Common use of Construction Loans Clause in Contracts

Construction Loans. What does this clause apply to? ✓ Construction loans We’ll only lend up to the loan to value ratio (as calculated by us) in your letter of otfer. Your progress payment schedule is set out in your building contract. (a) We won’t make a progress payment until we receive a signed progress payment request from you and you have met all the conditions set out in your letter of otfer. You’ll need to send us the builder’s invoice so we can pay the builder, and complete the authorisation form instructing us to make the payment. Our valuer will also need to confirm to us that the building work has been done. (b) Your loan can only be used to construct or purchase the land, and construct the building. We may allow you to use it for other purposes if: • you complete a progress payment request: – signed by the builder with details of the invoiced works; and – stating you’re satisfied with the work carried out and the cost; • our assessor certifies they’re satisfied with the claim on progress payment, variation to the building, progress and cost of the works. (c) At no time should the cost to complete the works ever exceed the unused portion of the overall loan balance. (d) Before we make the final progress payment, you must give us: • an original policy of insurance for the full insurable value of the improvements on a replacement and reinstatement basis noting HSBC as first mortgagee; and • a certificate from the local authority of satisfactory completion (where applicable). (a) We must approve any changes to the building contract: • which increase the total contract price by 10% or more; or • replacing the specified builder. (b) You consent to us or our agents having access to the property when reasonably required to perform inspections. (c) You must ensure that all building works are: • completed to the specifications and within the agreed period; and • carried out in accordance with the: – council’s building approval and conditions; – council’s approved plans including engineering details; and – specifications for the proposed dwellings, you’re required to provide to us. We must agree to any changes to these approvals, plans or specifications. (d) Our assessor must carry out a final inspection on completion to confirm: • the building works have been completed in accordance with the approved plans and specifications; and • the current market value of the property. Once you’ve drawn on your loan, you can only ask us to terminate your liability as a joint borrower if we’ve issued a certificate to say the work you’ve carried out has been completed to our satisfaction.

Construction Loans. What does this clause apply to? ✓ 3 Construction loans We’ll only lend up to the loan to value ratio (as calculated by us) in your letter of otferoffer. Your progress payment schedule is set out in your building contract. (a) We won’t make a progress payment until we receive a signed progress payment request from you and you have met all the conditions set out in your letter of otferoffer. You’ll need to send us the builder’s invoice so we can pay the builder, and complete the authorisation form instructing us to make the payment. Our valuer will also need to confirm to us that the building work has been done. (b) Your loan can only be used to construct or purchase the land, and construct the building. We may allow you to use it for other purposes if: • you complete a progress payment request: – signed by the builder with details of the invoiced works; and – stating you’re satisfied with the work carried out and the cost; • our assessor certifies they’re satisfied with the claim on progress payment, variation to the building, progress and cost of the works. (c) At no time should the cost to complete the works ever exceed the unused portion of the overall loan balance. (d) Before we make the final progress payment, you must give us: • an original policy of insurance for the full insurable value of the improvements on a replacement and reinstatement basis noting HSBC as first mortgagee; and • a certificate from the local authority of satisfactory completion (where applicable). (a) We must approve any changes to the building contract: • which increase the total contract price by 10% or more; or • replacing the specified builder. (b) You consent to us or our agents having access to the property when reasonably required to perform inspections. (c) You must ensure that all building works are: • completed to the specifications and within the agreed period; and • carried out in accordance with the: – council’s building approval and conditions; – council’s approved plans including engineering details; and – specifications for the proposed dwellings, you’re required to provide to us. We must agree to any changes to these approvals, plans or specifications. (d) Our assessor must carry out a final inspection on completion to confirm: • the building works have been completed in accordance with the approved plans and specifications; and • the current market value of the property. Once you’ve drawn on your loan, you can only ask us to terminate your liability as a joint borrower if we’ve issued a certificate to say the work you’ve carried out has been completed to our satisfaction.

Construction Loans. What does this clause apply to? ✓ 3 Construction loans We’ll only lend up to the loan to value ratio (as calculated by us) in your letter of otferoffer. Your progress payment schedule is set out in your building contract. (a) We won’t make a progress payment until we receive a signed progress payment request from you and you have met all the conditions set out in your letter of otferoffer. You’ll need to send us the builder’s invoice so we can pay the builder, and complete the authorisation form instructing us to make the payment. Our valuer will also need to confirm to us that the building work has been done. (b) Your loan can only be used to construct or purchase the land, and construct the building. We may allow you to use it for other purposes if: • you complete a progress payment request: – signed by the builder with details of the invoiced works; and – stating you’re satisfied with the work carried out and the cost; • our assessor certifies they’re satisfied with the claim on progress payment, variation to the building, progress and cost of the works. (c) At no time should the cost to complete the works ever exceed the unused portion of the overall loan balance. (d) Before we make the final progress payment, you must give us: • an original policy of insurance for the full insurable value of the improvements on a replacement and reinstatement basis noting HSBC as first mortgagee; and • a certificate from the local authority of satisfactory completion (where applicable). (a) We must approve any changes to the building contract: • which increase the total contract price by 10% or more; or • replacing the specified builder. (b) You consent to us or our agents having access to the property when reasonably required to perform inspections. (c) You must ensure that all building works are: • completed to the specifications and within the agreed period; and • carried out in accordance with the: – council’s building approval and conditions; – council’s approved plans including engineering details; and – specifications for the proposed dwellings, you’re required to provide to us. We must agree to any changes to these approvals, plans or specifications. (d) Our assessor must carry out a final inspection on completion to confirm: • the building works have been completed in accordance with the approved plans and specifications; and • the current market value of the property. Once you’ve drawn on your loan, you can only ask us to terminate your liability as a joint borrower if we’ve issued a certificate to say the work you’ve carried out has been completed to our satisfaction.

Construction Loans. What does this clause apply to? ✓ Construction loans We’ll only lend up to the loan to value ratio (as calculated by us) in your letter of otfer. Your progress payment schedule is set out in your building contract.Progress Payments (a) We won’t make a progress payment until we receive a signed progress payment request from you and you have met all the conditions set out in your letter of otfer. You’ll need to send us the builder’s invoice so we can pay the builder, and complete the authorisation form instructing us to make the payment. Our valuer will also need to confirm to us that the building work has been done. (b) Your loan can only be used to construct or purchase the land, and construct the building. We may allow you to use it for other purposes if: • you complete a progress payment request: – signed by the builder with details of the invoiced works; and – stating you’re satisfied with the work carried out and the cost; • our assessor certifies they’re satisfied with the claim on progress payment, variation to the building, progress and cost of the works. (c) At no time should the cost to complete the works ever exceed the unused portion of the overall loan balance. If you believe this may happen, contact us to discuss your options. (d) Before we make the final progress payment, you must give us: • evidence of an original insurance policy of insurance for the full insurable value of the improvements on a replacement and reinstatement basis noting HSBC as first mortgagee; and • a certificate from the local authority of satisfactory completion (where applicable). (ae) We must approve any changes to the building contract: • which increase the total contract price by 10% or more; or • replacing the specified builder. (bf) You consent to us or our agents having access to the property when reasonably required to perform inspections. (cg) You must ensure that all building works are: • completed to the specifications and within the agreed period; and • carried out in accordance with the: – council’s building approval and conditions; – council’s approved plans including engineering details; and – specifications for the proposed dwellings, you’re required . You must contact us to provide to us. We discuss your options as soon as you become aware that the above may not occur and you must agree obtain our agreement to any changes to these approvals, plans or specifications. (dh) Our assessor must carry out a final inspection on completion to confirm: • the building works have been completed in accordance with the approved plans and specifications; and • the current market value of the property. Once you’ve drawn on your loan, you can only ask us to terminate your liability as a joint borrower if we’ve issued a certificate to say the work you’ve carried out has been completed to our satisfaction.