed correctly so that you budget is adhered to.

In this blog I want to tell you about another trap that can cause your budget to blowout.

Prime costs and provisional sums

Contracts often include ‘industry terms’ that may be unfamiliar. For example, the term ‘Provisional Sum’ is often used when a particular aspect of the work is undefined and not fully costed. Another term, ‘Prime Cost’ refers to items that have an allowable budget but may be interchangeable (things like vanities, baths, doors etc.)

What these terms really mean is…

The Price May Change

For example, if earth-works is listed as a Provisional Sum item, you may end up paying way more than the base rate (depending on the difficulty of the work).

Or if certain elements of your design (e.g. bathroom basin and plumbing) are listed as Prime Cost items, they too may increase in cost depending on the market price and availability of stock.

Think about why many builders do this: If products become difficult to source during the building process, they can make substitutions without your consent. If a substitution costs more, it doesn’t affect them – you’re the one who pays.

This is perfect for the extension builder in Melbourne. But it can be disastrous for you because you may end up paying way more for things you don’t really want.

So be sure to…

Read and Understand Every Word of Your Contract…

…especially any ‘industry terms’ that are unfamiliar to you. If you’re not sure about something – ask. And don’t sign anything if it does not specify exactly what you want your home to be.

Don’t settle for second best when building your dream home,

Prime costs and provisional sums are just one example of an industry term that you may be unfamiliar with.
If you’re researching a ground floor extension, two storey extension or a Knock Down Re-build and need an industry term explained, send me a message. I will gladly help.



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