It's important to carefully review and understand the contract documentation before signing it. Here are some considerations relating to funding conditions and drawdown requirements:
Progress Payments Drawdowns
Some banks may have specific requirements regarding the completion of certain milestones or stages before allowing funds to be released. Ensure that the timelines align between the building contract and approved funding conditions.
Approved Building Consent
Check whether the bank requires an approved Building Consent prior to the first progress payment drawdown. Building Consent is a permit obtained from the local government authority that confirms the construction plans comply with relevant regulations. The bank may want assurance that the project has the necessary approvals in place before releasing funds.
Verify whether the bank requires an insurance certificate naming them as an "interested party." Banks often require borrowers to maintain adequate insurance coverage for the project, and they may want to be notified in case of any changes or cancellations to the insurance policy. Consult with the bank to understand their specific insurance requirements and ensure compliance.