Why your bank hasn’t released the money yet
Your builder has sent a claim. You've checked it, signed it, and sent it to the bank. That was a week ago. The builder is now asking where the money is, and you're stuck in the middle with no clear answer.
This is one of the most common frustrations for homeowners building with construction finance, and it usually comes down to one thing: the bank isn't paying against the claim, it's paying against verified progress.
How a drawdown actually works
A construction loan isn't paid out in one go. The bank releases it in stages as the build progresses, which is why it's called a progressive drawdown. Each stage follows the same sequence:
The builder submits a payment claim for work completed.
You approve it.
An independent quantity surveyor certifies what has actually been built and what it's worth.
The bank releases funds against that certificate.
Step three is the one most homeowners don't know exists until a payment stalls. The bank isn't questioning your builder's honesty. It's protecting its position on a house that isn't finished yet, and it needs someone independent to confirm the work is in the ground before the money leaves.
Cost to complete: the number that decides everything
At every claim, the QS works out two figures:
Work in place. What has been built to date, valued against the contract.
Cost to complete. What is left to build, and what it will cost to finish.
The bank then compares cost to complete against the funds remaining in your loan facility. If there's enough left to finish the house, the drawdown is released. If there isn't, everything stops until the gap is resolved.
That second figure is the one that catches people out. A build can be running perfectly well on site and still trigger a problem, because progress and money don't always move at the same rate.
Why claims get held up
In our experience certifying claims across residential builds, the usual causes are:
The claim is ahead of the work. A trade is 60 percent done and claimed at 80 percent. Common, usually a cash flow issue for the builder, but it can't be certified.
Materials on site but not fixed. Windows sitting in the garage aren't installed value. Some contracts allow for materials on site, many don't.
Variations that haven't been approved in writing. If it isn't documented, it can't be certified, and the bank hasn't agreed to fund it.
Missing backup. Cost plus and charge up contracts need invoices and timesheets. No records, no certification.
Retentions. A percentage of each claim is held back under the contract. The full claim was never going to be paid.
Most of these are fixable within a day or two once someone identifies them. The delay usually isn't the certification, it's the week spent not knowing what the problem is.
What happens if the money runs short
If cost to complete comes in above the remaining facility, you have a shortfall. It's uncomfortable, but it's far better to find out at claim four than at claim nine. Your options are generally:
Top up the facility with additional equity or lending.
Reduce remaining scope. Defer landscaping, fencing, driveway, or a second bathroom fit-out.
Renegotiate the drawdown schedule so the remaining funds match the remaining programme.
The earlier this is identified, the more options you have. A build that runs out of money at lock-up is a very different conversation from one that tightens at 40 percent complete.
This protects you too
It's easy to see the QS as the bank's gatekeeper. In practice, independent certification works just as hard for the homeowner. You only pay for work that's actually been built. You get an independent record of progress at every stage. And if the numbers start drifting, you find out while there's still time to do something about it.
If your build stalls or your builder walks, the money still in the facility is the money that finishes your house. Every dollar released early is a dollar of your protection gone.
Where we come in
Measured certifies progress claims and prepares cost to complete reports for homeowners and lenders across New Zealand. Most claims are turned around quickly, and we'll tell you straight away if something in the claim won't certify, so it can be fixed rather than sitting in limbo.
If your drawdown has stalled, or you want independent eyes on your claims for the rest of the build, get in touch.