Tag Archives: Real

Building Bond Scheme

Industry Reforms the Building Bond Scheme

Further industry reforms have taken effect 1 January 2018 (Building Bond Scheme) where Developers of residential Strata schemes will be required to execute Mandatory Defect Inspection Reports along with lodging a Building Bond equal to 2% of the final contracted construction cost of the building.

building bond scheme

The building bond scheme applies to building work to construct residential or partially-residential strata properties that are four or more storeys. Buildings that are three storeys or under are covered under the Home Building Compensation Fund.

We thought it would be worthwhile to remind yourselves of these changes which I’m sure your already up to speed with these reforms, if not you can find more information on Fair Trading NSW website below and or speak with your property lawyer.

FairTrading.nsw.gov.au

James Okkerse

“Prudential Finance does not provide financial product advice and does not hold an Australian Financial Services Licence. Prudential Finance recommends that investors consider their own objectives, financial situation and needs before proceeding with any investment and seek professional advice. All information contained within this Website is specifically structured for corporate, business, commercial, construction clients, wholesale and professional investors.”

 

Mezzanine Finance – Real Meaning

Mezzanine Finance – Real Meaning

Lately I have heard some very interesting definitions of what “Mezzanine Finance” means.

To clear up the actual meaning; “Mezzanine Finance” is subordinated debt with ranks behind a 1st mortgage/senior debt.

Mezzanine Finance - Real Meaning
Mezzanine Finance – Real Meaning

Mezzanine Finance will usually be secured by a 2nd Mortgage.

I have seen other definitions where they say Mezzanine Finance “gives the lender the rights to convert to an ownership or equity interest in the company if the loan is not paid back in time and in full”.  This is incorrect.  A mezzanine lender may or may not include rights to takeover the project in the event of default although it is certainly not the definition of “Mezzanine Finance”.

Therefore “Mezzanine Finance” is subordinated debt which ranks behind 1st mortgage/senior debt.   The terms can vary from lender to lender.

If you require Mezzanine Finance call Prudential Finance today 1300 550 669.

 

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