Banks and other lenders often require a building survey (also known as a builder’s report or a builder’s inspection) be carried out prior to agreeing to lend money to purchase or alter a property.
By carrying out a thorough building survey and providing a report we can provide the appropriate level of information on which a lending institution can base its decision on whether to lend or not. This provides useful information about the nature and condition of the building, significant defects, significant repairing and maintenance issues and the likelihood of it being a leaky building and can therefore allocate risk accordingly.
If a bank or other lender is approached by one of their clients for a loan to carry out construction, either of a completely new building or alterations to an existing building, they may wish to obtain confirmation that the construction work will be completed to an acceptable standard and in compliance with the building consent, the building code and the manufacturer’s recommended instructions.
In order to safeguard the lender in this respect the lender may wish to impose loan criterion on their client to engage an independent Clerk of Works to monitor key stages of construction to ensure all work is carried out correctly to ensure building code compliance and an appropriate quality of finished building work is achieved.
This will help to safeguard the lender’s investment in the event their client defaults on the loan, for whatever reason, and will provide confidence that the construction completed up to the stage of default has been completed correctly and can be continued by others from the date of default through to completion.