Finance for Duplex after builder has gone broke

I have bought a block of land through a buyers agent with the intention to build a duplex.
Got in a contract with a builder (through same agent).
Got a loan with Westpac for both land and build. Loan settled about 1 year ago.
Builder never started the build and unfortunately lost his license (some info here).
Now, I am finally out of the contract and have engaged another builder and a project manager (I'm an expat working overseas).

The contract is for a turnkey build, however there are some desirable items that are not covered by the builder:

  • Council contribution. They pay for one of the houses, not the second
  • Retaining wall - they do have a retaining wall on the contract, but I may need another one for the backyard as the block in on a slope
  • Project management costs - the PM is not related to the builder
  • Turf and landscaping
These costs are not in the contract with the builder, but I need them included in the total cost of construction for financing purposes.
Apparently, although I already have a loan, Westpac will refer my account to credit again due the change in contract.
My broker says that these costst must all be in the contract or the bank will not take them into account when financing the construction.
The builder will not put costs in the contract that are outside of their scope of work.
I have heard of people who got finance by giving the bank the build contract plus quotes for the remaining work outside of the builder's scope.

I am after some advice as to what I could do to resolve this.

Is Westpac being inflexible?
Is the broker right in asking for all costs to be in the contract?

Any info will be much appreciated.
BP
 
Of course the builder is not going to do that because its a legal contract and he is not responsible for the works.

What you need to do is pretty simple and you have already mentioned it which is to grab the builders and package it up with other quotes (from the PM, from the dude doing the retaining wall, etc) and send this in one package to the valuer/bank.

The biggest issue I see "will the valuer take into consideration the PM's fees into the build cost and final valuation"? My opinion - very very unlikely that he will do this. He will also not take into consideration the s94 fees.

I think the valuer will take into consideration the other items you have noted which is landscaping, turfing, retaining wall.

Can I ask why you are getting a PM for a duplex construction? Surely the onus is on the builder to do this and you are somewhat protected from only making payments progressively? Surely it may be cheaper to pay someone to do an inspection for each stage?

Have you got all the necessary paperwork from the new builder such as Home Warranty's Insurance? Builders Risk Insurance, etc?

Also with the s94 fees - can you not get him to incorporate this into the contract?
 
The PM fee I can cover separately if it comes to that.
The s94 fees, I should ask why this one cannot be added to the contract. Will do that.
The contract is being prepared and will check compliance with Home Warranty Insurance and Builders Risk Insurance. I've just been through litigation to get out of my previous contract, so am well aware of the importance of being covered by insurance.

Regarding your question about why I need a PM, the answer is a mixture of the situation I got myself into (with builder going broke) plus me being overseas plus not having any experience in building.
With the builder going broke, I had serious doubts about what to do and how to go about it. I didn't want to simply pick up the phone and contact some builders.
I have zero experience developing houses.

I got in touch with someone who has a lot of experience and he has provided guidance and encouragement to continue with the project.
Yes, there is a fee involved, but I am ok with that under the circumstances.
With experience, I will be able to make a lot more decision on my own... I'll get there...
 
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