Contract Security Clauses
Did you realise that there are clauses about a ‘Security Account’ in a Standard Building Contract?
No mortgage?
If you aren’t planning on a mortgage because
- You are downsizing, or
- Got a house loss insurance payout, or
- Getting a bank loan. or
- Received an inheritance, or
- Won the Lotto
The builder is likely to require money to be deposited in a Security Account.
Money deposited in the Security Account is to cover the cost of the build, and is released to the builder when Progress Payments are due.
As the Security Account will have large sums of money depositedmake sure that all interest is payable to you.
If You Have a Mortgage
If you have an approval from your mortgage provider the builder normally is happy to accept the approval as adequate security.