When it all goes wrong

Brisbane is now in a sector of the property cycle which will test all involved in residential development.

We have seen the failure of several builders. When such a failure occurs, the role of the lender will become very important in limiting the damage to the project.

This is an area where GPS differs from most institutional lenders. We remain committed to the completion of the project. Defaulting the borrower and selling the property “as is” will result in a loss for all involved.

Recently GPS has experienced a builder going into liquidation mid-construction. Steps taken by GPS to get the project back on track include:

• Working closely with the developer in a fully transparent manner;
• Providing counsel backed by our 20 plus years of experience in such matters, including suggesting replacement builders and undertaking direct payment of trades and suppliers to re-establish confidence in the project;
• Extending the loan facility to allow construction works to be completed; and
• Providing a “working cashflow” to ensure building works recommenced as soon as possible.

How you deal with adversity is the true test of character.

Developers, builders, subcontractors and all others involved in the development process should be mindful of who is providing the money, and whether they will still be there, should problems arise. Ask the question before accepting the finance. The cheapest interest rate is not necessary the best value.