Hello Everyone,
Just trying to get some guidance for a situation that we currently are in.
We are building our second home in VIC through a volume builder (not Porter Davies) and our construction loan is through NAB.
Our HIA contract amount is $430K and our colors selection + upgrades etc have been captured as part of the post-contract variations amounting to $40K, so the total construction cost is $470K.
When we applied for the construction loan with NAB we provided all the documents including the HIA contract + Signed Post contract variations for the total amount of $470K and asked for 80% of it = $376K which was unconditionally approved as well.
House construction just finished the frame stage. Until now we have made Deposit + Slab + Half of the Frame stage progress payment out of our pocket as part of our contribution.
I sent all the requested documents to my Broker for NAB to release the first progress payment from their end. NAB has come back and advised that the VMIA (Domestic Building Insurance) amount that my builder has provided is only for HIA contract amount of $430K which is underinsured as NAB would like to see an insurance amount of $470K which is the total construction amount.
I've gone back to my Builder and advised them of the above to which they are advising me that they can only take out VMIA DBI insurance based on the HIA contract amount ($430K) as the post-contract variations ($40K)are not included as part of the HIA contract and there is no way they can amend VMIA DBI insurance amount on an existing policy etc.
I would also like to highlight that Builder is sticking with the HIA payment schedule and will ask for Post contract variations in the final payment. Their invoices have been based on HIA payment schedule so far. So their final invoice would be the Final payment as per HIA payment schedule + $40K post-contract variations.
My Broker is trying to work with NAB to resolve this issue however it's just making us a bit anxious. I would like to know from any fellow members or experienced Mortgage Brokers what could be the possible solution(s) for this situation. I would really appreciate helpful guidance or point in the right direction.
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Browse Forums Building A New House Re: First Progress Payment and DBI insured amount 2Apr 03, 2023 9:22 am Designer,Engineer (Civil,Const & Envir),Builder,Concrete & Masonry Contract.Struct Repairs  02 Apr 2023 2 New Poster Re: First Progress Payment and DBI insured amount 3Apr 03, 2023 9:27 am Wanted to update anyone following or for future reference - My superstar Mortgage Broker was able to resolve this issue along with NAB and they've now released the payment. Lesson Learned - Always make sure that your builder includes the total construction cost including all the variations in the HIA contract and then insures HIA contract amount for Domestic Building Insurance to avoid any hassles like this Re: First Progress Payment and DBI insured amount 4Apr 03, 2023 9:38 am Don't worry about what the super star salesman says get a copy of the new insurance certificate OT, If the builder goes broke your out of pocket $40K That's how it works here in WA Designer,Engineer (Civil,Const & Envir),Builder,Concrete & Masonry Contract.Struct Repairs 04 Jun 2014 818 NSW Gold Member Re: First Progress Payment and DBI insured amount 5Apr 03, 2023 9:59 am  StructuralBIMGuyDon't worry about what the super star salesman says get a copy of the new insurance certificate OT, If the builder goes broke your out of pocket $40K That's how it works here in WA nothing to do with salespeole. you'd do well to read and ccomprehend the post before bashing away at the keys with some negative comment again. 10 13426 Sorry to hear. All the advice you are going to get on this one comes down to what your contract says and what variations are allowed and the mechanism for them. For… 1 10731  If the eaves are fixed first, the eaves line is about 250 mm below the top plate of wall frame. If the cladding ie hebel stops just under the eave line, then that means… 2 42195 |
