News In Brief

Banks advise on MR lending after Gallery Vie decision

On 8 September, ARAMA Gold Coast held a meeting which all management rights lending banks were invited to attend and advise as to their lending policies in light of the Gallery Vie decision.

Based upon the advices of the bank representatives present and the advice of specialist MR finance brokers, Mark Ryall and Mike Phipps, the position as at the date of the meeting was as follows:

“Termination provision” is a provision in the building manager’s agreement with the body corporate allowing the body corporate to terminate the agreement in the event of liquidation or bankruptcy of the building manager.

Westpac: Minimum lending $1.5 million and assessing the operators with more detail – 70 per cent lending

BOQ: Existing BOQ clients with MR experience – lending available with termination provision to be amended – subject to credit approval – up to 70 per cent lending, not currently accepting any new to bank applications. Policy to be reviewed on 4 October, 2015.

ANZ: Under $1 million lending – finance up to 70 per cent for experienced operators – termination provision not required to be amended – up to 65 per cent for new to the industry. Over $1 million lending – finance between 65 per cent – 70 per cent with provision requiring the termination clause to be amended in assignment documents. Level of experience will come into lending ratio.

Bank West: Existing clients with experience – will consider 70 per cent without requirement to amend termination provision – Not accepting any new to bank applications.

CBA: Lending up to 70 per cent with termination provision to be amended by EGM prior to settlement.

NAB: Lending up to 70 per cent with termination provision to be assessed by credit division once full application is submitted. Existing NAB clients with experience have had termination amendment waived, but some require termination provisions to be amended – Will depend on statement of position, LVR, type of complex and date of next AGM.

Suncorp: Existing clients will be considered with strong asset position – termination provision to be assessed by credit division after full application submitted – Not accepting any new to bank clients.

Macquarie: Minimum lending $1 million – termination provision to be amended in assignment document.

Obviously some bank policies may have changed since the meeting and, if you are in the market for financing it would be best to check with a finance broker or individual banks as to policies at that time.

Short Punch and Greatorix provided a hand out at the meeting, advising as to the effect of the Gallery Vie decision. A copy can be obtained by emailing a request to [email protected]

Rosie Clarke

Rosie Clarke is managing editor at Multimedia Publishing.

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