Browse Forums Home Finance 1 Jan 20, 2014 7:14 pm Hi Guys, We are at the stage where we have been provided a letter of commencement for our new home. Bank has lent us 75% and this is stated in the letter. Builder wants a bank statement as proof that we can make up the other 25%. I feel uncomfortable about this as it shows them how much they could charge us in 'unforeseen costs or variations'. Is there another way? A quick reply would be appreciated. Thanks. Re: Letter of Commencement, additional funds proof 2Jan 20, 2014 8:13 pm Do you have more than one account? Put the exact amount that is required for the build in that account and send a copy of the internet statement which shows that exact amount only. They don't need to know how much you have beyond this. My Building Thread:https://forum.homeone.com.au/viewtopic.php?f=31&t=66153 Re: Letter of Commencement, additional funds proof 3Jan 20, 2014 8:57 pm arauch Do you have more than one account? Put the exact amount that is required for the build in that account and send a copy of the internet statement which shows that exact amount only. They don't need to know how much you have beyond this. This is what I was going to suggest. They only need to know you have the amount not anything else. Researching a build in South Australia from Sydney. Re: Letter of Commencement, additional funds proof 4Jan 20, 2014 9:16 pm ...we only have one account.. linked to everything (to reduce those greedy bank fees!) One would think the simple fact the bank gave you a loan based on a tender that it be enough. And it's kind of pointless asking for a bank balance, when anyone could go blow it all on a trip, new car or whatever the very next day! Re: Letter of Commencement, additional funds proof 5Jan 20, 2014 9:29 pm Set up one of those online high interest accounts- ing, bankwest etc most banks have one probably even yours, they pay around 5% and no fees. Given its linked to another bank account they're simple to set up. Drop the 25% in there and print off a statement. http://camdenbuild.blogspot.com.au/ by invite only please pm me Re: Letter of Commencement, additional funds proof 6Jan 20, 2014 10:19 pm Good advice by Robbie. But it's very interesting.... our builder requires large financial contributions from the owner to be put into a new joint builder-owner account they needs both signatures to withdraw from. I understand why now. Build thread: viewtopic.php?f=31&t=65085 Re: Letter of Commencement, additional funds proof 7Jan 21, 2014 8:36 am EmyN Good advice by Robbie. But it's very interesting.... our builder requires large financial contributions from the owner to be put into a new joint builder-owner account they needs both signatures to withdraw from. I understand why now. That sounds like a very scary proposition. High interest accounts are ok, but in practice it's still better to put excess funds into an offset account. The benefit being that you are receiving the interest rate percentage as a payment against your loan, and is usually a higher percentage that you would receive from a savings account. I've asked the bank if they could draft a letter, but given the refinancing problems with them from day one I won't be holding my breathe Re: Letter of Commencement, additional funds proof 8Jan 21, 2014 9:28 am Why don't you get a letter from your bank manager stating that the account has in excess of the required amount (without specifying how much). That should do. Foremost Building Expert in Australia,assisting with building problems/disputes, building stage inspections,pre-contract review advice for peace of mind 200 blogs http://www.buildingexpert.net.au/blog Re: Letter of Commencement, additional funds proof 9Jan 21, 2014 3:01 pm building-expert Why don't you get a letter from your bank manager stating that the account has in excess of the required amount (without specifying how much). That should do. This is what I was going to suggest, or a Stat Dec declaring that you have in excess of $$$ in your bank account. I wouldn't be handing a bank account over to anyone ... I also wouldn't be setting up a joint account with a builder Re: Letter of Commencement, additional funds proof 10Jan 21, 2014 3:42 pm Hi EmmyN You wrote: " our builder requires large financial contributions from the owner to be put into a new joint builder-owner account they needs both signatures to withdraw from. I understand why now" It looks to me your builder is way over. Proof of finance means just that (proof that you have your money in the bank) it normally does not entitle builder to insist on joint account or anything more I don't know what's in your contract but if anything like that was in there I would have recommended that it be struck out. This is why your most important inspection is contract review. I am just trying to help someone who overpaid the builder over 100K(by frame stage) because no one looked over the contract and the progress payment schedule and the contract was wickedly loaded, and now all that is not even half of their problems. If you sign off on a bad deal? Tough Luck I would be very careful EmmyN Foremost Building Expert in Australia,assisting with building problems/disputes, building stage inspections,pre-contract review advice for peace of mind 200 blogs http://www.buildingexpert.net.au/blog Re: Letter of Commencement, additional funds proof 11Jan 21, 2014 4:07 pm We're not actually going that route BE - I was just saying that's what they ask for if the owner is contributing a big amount. I can understand why they wish to secure it. As Marmalade says, otherwise it could go to other costs/commitments the owner may have and is no guarantee of the owner actually being able to contribute the amount they've said they can. It'll only be for the 4 months or so of the build and it's a pre-agreed amount so I think it's quite reasonable. Otherwise I could imagine the company would be left with half finished houses from people who someone didn't have their contribution available as they said they would. Build thread: viewtopic.php?f=31&t=65085 Re: Letter of Commencement, additional funds proof 12Jan 22, 2014 7:40 am BE, as always, has good advice. Pays to take a week to fully understand your contract, don't rush things and ask plenty of questions. If in doubt seek professional assistance as builders have seemingly huge legal resources to ensure everything will be in their favour (even if they are the ones at fault) Our current problem was fixed (with the assistance of the bank) by temporarily moving the required funds to an account and printing off the statement, then moving them back to the offset, where they will remain until handover. 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