Fixed Price v Charge Up

In New Zealand, there are two types of building contracts used; fixed-price contracts and charge-up (also known as cost-plus-margin contracts)

Deciding which one can be a hard decision, as they both have their advantages and disadvantages. It is vital that you understand the differences between charge-up and fixed price before agreeing to work with a builder. We here at Next Level Construct recommend fixed-price contracts, as these include every detail of your build and give you certainty of what your build is going to cost.

Fixed-price contracts

With exception to client instructed changes or unexpected site issues, Fixed-price contracts let you know the final build cost at the outset.

Next Level Construct has two Quantity Surveyors that work in-house. Using their expertise and experience with residential construction, we can ensure that your quote is as accurate as possible, based on the plans and information you provide us. These quotes do take time to prepare, we may spend anywhere from 30-60 hours to accurately price a large project.

Fixed-price contracts are increasingly being asked for by the banks, so if you require finance, keep this in mind when reviewing builder’s quotes.

Charge-up contracts

Charge-up contracts are basically an educated estimate of the project cost before you start. These are based off square metre rates for the type of project and previous experience. The figure given is more of an indication of cost than a fixed sum.

This type of contract includes the builder’s cost price of all materials and sub trades plus the builder’s margin. Exceptions and ‘tagged’ items may still apply to this type of contract.

Starting with only an estimate does mean it’s harder to know what the exact final cost will be at the end, and often projects working on a charge-up basis will overrun both time and budget.

In summary

Next Level Construct always aim to deliver your project on time and on budget. We will organise everything from contractors through to the final inspection for you, so you don’t need to run around gathering further quotes for trades or worrying about orchestrating them all – you can leave all of that to us and it will all be outlined in your contract. Furthermore, your contract with us allows you to take advantage of our industry discounts on materials and trades, so you get the best price possible.

We also understand your thoughts and ideas may change as you start to see your build take shape and that’s ok – you can still make changes to a fixed-price project as it progresses if need be. We will discuss your options with you at the time and what this will mean regarding your contract..