PROGRESS PAYMENTS

Greymouth Evening Star, 20 February 1947, Page 6

PROGRESS PAYMENTS

REQUEST BY BUILDERS DECLINED STATE ADVANCES POLICY The request made by the West Coast Master Builders’ Association, that the State Advances Corporation should adopt the policy of the Housing Construction Department and make monthly progress payments to builders working on construction financed by the corporation, instead of merely three payments on the whole job, has been declined. The corporation, however, has pointed out to the association that although it will not make monthly payments its policy, it is prepared in certain cases to meet the special request of the borrower that monthly payments should be made. This, however, involves the borrower in additional expenditure for inspection fees. - Giving its reasons for declining the request, in a letter to the Master Builders’ Association, the corporation states that it differs from the Housing Construction Department in that it is not a contracting party in rehabilitation and other loan cases. Frequently the amount of the loan does not cover the cost of the house and it is necessary in such cases for the owner to make a cash contribution. In all such cases the corporation must retain sufficient monies to complete the project at any stage. This is a compulsory precaution and is the general practice with all lending institutions, private and Government. The corporation adds that it has been foynd that practically all cases of insufficient progress payments are those where the borrower is making a cash contribution to the proposition and as a precaution against such occurrences it suggests that members of the association should take the following precautions before starting any new building, particularly if it is to be financed with borrowed money: 1. Ensure that the client has title to the section. 2. If. the loan does not cover the whole cost, that the client has sufficient cash resources to complete the proposition. 3. If the fencing and paths are not in the contract, that these are completed immediately the house is finished as the final payment certificate will not in general be issued until this has been done.