question

[Liliacopaloadofthat]

Advice please.

This is a BIG project, done by experienced developers of more than 20 years.

They have a fixed price contract with a large building contracter who is to demolish and then build an apartment block - high class development with projected valuations starting at 350k, depending on unit size.

Bad weather takes the project from 40 to 70 weeks. The Developer has the banks breathing down his neck and the interest is mounting up

Is insurance mandatory (by developer as well as builder)

Who pays the banks additional interest charges?

In short who loses out?

 

[DaleRCL]

Whoever agreed to the banks additional charges within the terms and conditions of the loan/overdraft will pay it.

If somebody has taken on a contract which can be so hugely affected by weather and has not made prior plans and arrangements for such a situation then they're an idiot.

 

[Liliacopaloadofthat]

Thanks

So I'm thinking that "experienced" developments will have a contingency in case this happens and will have taken out some kind of insurance so that the banks interest is fully repaid

After all, bad weather in the UK is not exactly unusual so the builder will have allowed for it (very experienced national Builder)

I'm asking because the Developer is trying to convince its private investors that there's been no profit in the project...

 

[noseall]

I'm asking because the Developer is trying to convince its private investors that there's been no profit in the project...

Of course he is.

Surely the accounts will back up this statement?