An advance for essential repairs should generally be confined to those essential for the preservation of the property.  When processing an application for assistance in respect of repairs, the decision should be based on the borrower's description of repairs required and approximate cost.  A technical inspection and report will not normally be requested.  However, any charges for Consultants' inspections and associated costs incurred by the applicant in preparing details of the proposal may be included in the total amount of the advance sought.

One of the criteria specified in s.21 for the issue of certificates of entitlement for advances for essential repairs is that bearing the cost of keeping the home in good order and repair would cause serious financial hardship to the person- [please see Entitlement GO's Chapter 6].

Assistance to complete essential repairs is only available where the applicant has already received the maximum advance of $25,000.  The interest rate on Advances for Essential Repairs is capped at 6.85%pa and variable at 1.5%pa below the Benchmark Rate while the Benchmark Rate is below 8.35%pa - the same provisions applicable to Additional Advances.  The possibility of the applicant obtaining an Additional Advance for repairs without the restriction of having to satisfy the serious financial hardship criteria which apply to applications for Advances for Essential Repairs should be explored and the applicant advised accordingly.  In some cases it may be that the applicant would be granted an Additional Advance for part of the repairs cost and the balance as an Advance for Essential Repairs.  When explaining the options, it should be pointed out that the limit available for any further advance under the portability arrangements would include the amount of any additional advance that has been made to the person, but would exclude the amount of any advance for essential repairs.

Before repairs are undertaken the borrower should be counselled on the desirability in his/her own interest of minimising continuing charges by making his/her own arrangements for the completion of repairs which are not of a structural nature, perhaps with the assistance of relatives, or friends.  He/she should also be advised of any assistance which might be available from reputable and active charitable organisations, such as Apex, Lions, TPI Association etc., in relation to repairs which will not be covered by the essential repairs advance.  Other forms of home maintenance assistance, such as those provided by some State Governments might also be an option for the client's consideration.

A Certificate of Entitlement for essential repairs should be issued to persons whose physical and financial circumstances prevent them from carrying out the work and who have otherwise done everything possible within their resources to complete the work.  Consideration should also be given to the possibility of completing the work with finance from another source or with family assistance.  Any amount of funds held in excess credits should be included as part of the applicant's overall financial circumstances measured against the hardship guidelines.

Considerations such as present condition, market value and estimated market value of the property after repairs are carried out would be the concern of the Bank as mortgagee and are not relevant in the decision to issue a certificate of entitlement.

Sub-section 17(3)(b) of the Defence Service Homes Act 1918 provides that all certificates of entitlement issued for advances shall specify the maximum term of the advance.  The term for Essential Repairs advances would normally be set as the remainder of the term of the current advance, although there is provision for extending the term if necessary under Sub-section 36(1)(b)(ii) of the Act.

Where a certificate of entitlement has been issued for an essential repairs advance and the initial/further advance has been assigned, a certificate of assignment may be issued upon application in relation to the essential repairs advance.