Browse Forums Building A New House Re: HIA Subject to Finance Clause - Builder Will Not Change 2Jul 06, 2009 6:04 pm 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 11Jul 06, 2009 10:27 pm '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 28887 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 9928 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 58424 |