澳洲Australia property Bank Guarantee at Settlement? | Sydney

在澳大利亚Property Investment




Hi all

Have a question re bank guarantee, hoping to get some input here.

We are about to hand over a Bank Guarantee secured with cash (term deposit) to a developer as deposit on purchase of OTP apartment unit, to be completed in three years.

We would like to use the funds from the term deposit as part of our deposit come settlement time.

What we are not clear about, what are the processes around this? Will developers be happy to release the bank guarantee before settlement? We should think not as that is our 10% deposit. But until that is released we may not be able to settle due to lack of funds. A bit of a catch 22 going on there...

We are asking the question now just in case we need to secure/ save up more in order to settle. Thanks for reading and your thoughts appreciated :)


WB  

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Just bumping this up....

Anyone has any experience to share? Tips, tricks and suggestions welcome. Thanks in advance.

WB  

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Why not just use a deposit bond? You'll still need to have the funds available at settlement, but it won't tie you up in the meantime.  

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WizardBlade said: ↑
Hi all

Have a question re bank guarantee, hoping to get some input here.

We are about to hand over a Bank Guarantee secured with cash (term deposit) to a developer as deposit on purchase of OTP apartment unit, to be completed in three years.

We would like to use the funds from the term deposit as part of our deposit come settlement time.

What we are not clear about, what are the processes around this? Will developers be happy to release the bank guarantee before settlement? We should think not as that is our 10% deposit. But until that is released we may not be able to settle due to lack of funds. A bit of a catch 22 going on there...

We are asking the question now just in case we need to secure/ save up more in order to settle. Thanks for reading and your thoughts appreciated :)


WBClick to expand...
You will have to have the bank that issued the bank gtee to also attend settlement whereby they would hand over your 10% and part of your settlement funds in return for the gteee doc being returned. Also as suggested try a bond bond but I'm guessing your developer might be constrained by his funder as to what type of deposit they can accept.
This is also usually set out in the contract.  

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developers are reluctant to accept bonds - look at what happend to Equity Bonds (is no more...)  

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Thanks everyone for your replies.

Yes, it was specified in the contract that the developer will only accept cash or BG as the deposit.

If my bank that issues the BG is to be present during settlement to release the funds (from the BG) it does not mean that for the home loan, I will have to go with this bank, do I? Because we may decide not to go with the bank that issues the BG for our home loan.

Is there anything that the developer or purchaser will have to do in order to facilitate this happening at settlement? Do we have to advise the vendor of our intention to do this from the start?

So theoretically, parties to be present at settlement could consist of: the developer's solicitor, my solicitor, and two different banks. Is that right?

TIA, again...

WB  

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if its not going to be the same bank that does the loan and BG at settlement, then Id suggest ending the BG prior to settlement and replacing it with cash (either that you had borrowed from another security or perhaps the money in the BG term deposit).
Having a rep from the BG bank, and all the other parties at settlement sounds a little bit too tricky.  

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I would think it would all be done simultaneously at settlement. the guarantee is released as the deposit and the loan money is handed over to the vendor.  

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I thought that the bank guarantee is only used should the purchaser reneg and not settle. The total contract price is paid by the purchaser on settlement, and the bank guarantee expires (unused).

I only have experience with bank guarantees on a commercial leasing basis, so my be a little off the mark here...

Boods  

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Just think of the guarantee as being security by another property. The $x0,000 deposit is being used as security and title won't be released while this is the case. At settlement the security is no longer needed and so title can be released. If it all happens at the same time then the deposit should be able to be used.  
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