Completion Bond is an insurance system that is in effect when the main contractor or subcontractor (construction company) responsible for building the project is unable to complete the building or project undertaken due to financial or technical insufficiencies. It allows the completion of the incomplete project or building, or the repayment of down payments received from consumers.
1. Application for Completion Bond
2. Scoring of the construction company
3. Completion Bond note
4. Limit definition
5. Single limit
6. Aggregate limit
7. Issuing Surety Bond is to present to completion notes per received apartment to each consumer, owner or investor and activating the system register.
8. Project monitoring
9. Financial monitoring
10. Delivery of the project by the construction company
11. In the event that the project is not completed, the platform members shall complete the procedures for completion by the service providers in accordance with the general conditions on behalf of the reinsurance and insurance company.
The Completion Insurance limit is defined for the annual projects of the graded construction company. The resulting risk table and the resulting value of the rating form a percentage of the Completion cost corresponding to the project cost. Minimize the delta between production and consumption. Construction companies that have Completion Insurance can move more confidently during the sales process. When financial assurance of building completion insurance is introduced to consumers, the consumer responds with this approach consumption in these international standards. It leads to uneven stock accumulation. Supply and demand balances. It stimulates the consumer and triggers the consumption for investment. The project completion guarantees that international investors are accustomed to international real estate investment markets and that they seek as a precondition, encourage investment by international investors. Accelerates the meeting of real estate companies with investment. The construction company will raise the credit rating in front of the banks. Completion Insurance is an instrument subject to global credit risk mitigation techniques. Reducing the credit risk of the bank leads to more reasonable levels of the reserve ratio of the bank. It opens the way for banks to use credit more easily.
The Completion Insurance is a security system that enters into force when the main contractor responsible for construction of the project (the construction company) is unable to complete the project due to financial or technical insufficiency. The Completion Insurance protects the landowners who transfer the ARSA to the construction company against the construction contracts for which the construction share commitments have been committed, against the incomplete construction / project.
In the process of urban transformation, unsafe houses are demolished to be demolished and rebuilt. After being demolished, the construction company (contractor) undertaking the construction of a new modern building becomes a new property owner of a certain percentage of the area of m2 that has appeared in the construction. This definition is the conclusion and the conclusion of the pledge agreement.
Construction (reconstruction of the building) is a model for the lack of capital for property owners who can not finance. (Instead of skewed urbanization and insecure buildings) New problems waiting to be solved alongside this solution have created expectations that must be secured. (These are the cases where the landlord (with or without urban transformation) has the added value and advantages of destroying the building.) In the property owner's land share agreement, the building contract is transferred and if there is a building on it, the building is confirmed to be demolished and rebuilt.
The nature of the work will give you the value of your hand today and it will be in the near future. Since receipts and deliveries are at different times, it is necessary for the property owner to ensure that the mutual rights and obligations are not fulfilled simultaneously. The delta between the use presentation and the delivery of the building (building) will increase the likelihood that the construction company, which is responsible for delivering the work, will be affected by economic, financial, technical and managerial negative internal and external factors.
The first solution that comes to mind is the Bank Guarantee Letters. Bank Letters of guarantee will reduce the credibility of the construction company and the company's strong possible credit limit will be reduced. For the letter of guarantee, the company will have to provide real estate guarantee or cash blockage will be required. For these reasons, the need for equity will be increased as the construction company needs it. Moreover, these needs will lead to an increase in the construction costs and difficulty of the contract conditions. For this reason, alternative instruments and solutions are needed instead of the Bank Letter of Guarantee to reduce the risks of the owners.
Surety Bond (Completion Coalition) is a financial insurance instrument designed to serve this purpose. The other target group that the Completion Insurance aims to protect is the consumer.
Completion Insuranc e with insurance contract Insurer insured from pre-paid housing or period holiday / property sales under the law on Protection of Consumer No 6502 Bankruptcy of the buyer Provided that the buyer is a natural person, if the inheritor refuses to inherit his or her residence or the property within a period of 12 months following the date of delivery promised to the contract in case of failure to complete, the consumer specified in the guarantee account shall provide insurance coverage according to these general conditions and policy specific conditions.
The Completion Insurance repay the payments made to the consumers when the risk occurs during the sale from the project, together with the legal interest, not exceeding the maximum amount in the guarantee deposit.
If the building completion insurance provider (insurance-reinsurance-TPA) has decided on the policy as a result of the evaluation, it can be decided that the project is completed and handed over to the beneficiaries instead of paying. In this case, the new delivery date can not exceed 24 months at any time after the contractor has determined. The contractor is obliged to demonstrate the required competence in selecting the contractor to complete the project.
