Reply To: Are Bank Guarantees worth the paper they’re written on?

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Anonymous
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Hi Charlie,

Without getting very bogged down as I’m sure all the banks do it differently all I can say is that in my area the developers have to pay for the guarantee. Its no more than an insurance policy in effect and the premium is based purely on the size of the amount to be guaranteed.

I have never known of a developer to issue a BG, only the banks.

The guarantee here states that the property is to be delivered by its contracted date with the LFO or if the property is finished early and the LFO is obtained it is considered completed.

The ones from CAM always have a completion date which is the same as the completion date of the property. If the property isnt completed on its contracted day or no LFO is obtained then the guarantee can be called on.

What I dont understand is if there is no completion date to when the property should be finished at what point can you demand your money back by saying its not been finished??

Bernard

Bernard