Has anyone come across this problem?
ANZ bank aproved construction loan subject to strata title proof. Council aproved DA application but can not aprove strata tile until building is built. ANZ will not send letter of offer without strata tile proof Council will not issue strata title until building is built.I have never seen anyone paying up front or building a ‘PART’ of a building before.
Robert Bou-Hamdan
Mortgage AdviserOriginally posted by gogo:Has anyone come across this problem?
ANZ bank aproved construction loan subject to strata title proof. Council aproved DA application but can not aprove strata tile until building is built. ANZ will not send letter of offer without strata tile proof Council will not issue strata title until building is built.No I haven’t come across this before and we have had tons of construction loans.
What are you building?
Michael Yardney
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Originally posted by The Mortgage Adviser:I have never seen anyone paying up front or building a ‘PART’ of a building before.
[/b]Sometimes a bank will only give stage by stage funding – but this is more common with a larger development (townhouses, units, etc) than a small residential house. If they’re not sure you will complete the project for the money you are asking, then rather than give you as much as you want in one lump sum they will monitor your progress so worst case scenario they won’t loose the whole lot if you mismanage it.
**On topic…
Sounds like a lot of nonsensical red tape. Can you get a loan through another lender that doesn’t require the strata title, or one that will send a Letter of Offer without it?
Thanks for the overview Luci. I am familiar with draw-downs as it is the most common way.
My point regarding paying upfront or building ‘PART” of a building was in reference to the Strata Title requirement which usually applies to units.
Paying upfront for a single unit in a development is something I have never seen and would strongly advise against to any of my clients.
The paying for ‘PART’ of a building comment is in relation to paying for a unit which may, for example, represent 1/20th of the overall ‘building’ which would then be Strata Titled to define the actual unit.
ANZ should be fully aware that Strata Title can not be forthcoming on a building that has not been built so I do think this request was made in error.
This may be different if it is a complex style free-standing Strata Unit development but I have also never seen anyone paying upfront for these. The reason for this is that the ‘final inspection’ usually finalises the contract of sale as it ensures the property is as advised in the contract of sale.
Robert Bou-Hamdan
Mortgage AdviserI should have explained it better” The building is a 2 storey duplex with a common wall.ANZ will only lend 60% of contract price for a dual occupancy and up to 95% for if they are strata title. I can not afford the 60% lend hence my problem.
Who is building it? Is it your own project, are you teaming up with someone or is a company selling it to you?
Robert Bou-Hamdan
Mortgage AdviserBuilder standard fixed price contract. Loan has been aproved subject to strata title proof Development application has been aproved by council.Council has strata title application will not aprove it until the duplex is built. Catch 22 can not get funds to build it without the starta title aproval.
ANZ has letter from council stating councils positionSo you will own both properties. It sounds like an admin error to me. If they cannot fix it, the only alternative is look elsewhere or use a broker.
By the way, 60% of completion value can sometimes be enough. You certainly should not need more than 80% so you would avoid mortgage insurance.
Robert Bou-Hamdan
Mortgage Adviser
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