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Housing on paper: Who pays the bride if the cost increases

Housing on paper: Who pays the bride if the cost increases

28.03.2022

There is confusion among property buyers who signed housing contracts prior to the start of a building cost increase or intensification rally as to how to allocate the additional costs.

Recall that the growth of the price index for building materials began in December 2020 and continues every month, fixing an upward trend that is almost impossible to stop.

What are the contracts

They asked who will bear the additional costs of acquiring a new home (house or apartment), for which an agreement was concluded between the buyer and the developer with data from 2020 or the first months of 2021, when prices for construction products were lower than today, OSEOK President Stelios Gabriel emphasized that the provisions of the contracts must be respected.

“If there is no clause in the contract signed by both parties to justify the increase, then the land surveyor should bear the costs,” he explained, adding that the data gets more complicated if the buyer chooses more expensive materials.

The trap… material changes

For example, if the contract provides for a certain range of material costs, but the buyer wants materials with a higher price and the order is filled at current prices, then he must bear the difference, Mr. Gabriel said.

It is worth noting that in some construction products, such as metals, the growth compared to December 2020 reaches an incredible 130%, and for products such as aluminum, it reaches 70%.A good example is the cost of iron, which has jumped from 450-500 euros per ton at the end of 2020 to 1070-1100 euros per ton today.

Buying a home is an expensive dream.

Contractors estimate that the cost of acquiring a low/mid-value house worth around €200,000 as of 2020 could increase by €25,000 according to current data.

In this regard, the situation is difficult for potential home buyers, who are called upon to either seek additional funds to cover the increased construction costs, or reduce their requirements and desires by choosing materials that do not satisfy them.

Source and photo: www. inbusinessnews.reporter.com.cy.com, Editor estateofcyprus.com
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