Consumer Building Guide NSW- Rise and Fall
‘^^ Rise ^^
and fall > \ is an agreed method of upward or downward cost adjustment to the price of the contract to allow for fluctuations in the cost of labour or material during the construction period.
Rise and fall clauses are extremely useful when the cost of materials can increase on a monthly basis. They allow the builder to recover cost increases; or, if there is a drop in the price of materials, the builder should pass the cost savings onto the homeowner.
It is now mid-2022, there is an oil price spike causing inflation, building material supply is slow and prices are on the way up. If a building contract had a rise & fall clause it may have addressed certain relevant issues for the builder.
Cost adjustments are made according to a rise and fall formula generally based on monthly industry figures released by the Australian Bureau of Statistics and changes to CPI. The method for calculating any cost adjustment to a contract should be clearly stated on the front page of the contract.
Reference- NSW Fair Trading viewed 15/2/12, image source google
Como Building P/L, Michael Como provides in SYDNEY, an NSW Building Regulations Consultancy service that comprises, Interpretation of NSW legislation relevant to the construction of Class 1 and 10; Issuing: Complying Development Certificates (CDC), Construction Certificates (CC) [after a local council has approved a development], Occupation certificates (OC), Compliance Certificates, NCC Building Code Australia Reports. Engagement for the certification work is on a contract basis.
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