Browse Forums Building A New House 1 Jul 09, 2009 8:11 am Has anybody experience with this account and the conditions? We are almost done with all the paperwork which stands between us and the start of the build but opening this account with the builder is a bit of a hurdle for us. We already signed a statement that we are able to pay for the build, payed the 5% Deposit ages ago and now we have to deposit 15% (the final payment) of the total house price in this account. With the contract came a short information sheet which has been written in the style of Do This and Do That and a Instruction sheet for the bank branche. No conditions of this account were provided. Yesterday we went to a local Office of the providing bank where they were not able to inform us either. It seems that this specific account has been set up between a branche on the Gold Coast and the builder and that other branches are only to follow specific instructions and then send the bunch of paper plus money check to that specific branche. They could not answer questions like:" What happens if the builder goes bankrupt, what is the Interest. What happens if the build does not go well and we don't want to do that final payment, who will be the third legal party to sort it out" and so on. They just gave us the office number of the branche and we have to ring them and ask to send us the conditions if there are any. I know that there is no escape as the builder is not going to give a start date without the account opened and the money firmly in place, but it doesn't feel good as by doing so we already deposited 5% + 15% of the total sum and nothing has happened yet. The Sales Guy told us that the Interest would be low so we loose on that as well. It would be very supportive if you could let me know your ideas about it. Re: Joint Bank Account with builder 2Jul 09, 2009 9:30 am is this a standard thing in some places? I have never heard of it here and like you I would be uneasy, to say the least, about setting up a joint account with a builder - or any other 3rd party You lose all control of your finances if builder has direct access to your money With our builder, after paying a small deposit,(refundable if we did not go ahead) we signed a contract, subject to finance, that we would pay each installment at each agreed stage, when that stage was completed builder sent us a bill and we went in to credit union and arranged transfer of money to builders account which was with a different financial institution altogether. As far as I know, this is the normal way to do it. Re: Joint Bank Account with builder 3Jul 09, 2009 11:32 am As far as I know it is a standard condition in the contract (it was in ours), you can have it taken out. They will have to agree to take it out but.It is normally used for when you are supplying all the funds for the build (so no bank involved) & it's so that you don't spend the money that is to go to the builder. You must supply them with statements to show that you have the available funds. I would not put my funds in a joint a/c with someone that you didn't know & didn't know what their financial position was. We now have a blog. http://allaboutthebuild.blogspot.com/ Re: Joint Bank Account with builder 4Jul 09, 2009 11:38 am Yes, we did the same. A Joint Fixed Term Deposit between us & the builder (Eden Brae). THe account couldn't be accessed/closed unless signatures were provided by BOTH us & EB. The Term Deposit was held with the Commonwealth. Built the Eden Brae Cambridge 34 Family with Boston Corner Facade Re: Joint Bank Account with builder 5Jul 09, 2009 12:46 pm We had the condition taken out of our contract. We asked about it before we went to sign but it was still in the contract, I wasn't going to sign it with it in so they took it out. We now have a blog. http://allaboutthebuild.blogspot.com/ Re: Joint Bank Account with builder 6Jul 09, 2009 12:56 pm I would think that once the builder has a letter from your bank to say that you have the funds to pay for the contract, that should be enough for the builder. Why would you start paying loan interest on 15% more of the contract price - it's fiancuially rediculous. Show the the bank letter. That should be enough. Demolition August 2009, Construction Started September 2009, Completed December 2010 Re: Joint Bank Account with builder 7Jul 09, 2009 2:28 pm We only had to do that if we had the cash to pay for the whole build. Since we had half and were getting a loan for the balance we didn't end up needing it as we had the approval certificate from the Bank which was sufficient for the builder. Some things are worth waiting for. Re: Joint Bank Account with builder 8Jul 10, 2009 8:46 am Thanks everybody for your reply, very helpfull and I am checking all the paperwork that we signed, in order to find where we went wrong and if there is a way out.. We are supplying the total sum of money and can proof that the funds are sufficient but the Sales Guy told us that signing the Statement would be enough without proofing anything. He also told us that Coral Homes would not allow us to take anything out of the contract. As said we are very uneasy about this construction too and I just learned that the Interest is only 1.75%. WE CAN HAVE THE INTEREST, the letter of the builder says ! Now we got 7% . danma We had the condition taken out of our contract. We asked about it before we went to sign but it was still in the contract, I wasn't going to sign it with it in so they took it out. Is that Clause 8 you are talking about, Danma? I must say that I just assumed that this part was about the regular Progress Payments and did not ask any further, stupid isn't it. If this is the clause it says that we have to open the Security account on or before commencement and that we have to deposit money whenever the builder says that we have to do so. Re: Joint Bank Account with builder 9Jul 10, 2009 10:50 am There is no way known I would be doing this. I would be ensuring that the builder has the 'proof of ability to pay' they require, but I woul not be putting any money into a builders account. I would think that if the builder goes bankrupt, those funds, as they are partly in the builders name, would be subject to bankrupcy proceedings, and declared an asset of the builder. If you want to pay for processes in advance as a gesture of good faith by all means do so. Adrian B Re: Joint Bank Account with builder 10Jul 10, 2009 11:52 am danma We had the condition taken out of our contract. We asked about it before we went to sign but it was still in the contract, I wasn't going to sign it with it in so they took it out. Is that Clause 8 you are talking about, Danma? I must say that I just assumed that this part was about the regular Progress Payments and did not ask any further, stupid isn't it. If this is the clause it says that we have to open the Security account on or before commencement and that we have to deposit money whenever the builder says that we have to do so.[/quote] In our contract it is Clause 5, "Security Account & Ability to Pay" they have crossed it out but have written on the side that any variations that we requested had to be paid for in advance prior to site start. Let me know if you want all the info from the clause. I think that what Adrian B said is right if the builder goes under & his name is on the a/c what then happens to your money. We told them that we would borrow the money if they wouldn't take it out because we were not going to sign it. We haven't had any problems as soon as I get the invoice I pay it either by EFT or I put a bank cheque into their a/c. Tell them you are not happy with the clause & want it taken out. We now have a blog. http://allaboutthebuild.blogspot.com/ Re: Joint Bank Account with builder 11Jul 12, 2009 9:02 am Thanks Danma and Adrian B I am totally with you and wish we could go back in time but unfortunately we signed the contract so nothing can be taken out anymore. Rang the CSO but not opening the account means that the builder will not start building. So after communicating all this on Friday we took the papers to our bank and had the manager look at it. He told us that setting up a Joint Account between a business and other parties is not unusual and that there should not be any problem as long as the builder is financially healthy. So fingers crossed for that part. He advised us how to fill in the application form in order to make sure that the Account is in both names and that they can not touch the money without our signature. We are not going to leave that to the bank. Regarding the Interest rate I am going to write a letter to Coral because they state that this account offers a competative rate, which I feel is quite offensive. Our bank offers at least 3.5% for the same type of account. I am afraid that this is all we can do. It seems very clear to me that your contract states that a security account does NOT need to be established so the answer to the builder is NO. If in doubt find a contract… 1 8510 To my understanding early saw cuts are to control shrinkage cracks, so doing them now would be pointless. Control joints may reduce ugly cracking during periods of soil… 3 9862 Hi all I need a guidance on how far I need to space expansion joints in the concrete driveway and its type (keyway/foam.) 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