Browse Forums Building A New House Re: HIA Subject to Finance Clause - Builder Will Not Change 2Jul 06, 2009 6:04 pm the fact is that they *have* changed the HIA contract anyway, that clause is not standard. If you are willing to walk away if they don't change it, then you have to make it clear to them that you are very serious and will walk. If you are just hoping that they will take your bluff, then you can try but be prepared that they might not do it. Built with Bentley homes in Doreen All moved in Dec 2009 Now for the garden! Our stuff so far viewtopic.php?f=31&t=16532 Re: HIA Subject to Finance Clause - Builder Will Not Change 3Jul 06, 2009 7:13 pm This one is simple. You have a contract ready to sign. You don't have finance finalised. Wait until finance is finalised then sign contract. Everyone happy. Demolition August 2009, Construction Started September 2009, Completed December 2010 Re: HIA Subject to Finance Clause - Builder Will Not Change 4Jul 06, 2009 8:12 pm I wish it was as simple as that Our lender wants to see an 'executed' (signed) fixed price contract before providing unconditional approval I wonder what the *real* standard clause 7.1 says? Again, I can't believe we're the only ones who've picked-up on this Re: HIA Subject to Finance Clause - Builder Will Not Change 5Jul 06, 2009 8:16 pm We're in VIC, clause 7.1 in our contract reads... "The builder is to ensure that a copy of that insurance policy is given to the owner within 7 days after it is issued." Re: HIA Subject to Finance Clause - Builder Will Not Change 6Jul 06, 2009 8:20 pm aaron4erin We're in VIC, clause 7.1 in our contract reads... "The builder is to ensure that a copy of that insurance policy is given to the owner within 7 days after it is issued." Ours is a QLD contract Clause 7 is "Evidence of Capacity to Pay" 7.1 "This contract is not subject to finance" Seems a bit strange TBH. Re: HIA Subject to Finance Clause - Builder Will Not Change 7Jul 06, 2009 8:24 pm pvfc1876 I wish it was as simple as that Our lender wants to see an 'executed' (signed) fixed price contract before providing unconditional approval I wonder what the *real* standard clause 7.1 says? Again, I can't believe we're the only ones who've picked-up on this Take the unsigned contract to the bank. Tell them your problem. Do it face-to-face. I'm sure they will come up with a risk free solution. Demolition August 2009, Construction Started September 2009, Completed December 2010 Re: HIA Subject to Finance Clause - Builder Will Not Change 8Jul 06, 2009 8:27 pm We have a clause 13... "Owner must provide essential information. Satisfactory evidence of the owners capacity to pay the sum of the contract price and where moneys are to be borrowed satisfactory written evidence that any loan has been approved by the lending body and that the mortgage documents have been signed". We haven't signed mortgage documents yet, as we need to sign the contract first. The bank (CBA) will then do the valuation and hopefully provide the unconditional approval. Re: HIA Subject to Finance Clause - Builder Will Not Change 9Jul 06, 2009 9:19 pm Hi We are building in VIC. Our HIA contract clause 8.0 says: If an amount is inserted in Item 11 of Schedule 1 then this Contract is conditional upon the lending body providing to the Owner written approval of a loan of at least that amount in order to enable the Owner to pay to the Builder the monies which become payable under this Contract, such approval unless otherwise stated in Item 11of Schedule 1 to be provided within 14 days of the date of this Contract. The owner promises dilligently to pursue such written approval. So, I think the HIA contract in VIC have subject to finance clause. Happy to discuss, Stephen Williams Landing Stage 10 - Kingwell Neighbourhood Re: HIA Subject to Finance Clause - Builder Will Not Change 10Jul 06, 2009 9:47 pm Hi There is only one clause in our QLD (HIA QC1 April 2001) contract which covers finance and it's entire contents are as follows: Clause 7 - Evidence of Capacity to Pay 7.1 This contract is not subject to finance 7.2 As soon as is practicable after the date of this contract, the owner must give to the builder evidence, to the builders satisfaction, of the owner's capacity to pay the contract price by the progress payments and at stages specified in schedule 2 7.3 From time to time if requested by the builder, the owner must give to the builder evidence, to the builder's satisfaction, of the owner's capacity pay to the builder the balance of the contract price, adjusted by any additions or deductions made under this contract 7.4 Where the name of the lending body is stated in item 9, the owner must use best endeavors to sign all documents and do all necessary acts necessary to obtain: a/ approval from the lending body on it's usual terms for a loan of an amount sufficient to enable the owner to pay the contract price; and b/ a notice from the lending body to the builder that all documents relevant to the loan are completed and that construction of the works may commence 7.5 If the owner does not obtain: a/ approval under subclause 7.4(a); or b/ the notice under subclause 7.4(b) then the owner must give the builder written evidence, signed by the lending body, as to the reason for the failure. Clearly, a clause similar to the one contained in FND's (Stephen's) contract is what is required by ourselves, and I'm at a total loss as to why our builder would think that omitting something as essential as this would be acceptable. It just doesn't 'smell' right to me and I'm surprised because the builder has been as good as gold so far. Re: HIA Subject to Finance Clause - Builder Will Not Change 11Jul 06, 2009 10:27 pm pvfc1876 aaron4erin We're in VIC, clause 7.1 in our contract reads... "The builder is to ensure that a copy of that insurance policy is given to the owner within 7 days after it is issued." Ours is a QLD contract Clause 7 is "Evidence of Capacity to Pay" 7.1 "This contract is not subject to finance" Seems a bit strange TBH. I'm really unsure as to what the builder thinks that they will achieve by forcing you to go through with a contract if you don't have the finance to pay for it - what's the point in that? Just seems stupid by the builder. I would NOT be signing 'A bottle of wine contains more philosophy than all the books in the world.' Louis Pasteur Vegie garden: viewtopic.php?f=19&t=27637&start=0 My Backyard Adventure Re: HIA Subject to Finance Clause - Builder Will Not Change 12Jul 06, 2009 10:37 pm I have not reached Contract stage with Coral yet so I can't directly comment on this. However I understand your concern. I'm hoping some of the H1 members who have already recently signed their contracts with Coral can give their opinions on it. I hope you sort it out as it sounds like you really want to go ahead with it but need to get over this speed bump. Re: HIA Subject to Finance Clause - Builder Will Not Change 13Jul 06, 2009 10:59 pm I wouldn't be signing the contract either. Good luck and be sure to keep up updated. Our contract actually says that we need to provide confirmation of loan approval within 14 days of signing the contract. We've had this amended as it's unrealistic for us to have the loan approved within 14 days. That said, our contract IS subject to finance. Our house thread: https://forum.homeone.com.au/viewtopic.php?f=31&t=18335 Re: HIA Subject to Finance Clause - Builder Will Not Change 14Jul 06, 2009 11:52 pm hi there i HAVE signed contracts with coral and was happy to do so as, although the 7.1 states that the contract is not subject to finance, 7.5 simply states that if the owner cannot obtain unconditional finance approval then they must provide written evidence signed by the lender stating the reason for the failure...they cannot hold you to a contract if the funds are clearly not available for you to fulfill that contract. However, for example, if the valuation came in $10,000.00 short then coral may be able to ask that you remove some items from the contract in order to still meet the contractual agreement - but if you're $100,000.00 short then obviously thats a different story coral also requests preapproval docs and/or stat dec as proof that you have this at contract signing - otherwise they could be preparing docs and spending time doing work for customers who may not have even obtained preapproval for their finance...obviously a waste of everyones time and money. also, in regards to the valuation - i compared and i compared and for the same size house with the same inclusions no one could even get close to coral - best was still $35,000.00 more so as long as you have preapproval and have not gone overboard with your home and inclusions then i am personally not overly concerned...maybe i'm naive but this contract clause is not clear cut - and 7.5 is the loophole... 2014 - Prepping to build the Soho 4 with Plantation homes, industrial style 2009 - Built the Brampton with Coral Homes viewtopic.php?f=31&t=15399&start=280 Re: HIA Subject to Finance Clause - Builder Will Not Change 15Jul 07, 2009 5:57 pm Jess09 7.5 simply states that if the owner cannot obtain unconditional finance approval then they must provide written evidence signed by the lender stating the reason for the failure...they cannot hold you to a contract if the funds are clearly not available for you to fulfill that contract. I'd be careful assuming that 7.5 is your get out clause. All it says is that you have to provide written evidence - That's it. It doesn't say anything about that written evidence being used to cancel the contract. Perhaps it's implied that the builder will cancel the contract. I mean they wouldn't bother to get written evidence if they plan to sue you for breach of contract. But that'll be at the discretion of the builder, it'll be their choice, rather than because they are legally bound. Morally you'd hope the builder wouldn't persue you. If they did though you'd have no argument based on 7.5 that the contract can be cancelled due to lack of funds. Re: HIA Subject to Finance Clause - Builder Will Not Change 16Jul 07, 2009 7:00 pm fair enough, good argument morally we would all hope that they would not pursue a contract that you do not have the funds to fulfill - legally they probably have every right to, but they would also end up on today tonight and current affair and would come out of it all with a name like Dixon... pvfc1876 - what have they said will happen if, for example, your circumstances change between contract signing and unconditional finance approval (lets say you lose your job) and you are no longer able to fulfill the contract? 2014 - Prepping to build the Soho 4 with Plantation homes, industrial style 2009 - Built the Brampton with Coral Homes viewtopic.php?f=31&t=15399&start=280 Re: HIA Subject to Finance Clause - Builder Will Not Change 17Jul 07, 2009 7:16 pm Thanks for the replies folks As I see it, there are two issues here: 1. The construction of the house if the finance falls over 2. The builders rights if the finance falls over. Clearly the house will not get built if finance falls over. Fair enough. We do not have an issue with this. Our issue is that there is nothing in the contract to state that we would not still be liable for the value of the contract in the event of finance falling over. I certainly do not see clause 7.5 as a "get out". This clause merely states that in the event of finance approval not being granted then the borrower needs to provide proof of this to the builder in the form of a "reason for rejection" letter from the bank. Nowhere in this clause or elsewhere in the contract does it say that the builder won't still come after you for the value of the contract. Anyway, having spoken to a supposedly "senior" member of staff at the building company today, and having been told umpteen times about the builder's wonderful reputation and how they build over 1000 houses per year without issue, when it came to them getting them to supply their "we will not chase you for the money if you are unable to obtain unconditional approval because we don't want to spoil our reputation" promise in writing, they refused to come to the party. This, coupled with the fact that they refuse point blank to amend the finance clause and even went as far as saying that "if you don't believe what I'm telling you then it might be better if we go our separate ways" doesn't leave the best of tastes in the mouth. As someone above posted - "what are they trying to achieve by asking us to sign a contract if we do not yet have unconditional finance approval?" Maybe, in the current financial climate, only customers with unconditional approval are seen as "genuine contenders"? Next stage for us is to see if we can obtain the necessary pre-approval based on providing the bank with an unsigned contract, plans, spec sheets, pay slips, bank statements etc etc If not, then we'll be looking at an alternative builder - with a proper finance clause! Re: HIA Subject to Finance Clause - Builder Will Not Change 18Jul 07, 2009 7:51 pm obviously the whole situation has been very negative for you and i feel very sad that something like this has dampened your excitement will your lender not issue conditional finance or a preapproval until they have contract documents? 2014 - Prepping to build the Soho 4 with Plantation homes, industrial style 2009 - Built the Brampton with Coral Homes viewtopic.php?f=31&t=15399&start=280 Re: HIA Subject to Finance Clause - Builder Will Not Change 19Jul 07, 2009 7:59 pm Sorry. We *do* have pre-approval We're now hoping to go to the next stage (conditional or unconditional approval - not sure what the difference is to be honest) so that we can sign the contract knowing that finance is in place. Re: HIA Subject to Finance Clause - Builder Will Not Change 20Jul 07, 2009 9:30 pm conditional is preapproval pending the reciept of the building contract and the valuation of that building contract - unconditonal is once the building contract has been recieved by the lender and the valuation is sufficient to complete the contract. i recieved my conditional approval for the build at the same time as i recieved the conditional for the land as both applications were submitted at the same time - perhaps your bank has already provided conditional approval for your build? 2014 - Prepping to build the Soho 4 with Plantation homes, industrial style 2009 - Built the Brampton with Coral Homes viewtopic.php?f=31&t=15399&start=280 Unless there is something in special conditions the builder does not have to give you timeline. If your demolition contractor has not removed Asbestos and it was found… 12 28852 Sorry but you have a crap builder. Probably too late now. For our last build I only spoke to builders who would allow me easy access (at no cost). I used my own sparky… 10 9891 you were just referred to get advice from your solicitor. This is a legal matter. Separately, why would you use a buyers agent for a house and land package? 3 58121 |