• Building flashback

    3. September 2013

    Hi there! As advised earlier this year, we want to share our experiences with JDL / Signature Homes with the wider public. This is only to help others not to make the same mistakes we’ve made.

    Below is our last communication with Brad Hay, Signature Homes‘ National Sales Manager, who asked us in early July 2013 to provide some feedback on the issues we’ve had during our 13 month building period. The feedback was sent on the 18th of July 2013, and unfortunately Signature Homes has since been unable to provide any kind of feedback to us. We did write them that we will publish our experiences on our website as well as link the blog to our Facebook pages to bring this at least to the attention of our friends who can share this link of course.

    We did take some of JDL / Signature Homes mission statements from their website and added our comments. This helped us to get a better understanding of what they promise and what they actually deliver.

    Hi Brad,

     as advised previously, we would like to provide feedback on our building experience with Signature’s franchisee JDL Concepts Ltd.

    Unfortunately our experience was not a very positive one. It is quite a long list of issues and we will also publish this experience on our website as we hope that this will protect other potential clients to go through the same experience.

     

    All issues can be documented through email communication, so please feel free to contact us, should you wish to seek any further input.

     

    • Issue 1 – Removal of Spoil:

     

    During contract negotiations, we have expressed our wish to remove the PC sum for excavation. JDL refused on the basis, that they cannot foresee if there might be any rocks until they have started the excavation. Should we insist on a fixed cost sum, they would have to price worst case scenario, which would be four times higher than the current PC sum. However, they are fairly confident that this is not the case as they do have a copy of the Geotec report. Reluctantly we have accepted this PC sum. Our contract also stated, that the excess spoil from the excavation of 104m³ will be spreaded across the site.

     

    Prior to the excavation start, JDL informed us, that suddenly they cannot leave the excess spoil on site as this would result in a big pile of spoil right in front of our house and as the excavation is a PC sum and removal of spoil had not been allowed for, we would have to carry the quoted removal cost of 4,657.50$. After several discussions, JDL then agreed as a sign of “good will” to carry half of the removal cost. Reluctantly we have agreed to this compromise as we didn’t want to hold up the project further.

     

    Once the excavation has been completed and the slab has been poured, JDL sent us an invoice for the removal of spoil of 13,600$ as now suddenly 403m³ had to be excavated and asking us as per our agreement to cover half of those cost. When trying to get an explanation why now 403m³ instead of the planned 103m³ had to be excavated, the response was that the original figure was only an estimate, the actual site conditions differ and the spoil expands when being transported from site (what a nonsense!).

     

    At this stage, we had to put a stop to the project and get our lawyer involved. After several communications between our lawyers back and forth, we scheduled another meeting with Dale Lightfoot – owner of JDL – to discuss this matter again as they still could not give us a sufficient explanation why the amount of spoil was now four times more. JDL finally admitted, that their project manager Mark van Diepen had decided to flatten the section and had all spoil removed without double checking with us or JDL’s management. JDL then agreed to stick to the original agreement of splitting the quoted removal cost of 5,000$ while they carried the cost for the rest.

     

    Due to this issue we have lost three months during which we had to pay rent and interest on the loan, we had lawyer cost and cost for an inspection report, not to speak of the emotional distress. Altogether we have had additional cost of 10,242.50$.

     

    Breakdown of additional Cost for us:

     

    2,328.75$ for removal

    1,000$ for lawyer

    5,280$ for 3 months of additional rent while discussions were on-going

    1,633.84$ for 3 months (Aug-Oct) interest on the building loan (which had been set on interest only during the build)

     

    Total Additional Cost = 10,242.59 $

     

    • Issue 2 -Retaining Wall:

     

    During contract negotiations we had discussed with JDL a requirements for a retaining wall. JDL advised that they do recommend to put in a retaining wall to the western boundary and the cost would be 5,000$. We have made it clear to JDL that under no circumstances we would want a retaining wall and asked them to provide a solution that does not require a retaining wall. JDL therefore moved the house a little bit and advised, that the slope to the western boundary would now be less than 45° and therefore a planted batter would suffice and a retaining wall would not be required yet still be recommended.

     

    Once the slab had been completed, a council inspector came to site and advised, that a retaining wall would need to be put in as the slope exceeds 45°. Signature provided us with a Variation of 10,000$ to install a retaining wall as this is not covered under the contract. This issue has also been provided to our lawyers and an inspector has been engaged who found that too much spoil has been excavated, resulting now in a steeper slope exceeding 45°. We were insisting on JDL to cover those cost as this is a fixed cost project and they have advised that no retaining wall is required. We have also queried, why the cost for the retaining wall have now doubled compared to their original quote and didn’t receive a sufficient response. The new quote provided by JDL for the retaining even included their 17.5% builders margin on top of the rest.

     

    Despite admitting that too much spoil had been removed, JDL refused to cover the cost for the retaining wall as they insisted that a retaining wall had always been recommended (while not been required). As the project had already been significantly delayed, we were paying significant interest for the loan and at the same time having to pay rent and didn’t have the financial backing to take this case for further legal actions, we were forced to cover the cost for the retaining wall. However, we decided to contract the retaining wall ourselves in order to avoid builders margin. JDL has advised us that no separate building consent would be required, however when checking with the council and the builder of the retaining wall, we were advised that both a building consent and a resource consent were required as the original building consent for the house did not include a retaining wall. We have lost another 2 months getting the documentation and the consents in place and faced significant cost. Altogether the issue for the retaining wall cost us 13,945.87$.

     

    Breakdown of additional Cost for us:

     

    586.50$ for inspection

    $2,444.89$ for building consent

    $1,302.94$ for resource consent

    4574.70$ for retaining wall

    230$ DHC Producer Statement

    3,520$ for 2 months of additional rent while while waiting for building consent the consent documentation

    1,286.84$ for 2 months interest (Nov,Dec) on the building loan while waiting for building consent (which had been set on interest only during the build)

     

    Total Additional Cost = 13,945.87$

     

     

    • Issue 3 – Contract Management

     

    We went for a turn-key project as we didn’t have time to do the project management ourselves due to our work commitments, however in the end we have spent so much time managing our project managers, writing emails to document everything that has been discussed (as the project managers usually chose not to remember things that had been agreed on site), that we could have done the project management ourselves. Overall, the whole project management was unacceptable, which is especially disappointing considering that Signature doesn’t do anything else apart from project management, all other work is being subcontracted.

     

    When signing the contract, JDL informed us that the actual building time once the consent has been issued, will be 16 weeks including slab, a guaranteed completion date however can only be given once the slab is down. After above issues 1 and 2 were “resolved” and JDL picked up the project again in January 2013, we received a Guaranteed Completion Date (GCD) of 26 weeks, despite the slab already being completed (so should have been only 14 weeks). This is almost double the originally quoted building time. According to JDL they had to allow for some contingency – 12 weeks?

     

    Despite the large contingency and perfect weather for the first 3 months of this year, JDL tried repeatedly to extend the GCD on the basis of bad weather. We have refused to accept any extension as the delay was not due to bad weather but rather due to very poor project management. The project manager was on site maximum once a week and just the framing and gibbing alone took more than 3 months, the interior and exterior painting another 8 weeks. The subcontractors were inefficient and not organized at all, i.e they did not show up on site and when informing the project manager, he was unaware of the fact. When checking the progress with the project manager, the “bad weather” was constantly blamed. However, houses in the same area started after we did and finished earlier. It seemed as if it had only been raining above our house, because the rest of NZ complained about impending draughts.

     

    We have repeatedly asked for a project schedule, but have been told by the project manager, that “we don’t have a project plan and work on a day to day basis as we never know what’s coming the next day”. As we had organized a couple of contractors directly (tiling of the bathrooms, flooring and kitchen), the constant delays resulted in our contractors being pushed around again and again. Appointments were being postponed a day before our contractors were due to start, thus affecting their other job commitments and seriously damaging our relationship with our contractors.

     

    Also the project manager was not entirely familiar with the project and did not communicate all required information to the subcontractors. This resulted in issues and additional cost, which of course JDL refused to carry. Example are the door frames: When our tiler went in to do the tiling, he noticed that the door frames were thinner, not sufficient for fully tiled bathrooms. When pointing this out to JDL, they told us that we should have informed them that we want thicker doorframes. The thickness of the doorframes is not specified in the contract, yet it is clearly states that we will have fully tiled bathrooms. As we are no builders, we wouldn’t have been aware of the fact, that the door frames are usually thinner if the rooms are not fully tiled. However, as the professionals we thought JDL to be, they should have been aware of the fact that thicker door frames would be required. When talking to the framing company, they were unaware of the fact that we have fully tiled bathrooms as the project manager did not communicate this information to them. The tiler had to lay a tile edge trim around the door frames, which is not very pleasant to look at and resulting in additional cost of 454.88$

     

    The same issue arose for the hardwood floor in the living area. The folding doors were installed at carpet height despite the fact that our plans clearly indicated hardwood flooring. The resulting cost to remedy this are not yet know to us as we had to postpone rectification due to budget constraints.

     

    The Communication with the project manager was very slow and sometimes extremely rude i.e. see email excerpt from project manager when trying to get some commitment on when our subcontractors can finally start working after being pushed out several times:  “The very thing I have just said in my email, now I am pointing the finger. ALL YOUR CONTRACTORS CAN STOP CONTACTING ME I WILL CONTACT THEM WHEN I AM READY”

     

    Day to Day planning / No project planning resulted in the project manager needing material/products immediately i.e. the plumber showed up on site and we received a call, that the bath tub would need to be there the next day so the plumber can dry-fit the tub. We had then to rotate and trying to organize delivery to site within short notice.

     

    Other issues included changes to the plans being made without discussing with us first i.e. electrical changes were just done as the original plan apparently didn’t work out, contractual items were “accidentally” left out and couldn’t be rectified once noticed i.e. waste in the bathroom has been forgotten but as the bathrooms were already tiled, there was nothing that could have been done.

     

    Overall, most project management issues probably arose due to having 3 different project managers throughout the build and the project manager being absolutely overworked. At the time, they had 19 projects with only 3 project managers!

     

    In regards to site meetings, JDL showed absolutely no flexibility to suit our work schedule. Every single site meeting had to be done during our working time and often were scheduled at the last minute i.e. we have been informed at 10pm! that we would need to inspect the driveway framing by 12pm the next day, otherwise it would be deemed accepted.

     

    Total Additional Cost = 454.88$

     

    •  Issue 4 – Building Quality

     

    As we have just moved into our house just a bit over a week ago, we cannot comment much on the quality yet. However, when doing the shelving in the wardrobes, we have noticed that all walls are crocked and uneven. It is impossible to get two of the same sized shelves in one wardrobe. Every single shelve has to be reworked and adjusted, which is extremely labour intensive. Also the first interior lights already failing after only being 1 week in the house. We hope that those will remain the only issues, but somehow have the feeling that there is more to come…

     

    • Summary:

     

    Signature has a lot of promises on their website:

     

    –          “Our name has become synonymous with uncompromised design, quality and service, and our entire network is committed to the constant improvement of the services we offer.”

    • JDL was too busy blaming others for their mistakes and have definitely not worked on trying to improve

    –          “And if you’re too busy to come and see us during working hours, we are more than happy to come and see you after hours.”

    • Not a single appointment has been agreed to after hours or on weekends

    –          “As well as our 300-point Quality Management Programme, Signature Homes have developed purpose-built, internet based project management software, which records the entire building process, sets time frames and tracks and centralises data. We call this system The Signature Way and the data it collects is constantly analysed in order to benchmark and improve our performance.”

    • Really? We have never seen or heard anything of this software

    –          “Just satisfying our clients isn’t enough; our aim is to delight them with every aspect of our service and every detail of their new home.”

    • See issues above, we were definitely not “delighted”

    –          “These include a Fixed Price Guarantee (before any work commences), a No Hidden Extras Guarantee”

    • See points raised above, JDL refused to give a fixed cost, additional cost of 24k do not qualify as fixed price guarantee being met

    –          “a Guaranteed Completion Date”

    • While this has been met in the end, the GCD has allowed double the normal building time to allow for contingency and even then still tried several times to extend

    –          “a Satisfaction Guarantee”

    • Cannot claim to be satisfied

    –          “Our mission is not only to create a new home that you and your family will love living in, but to make the whole process of creating it an easy, exciting and thoroughly enjoyable experience, too.”

    • We can certainly say, that this has not been achieved!

     

    Unfortunately not a single promise could be achieved for our project. While we are happy with the end result and really like the house, it was an extremely stressful and emotional time, not to speak of the unplanned additional financial burden of 24,643.34$. We will definitely not build with Signature Homes again and won’t be recommending Signature to our friends and colleauges.

     

    We hope that you have made it till here, I know it is a lengthy email, but I believe that Signature needs to be aware of how their franchisee’s are operating and as JDL is operating under the Signature brand, this reflects badly on Signature.

     

    Regards,

     

    Jana & André Greissner

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