Progress Claims

Progress claims are key milestones under your building contract when your builder will receive payment for completed work. Understanding the mechanics of progress claims is essential for a smooth residential property development journey. When you take out a construction loan, it’s tailored to disburse funds progressively as building stages are completed. This approach protects you from paying interest on the entire amount upfront, and instead, you draw down only the funds needed to pay your builder and suppliers. Each payment milestone, or progress claim, corresponds to a specified stage of your build, outlined in your contract. Your bank will want to be informed in advance about these milestones and might have specific paperwork, such as progress claim certificates, for you to complete at each stage. The bank may also commission an independent valuer to verify that the claimed stage has indeed been reached, adding an additional layer of accountability. Typical progress claims include various stages like the completion of the foundation, framing, lock-up, and practical completion. Each stage has its own requirements and specifics outlined in your contract. For example, the ‘fixing stage’ might include the completion of internal linings, architraves, cornices, and more. Timely and accurate documentation at each of these stages is crucial to ensure smooth financial transactions and continued progress on your building project. It’s your responsibility to forward the builder’s invoices and any required documents to your bank promptly. Some banks require you to fill out an approval form each time funds are to be drawn down. This necessity underscores the importance of understanding your bank’s processes at contract signing to avoid delays that could breach contract terms. At practical completion, your bank will likely send an evaluator once more before making the final payment to your builder. It’s vital that you quickly complete any final paperwork requested by the bank; delays can postpone your possession of the property. In short, progress claims are integral to the fluidity and financial management of your building project. By staying informed and proactive, you can ensure each stage transitions smoothly, minimizing the risk of delays and financial hiccups. Understanding and managing progress claims effectively will empower you to “Build Like a Pro,” making your dream home a reality with minimal stress.