I can only talk about the guarantees we get from Cam Bank so here goes,
MG. So is the BG open ended and no long stop date?
Can it be that the completion date is say for 3 years and the BG is also valid for 3 years, without renewal and without charge.
Its not an open ended agreement. Part of the guarantee is that it must be delivered on its contracted date. The maximum time we ever give for a property to be finished is 18 months and the guarantee will last this long and doesnt cost the client anything.
MG So, how long is long,1,2,3,4,5…years?
Every property is calculated to take around 12 to 13 months to be finished so putting 18 months into a contract give sufficient extra time for rain delays etc.
MG Should think that the BGs from whichever Bank are similarly worded, many clauses and sub-clause and weighted in favour of the bank. Before you say oh no, it is their business to make money, not to pay out to whoever asks.
Not sure if you have seen one from Cam Bank but it is a simple 1 page A4 document.
MG Don’t think this would vary the wording too much, but would affect the premium the developer has to pay.
I would agree
MG But however long, let’s assume longer than 12 months, so, assuming the time goes beyond 12 month, the bank does not have to agree to extending or issuing a new BG?
MG Are you saying that if the development date is say 3 years, the original BG remains valid and at no extra charge?
As I said I only know of the guarantees from Cam so it would be interesting to know other peoples experiences with the other banks.