A professional, accurate and detailed cost plan (aka cost estimate) will provide the client with an early indication of the cost of the project, additionally being a comparison tool which can be compared with the contractors tenders to provide a better overall solution for the client.
It is becoming more common that banks and other financial institutions request that Developers provide a Quantity Surveyor’s Initial Cost Report to be submitted with the loan application.
After the loan approval and the project has commenced, a Quantity Surveyor is required to asses the Progress Drawdown Claim by completing a site inspection and providing a Progress Drawdown Report. This will assist the Financier with releasing the correct amount of money.
Ultimately, the bank cost plan estimates allow YOU to Develop an Appropriate Budget and verify to Lending Organisation that the project is feasible. Banks will require independent cost report from Qualified Quantity Surveyors and will require work in progress report from Quantity Surveyor before any funds are released.
It is important to note that the initial assessment report and drawdown reports exist to protect both the financial institution and the developer, though this is a concept that some developers struggle with.
Initial Cost Reports
The initial cost report is a detailed cost breakup of the project and identifies any risks associated with the proposed development prior to the building works commencing. It covers documents which usually include the building contract, plans, approvals and permits, insurance details, cost trade breakup, cashflow projections and soil report.
You will be required to engage a Quantity Surveyor for a bank prefunding report when applying for a construction loan for your development project. At Duo Tax Quantity Surveyors, we can provide you with an Initial Cost Report within 3-5 business days. We have experience working alongside many different lenders. Duo Tax have carried out hundreds of reports for clients seeking funding from the big four Australian banks, as well as other major lenders. As a registered quantity surveyor with the Australian Institute of Quantity Surveyors (AIQS), we act in accordance with all AIQS requirements and ensure that every report is completed in detailed and at a high standard.
Progress Drawdown Assessment
As a homeowner the major risk that you would usually face is paying the builder in advance for the works to be completed. The problem with this is that if a builder becomes bankrupt or insolvent and is unable to continue and finish the construction, the homeowner will suffer a significant financial loss.
At Duo Tax we ensure that the progress claim payments align with their contracts to the exact dollar value of work at each of their payment stages.
Progress claims are carried out to aligning with the building contact. Documentation is assessed to assist these claims, such as invoices from the builder including detail of any variations made plus a statutory declaration from the builder in order to confirm that subcontractor payments are made.
Duo Tax understands the significance and importance of completing these reports in a timely manner. We communicate with all parties (financial institutions, builders and the client) to ensure that all required documents are readily available with onsite inspections carried out in a timely matter to provide a fulfilling outcome for all parties involved.
What is included in our report?
Project Contract Statement Our progress claims align with the original contract sum accounting for any variations along with other provisions to be made. We highlight how much the total value of works being assessed, including the remaining cost to complete the works.
Drawdown claim Included in our report is the progress drawdown claim which reports and tracks how much has been paid to the builder while identifying how much funds yet to be released by the bank.
Trade Summary The trade summary is to analyze the total contract works while determining and forecasting how much work is completed along with the total expenses to date which are remaining in order to release funds to the builder.
Cash-Flow Forecast The cash-flow forecast breaks down and reports the anticipated cashflow in order to complete the project. Determining the estimated funds with the total claims to be released in each stage to ensure that the completion of works is aligned with the builder’s requirements. We also have a quantity surveyor who visits the construction site to assess and take photos and report how much work has been completed by the builder.
Get in Contact
Stay up-to-date with latest tax depreciation changes and get educated with regular articles regarding investment properties from the tax depreciation experts.