Browse Forums Building A New House 1 Nov 05, 2009 8:18 am Hello all, We have just received our final invoice in the mail from our builders. House has for the most part been completed, 2 months ahead of schedule, and have a walk through set in next week for handover. We've had a great ride so far, but are foreseeing a possible issue with the bank that we would like to get your thoughts on... Our building contract is say 200K. We have allowances written into the contract for 10K for turfing, fencing etc. and there is a note under each of these in the contract stipulating that each will be supplied and installed by building owner after handover. I have queried this with the builder and they advise that they take the final payment from the bank and issue a cheque to us for the allowance amount. They advise this is standard practice. We've just received the final claim statement, invoicing the final stage to the amount that equals 200K, to be sent to the bank. But they have actually included the deduction of allowance on that claim statement. Just to be a little more clearer...there is a column titled Amount Invoiced and under these are all the invoiced stages (including final for say 20K), which adds up to 200K, and then they've added a -$10,000 for building variation at the bottom, and have TOTALLED the amount invoiced to $190K. Now this is where I think we may run into a problem. Because the contract/loan is for 200K, and even though the Final Stage request is for $20K (remember totalling 200K) is the bank going to look at the Total figure of 190K and say well why are we giving you 20K for final, and not only 10K?? The builders seem to think that's fine, and standard practice. I am not so sure, and we need that extra money from bank. Any input would be appreciated, and apologies for the long explanation. Re: Thoughts please! Final Stage invoice & bank query 2Nov 06, 2009 4:38 pm So it seems you are technically borrowing $10K more than what the cost of the build amount is. From what I understand you are wanting $10K for extra expenses-say fences, gardening, drive-way and so on..... With my bank we are borrowing a bit more than the actual build cost but any remaining 'credit' will be going back into the loan for us to use as a re-draw facility for those extra expenses etc. Sounds like you are doing something similar and I don't see how this would be a problem....however, maybe your bank is going to credit you that extra $10K into your mortgage so you can access it. It should have something mentioning any extra funds in your loan documents. Re: Thoughts please! Final Stage invoice & bank query 3Nov 06, 2009 4:53 pm Talk to your bank and get them to clarify the situation. You may find that they'll just credit your account with the leftover funds. We had an amount undrawn after the final payment to our builder, due to some building variations, and the bank simply transferred it to our account a few days after handover for us to spend however we liked. Re: Thoughts please! Final Stage invoice & bank query 4Nov 06, 2009 8:54 pm Thanks for the replies kek and Dollar. Originally the builders were going to get some subbies in for us to perform the work but when we went back through the contract, noticed that they had noted for each allowance item, "Owner to organise fence/driveway/turf after build". So yes, essentially we are borrowing 10K more than build cost. The builders said they would just invoice the bank for the total (including allowances), and then issue us a cheque back to us for the 10K. They said this is common practice?? I didn't see this as a problem until we received the final invoice with the negative 10K included, and figures not adding up on paper (the 190K Total Invoiced amount instead of 200K). We thought the bank might get a bit iffy at this discrepency. We spoke to our builders again and they have agreed to do up another invoice for the banks purposes, omitting the minus 10K, with Total Invoiced amount 200K. This suits us fine. Hopefully once the bank does the final eval, they'll hand over the final stage monies and everyone will be happy! Re: Thoughts please! Final Stage invoice & bank query 5Nov 06, 2009 10:29 pm yeah chicky, i think the builders just made a mistake when they issued the $190K invoice, they just don't want to admit it!!! ( A Builder, not admit a mistake - NEVERRRRR!!! haha) A thankful person is a happy person. [/color]My hobby design blog: http://aviewondesign.blogspot.com/ Hi, I am approaching end of the build. My final invoice will be given to me soon to pay. Some context before I ask my question. 1. My builder wont do the landscaping or… 0 3870 2 7209 There is no reason why building contract reconciliation cannot be done prior to handover, if the builder won't do it get someone to do it for you. Why would you pay for… 3 6690 |