We recently have been involved with development funding with one of the main banks. The requirements for the pre-sales contracts included:
• Purchasers needed to be NZers (residents or citizens) and independent third parties
• Each purchaser could only acquire one lot
• Sunset dates needed to be capable of being complied with and at least 6 months beyond the expected completion dates
• Plans had to be attached to the contract that were compliant with the resource consent requirements
• Specifications had to be attached to the contract for any works to be carried out by the developer
If you are looking for development funding off the back of pre-sales contracts:
1. get the form of pre-sales contracts right;
2. be careful what you give away in negotiation with purchasers; and
3. collect more information about the identity of your purchasers when putting the deal together.
As an aside, the bank’s quantity surveyor was asked to provide a number of certifications. If you are a quantity surveyor in this situation make sure you consider whether your professional indemnity insurance will cover the certifications and that you have backed your liability off by seeking confirmation from the appropriate parties.