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Building my home > After registration
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What is a progress payment?
As work on your building progresses, your builder will require payment. We will make these payments based on the estimated cost of building work completed, and after receiving a request form from you.
The payments are calculated by ensuring that sufficient funds are retained to complete the building. Our assessors will estimate the value of the work done and calculate the amount of money that must be retained to complete the contract.
Neither poor workmanship nor building material on-site will be paid for. If your progress payment request is greater than the amount of work our assessor finds completed, we will pay out the assessor's estimated amount.
Never sign a blank progress payment form and hand it to the builder.
Bear in mind that the bank requires the original signed and completed progress payment request form at least five working days prior to the date of expected payment.
What additional amounts am I liable for?
There are usually three to four progress payments that must be made before your house is complete - and interim interest calculated on those amounts is payable over and above your loan.
You should make partial payments to cover the interim interest as soon as the bank has made the first progress payment. Alternatively, you must make provision to cover the interim interest since this can add up over the building period.
If you don't cover the interim interest costs, you will need to find a portion of the final progress payment from other funds - the interim interest will have used up part of the loan that we initially granted.
Is a Building loan shortfall likely?
Please bear in mind that progress payments will be based on our estimated cost and this may differ from the actual costs. You should therefore make funds available before you start building, to overcome a possible shortfall.
A shortfall may occur in the following instances:
- When our estimated cost of what it will take to complete the building is higher than the
contract price quoted by the builder
- When the loan applied for by the client is less than the contract price
- Due to a combination of the above
Where there is a shortfall, the Bank requires having funds from other sources and these funds must be applied to the property prior to the Bank considering progress payments against the bond. The Bank will not pay nor take cognizance of materials unused to the property.
What are the procedures for final payment?
On completion of the contract, when the builder calls for final payment, inspect the house to ensure it has been completed to your satisfaction. You will be requested by the bank to sign a letter of satisfaction, advising us that you are satisfied with the completed house.
Never sign a blank letter of satisfaction for the builder.
In addition, a signed copy of the certificate of occupancy, which is obtainable from the local authority - and any other documents requested in the letter of grant - must be forwarded to us before we will make the final progress payment.
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