ᐅ Signing a Construction Contract Before Purchasing the Land?
Created on: 9 May 2019 10:18
G
goalkeeperG
goalkeeper9 May 2019 10:18Hello everyone,
We are basically in agreement with our future general contractor (GC) and are having the contract reviewed by a specialist lawyer and a friend who is an architect. After that, we would be ready to proceed.
However, our notary appointment has roughly shifted to the end of June/early July. We will be purchasing a municipal plot of land.
The GC has already informed us that the shell construction definitely cannot be completed this year, as he won’t have enough time. As a result, the entire construction project will be delayed by several months due to the winter season. However, we urgently need the space since we are expecting another child.
He would grant us a right of withdrawal in the contract if, for any reason, the land purchase falls through – any costs incurred up to that point, probably around 3.5% of the total price, would of course be our responsibility.
The question now is whether there could be any other issues with signing the construction contract before the notary appointment for the land purchase?
Our mortgage lender doesn’t see this as a problem, since we would be financing the 3.5% from our own capital, and the loan would only begin once the land purchase is complete.
What do you think?
We are basically in agreement with our future general contractor (GC) and are having the contract reviewed by a specialist lawyer and a friend who is an architect. After that, we would be ready to proceed.
However, our notary appointment has roughly shifted to the end of June/early July. We will be purchasing a municipal plot of land.
The GC has already informed us that the shell construction definitely cannot be completed this year, as he won’t have enough time. As a result, the entire construction project will be delayed by several months due to the winter season. However, we urgently need the space since we are expecting another child.
He would grant us a right of withdrawal in the contract if, for any reason, the land purchase falls through – any costs incurred up to that point, probably around 3.5% of the total price, would of course be our responsibility.
The question now is whether there could be any other issues with signing the construction contract before the notary appointment for the land purchase?
Our mortgage lender doesn’t see this as a problem, since we would be financing the 3.5% from our own capital, and the loan would only begin once the land purchase is complete.
What do you think?
G
goalkeeper9 May 2019 10:19EDIT: Could the heading please be changed to "Conclusion"? Thank you!
goalkeeper schrieb:
However, our notary appointment has roughly shifted to the end of June/beginning of July. We will be buying a municipally owned plot of land.What do they say? Is it just a formality, or is there some uncertainty?G
goalkeeper9 May 2019 11:43Nordlys schrieb:
What do they say? Is it a formality, or is it uncertain? It's a formality.
What does the degree have to do with this? Is it just about being able to plan ahead?
How long does the land register entry take for you?
For us, it took another three months after the notary appointment before we were listed in the land register, and then even more months passed until the bank was included and we could draw the funds.
In other words: If our notary appointment had been in July and we didn’t have the equity ready for the shell construction, we wouldn’t have been able to start building before January.
How long does the land register entry take for you?
For us, it took another three months after the notary appointment before we were listed in the land register, and then even more months passed until the bank was included and we could draw the funds.
In other words: If our notary appointment had been in July and we didn’t have the equity ready for the shell construction, we wouldn’t have been able to start building before January.
I also think that the point raised by @Lumpi_LE might be more problematic than just purchasing the land. It depends on the available equity and whether additional payments need to be made now or soon. In our case, the entire process only took 2.5 weeks but it can also take several months.