A building loan contract is one that is entered into between two parties for the purpose of undertaking construction of a building. The borrower is lent money by the lender for the construction of a building wherein the loan amount is released by the lender according to the progress in the various stages of construction. A sample building loan contract is given here under for better understanding.
Sample Building Loan Contract:
This building loan contract is entered into between the borrower David Construction Ltd and the lender Parker consultants Ltd on the 18th of July 2013.
Details of Parties to Contract :-
Lender: Parker consultants Ltd.
Address: Tower 4, Chard Business Park, New England, Somerset, UK.
Borrower: David Construction Ltd.
Address: No 25 East Street, Hollymoor lane, New England, UK.
Terms and Conditions of the building loan contract :-
- The borrower has applied to the lender for a loan amount of One Million pounds, 100000000 £.
- The said loan can be advanced and the lender shall determine the amount details and instalments.
- The borrower agrees to obtain all necessary approvals from all government authorities having jurisdiction of plans, and specifications and all necessary building permits before making the first advance.
- All the financial dealings shall require five days prior notice to the lender and shall happen at the place designated by the lender.
- The lender has all rights to stop the funds if any of the conditions mentioned in the contract is not met.
Termination Clause :
The contract can be terminated under the following circumstances :
If the improvement on the site premises is not in line with the plan, as per the judgement of the lender.
If the borrower does not provide the required government approval plans within 30 days of the contract start date.
Signature of the Borrower : ___________________________
Signature of the Lender : ___________________________