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A Guide to Plot and Planning your new home in Parklands

A guideline to Plot and Planning your new home in Parklands.

The following serves as a guide to assist you, the future homeowner, on the steps to be taken when purchasing a plot and planning the construction of your new home.

Remember – it is a guide and it has been prepared with the benefit of our past experience in the Parklands development.

You must familiarise yourself with the packages on offer by the various contractors before concluding any agreement for the purchase of a plot or the construction of your new home.

1. Determine affordability.

Consult with your Financial Institution or a Mortgage Originator to determine the amount of Mortgage Bond you qualify for.
You’ll have to provide the Loan Consultant with proof of your income as well as details of any savings, expenditure and investments you may have.
The maximum you should spend on your new home would be the sum of the Mortgage Bond offered together with any cash contribution you may have (in savings accounts etc), less the costs of new home ownership.
Be aware, mortgage interests fluctuate. What you can afford today may not be affordable tomorrow.

2. Select which entity into which to register the property.

Consult with your Accountant or your Tax Consultant as to the most suitable entity into which to register your new home i.e. your personal name, joint names, Close Corporation, a Company or a Trust.
Our experience shows that the cost of the dwelling should equate to 60% to 65% of your budget with the plot making up the balance.
Of interest – generally, the smaller the dwelling, the greater the cost per square metre. Similarly, the smaller the plot, the greater the cost per square metre.

3. Determine the ratio between the cost of the plot and the cost of your new home

Our experience shows that the cost of the dwelling should equate to 60% to 65% of your budget with the plot making up the balance.
Of interest – generally, the smaller the dwelling, the greater the cost per square metre. Similarly, the smaller the plot, the greater the cost per square metre.

4. Consult with a property specialist.

Having selected Parklands you should establish contact with a designer, architect or a property specialist so as to familiarise yourself with the Plot & Plan process.
Ask for guidance on the time taken before construction commences as well as the period of construction. Discuss costs, cash flow, legalities, the construction process, specification, finishes and guarantees, before proceeding further.

5. Selecting your plot.

Consideration must be given to the location of the plot, the extent, shape, slope, soil condition, orientation, wind direction, building lines, height restrictions, design guidelines and servitudes that may affect the design and positioning of your new home.
It is also wise to obtain a copy of the Title Deed, a Surveyor’s Certificate and a Services Diagram so as to identify any Title Deed conditions, the positions of the sewer, water and electrical connections.
The positioning of street light poles and any electrical kiosks should be identified as their positioning could prove problematic i.e. these may be positioned in proposed driveway entrances.

6. Appointment of a Designer or an Architect

Appoint the services of an experienced Designer or an Architect to prepare a conceptual drawing of your new home together with a detailed specification.
These drawings and specifications will be used to obtain an estimate of what your new home will cost.

7. Appointment of a building Contractor

Do your research. It is essential to do background reference checks to ensure that the Contractor has reputable references. Speak to past clients of the Contractor.
Visit his building site. A clean and orderly site is often a good indication of sound management.
Ensure that the Contractor of your choice is NHBRC (National Home Builders Registration Council) registered. A Financial Institution will not finance any Building Contract if the Contractor is not registered with this council.
The Contractor should provide you with an estimate of your new home based on the conceptual drawing and specifications.
It is important to establish what costs have been included in the contract price as well as costs that are for your account. Also, establish the timing of these payments. Items to look for here are typically, but not limited to: NHBRC registration fees, building plan and scrutiny fees, the cost of water, sewerage and electrical connections, water consumption during construction and the Financial Institution’s interest charges during the process leading up to occupation.

8. Conclusion of the Legal Agreements (Offer to Purchase for the plot / Building Contract for the dwelling).

An Offer to Purchase for the plot should be concluded with the Seller. The offer should be prepared recording the entity selected as the Purchaser and, if applicable, should be subject to obtaining the loan finance contemplated.
The Building Contract should be prepared using the same entity as selected for the Offer to Purchase for the plot. Where the entity is not yet the registered owner of the plot upon which the dwelling is to be constructed, such agreement should be conditional on the successful transfer of the plot purchased into the name of the purchasing entity.
A detailed specification, the plot diagram and the plans of the dwelling should be annexed to the Building Contract.
The Seller, or its agent, will furnish the Transferring Attorneys with copies of the relevant documentation.

9. Mortgage Application.

After signature of the Offer to Purchase for the plot and the Building Contract you will need to submit a formal loan application. Copies of the signed documents, the annexures and the Contractor’s NHBRC enrolment and registration as well as any other supporting documentation required by the Financial Institution must accompany the loan application.
Once the loan has been granted, the Financial Institution will instruct their attorney to register a bond over the property to secure their loan.

10. Submission of house plans to Local Authority.

The Parklands development is governed by a Home Owner’s Association, which Constitution requires that all plans must first obtain the Association’s approval prior to submission to the Local Authority. The PHOA approval is evidenced by a stamp on the drawings, signed and dated on the date of approval.
The designer or architect can prepare and submit the working drawings for the construction of the dwelling concurrent with the transfer process.

11. Transfer of ownership.

The Seller’s Attorney attending to the transfer of the plot will correspond with the Financial Institution’s attorney attending to the registration of the bond.
The registration of the bond will take place simultaneously with the transfer of ownership of the plot.
Legal fees for the services of the Attorneys attending to the bond registration and the transfer, as well as the balance of the purchase price of the plot due by the Purchaser, are payable prior to registration and transfer.

12. Construction of your new home.

Notwithstanding that you may have possession of the plot, it is not recommended that construction commences until change of ownership has taken place.
Similarly, you should not permit the Contractor to commence construction without first obtaining building plan approval.
The Building Contract should detail the various stages of construction when payments are to be made.
Site pegging – the Contractor should initially ensure that the site pegs / beacons are identified. In the event that any of these are missing, the Contractor should utilise the services of a Land Surveyor to place these pegs, prior to commencing on site.
The Contractor applies for a water meter and connection from the Local Authority, so as to ensure that there is a supply of water required for construction purposes.
Site Clearing - unless otherwise instructed, the Contractor will clear the plot of any vegetation, shrubs and rubble.
Set out – the Contractor will set out and chalk the foundations, checking the positioning of your home against the site pegs and building lines.
The Contractor then commences with digging the trenches.
On completion of the trenches, the foundations are compacted and a Dynamic Cone Penetrometer (DCP) test is conducted so as to ensure that the soil conditions are sound and can support the load-bearing walls of the top structure. Should any of these tests fail, the Contractor may be required to dig deeper and further compact the trenches or insert steel to provide additional reinforcement for the foundations.
The trenches are concrete-filled to pre-determined levels thus forming the foundations for the new home. First comes the brickwork or blockwork up to floor level. This is called the plinth.
Prior to the floor slab being poured the damp proofing (plastic sheeting) is placed together with the electrical and plumbing first fixes (conduiting and pipes).
Once the slab is poured and allowed to settle, the superstructure is erected. The Contractor should ensure that, where applicable, the cavity’s to external walls are kept clean, suitably waterproofed and weep holes are provided.
On completion of the superstructure the roof trusses are erected and plasterwork normally commences.
Roof underlay is installed prior to the roof being packed with tiles or roof sheeting laid.
The windows, doors and ceilings are then fitted. The latter is skimmed in accordance with the specifications.
Roof parapets are suitably flashed, painting commences and gutters and downpipes are fitted.
Once the home is secure, the internal works commence with the installation of sanitary ware, built-in-cupboards and light fittings and finishes like tiling, laminated flooring and carpets.
The Contractor makes the necessary application to the relevant electrical supplier for a meter and an electrical connection. A temporary connection may be installed earlier for the purposes of construction.

14. Inspection/s

During the construction process the Contractor will request progress payments for work completed to date. Payments are to be made by you or as draws against your bond if financed by the Financial Institution - who will send an inspector to ensure that payments in line with progress are made.
The Local Authority will also send an inspector to the site, most often at the commencement of construction to ensure that the dwelling is correctly positioned, after the installation of the drainage and again at the end of construction to ensure that the completed dwelling is suitable for occupation.
The Contractor appoints an Engineer to ensure NHBRC compliance. Inspections are carried out prior to construction of the dwelling commencing, on completion of the trenches and again after the floor slab/s have been laid. The Engineer carries out a further inspection after the installation of the roof.

15. Pre-hand over inspection.

Prior to completion, the Contractor will set up a site inspection for you to snag the home. A detailed inspection of the home should be made and defects should be documented.
These defects should be attended to prior to the final inspection and the handing over of the keys.
A date should be set for the handover and final inspection.

16. Final inspection.

At the final inspection, the Contractor should conduct a detailed inspection with you so as to ensure, that the defects list has been attended to.
You will be presented with a final account that normally needs to be settled prior to the Contractor handing over the keys and your taking occupation.
Interest on building draws – it is important to note that the Financial Institutions charge interest on the building draws from the moment the first draw is paid out. The responsibility as to payment hereof should be documented in the Building Contract. The interest is normally deducted from the final building draw and, depending on the contents of the Building Contract, the Contractor may recoup this from you, prior to handing over the keys. Where the payment of interest is for your account, it is advisable to fund such interest during the construction period, so as not to be faced with this account immediately prior to your occupation. You should liaise with the Financial Institution in this regard.

17. Occupation, Certificates and Warranties
On occupation, you should receive from the Contractor:

All the keys,
Guarantees as issued or due by the suppliers or manufacturers in respect of goods supplied or manufactured i.e. Hot Water Cylinders,
The following Certificates of Compliance:

The Electrical Compliance Certificate,
A Plumbing Compliance Certificate,
The A19 Roof Certificate,
An Engineering Certificate for structural elements where applicable i.e. concrete stairs, double storey construction, supporting beams
Where gas appliances have been fitted, an appropriate Gas Installation Certificate.
At the time that this guide was compiled, an article was published suggesting that plumbing certificates may be a requirement. You should consult your local building inspector for an update on this requirement.

Be cautioned, the Financial Institution will require a Certificate of Occupancy before releasing the final draw against the bond. This certificate can be obtained from the Local Authority Building Inspector who will require the above listed certificates prior to issuing the Certificate of Occupancy.
The Contractor’s Warranty in respect of the structure i.e. a 1-year guarantee against roof and gutter leakage and a 5-year guarantee on the structure.

18. Maintenance Warranty

A Maintenance Warranty is often documented within the Building Contract or as an annexure thereto.
You should document any defects and furnish this to the Contractor timeously, so he can attend to these items at a time convenient to both parties post your taking occupation.

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