Blog Archives | Category

Once construction finance is in place, the lender does not simply pay the builder’s invoices. Each month, before any funds are released, an independent quantity surveyor acting for the lender checks what has been built, what has been claimed, and whether the money left in the facility is still enough to finish the project. That last question is answered by the cost to complete, and it is the figure that most often holds up a drawdown. A claim can be accurate for the work on site and still be refused if the remaining budget no longer covers the remaining work. This article explains what a cost to complete report is, what the lender’s QS checks at every drawdown, and how developers and builders can keep payments moving.

What a cost to complete report is

A cost to complete report is the lender’s independent check that a project in progress can still be finished within the funds available. It compares three things: the total forecast cost of the project, the amount already spent and certified, and the amount still undrawn in the facility plus any equity the developer has committed. If the forecast cost of the remaining work is greater than the money left to pay for it, the project is said to be out of balance, and most construction loan agreements stop further drawdowns until the gap is closed.

The report is the ongoing partner to the bank prefunding report prepared before construction starts. The prefunding report establishes the baseline budget, contract and programme. The cost to complete report tracks the project against that baseline every month until practical completion, usually as part of the same document that certifies the builder’s progress claim. In practice the two are often prepared together as a progress claim or drawdown report.

Who the lender’s QS works for

The lender’s quantity surveyor, sometimes called the monitoring QS or the bank’s QS, is usually paid by the developer but acts for the lender. That distinction matters. The QS is not there to agree the builder’s claim, negotiate variations or advise the developer on cost savings. Their job is to give the lender an independent opinion that the money it is about to release matches work actually in place, and that the loan remains secure.

This is why a monitoring QS will sometimes certify less than the builder claimed, or less than the developer expected, even where the developer’s own consultants are satisfied. It is also why a developer who wants advice on their own position, such as assessing a variation or reviewing a builder’s claim before it is paid, generally needs a separate quantity surveyor acting for them.

What the lender’s QS checks at every drawdown

Work in place matches the claim

The starting point is a site inspection. The QS walks the project and assesses, trade by trade, the percentage of each item that is genuinely complete. A builder’s claim is often prepared from the programme or from subcontractor invoices, and both can run ahead of the work on site. Where the claim says the frame is 100 per cent complete and the top level is still being stood, the QS certifies what is there, not what was planned.

The claim follows the contract breakdown

The claim should be built on the same trade breakdown or schedule of values that was agreed at contract and reviewed in the prefunding report. A claim that reshuffles values between trades, or front loads early trades such as preliminaries, demolition and excavation, makes it look as though more value is in place than there is. The QS checks each line against the contract value for that trade and the progress actually achieved.

Variations are approved and fairly valued

Variations are one of the main reasons a claim is reduced. The QS will generally only include a variation that has been instructed in writing, is supported by pricing, and has been accepted by the developer. Unapproved variations, provisional sum adjustments that have not been reconciled, and claims for work that was already in the contract scope are typically excluded until they are resolved.

Materials are on site and fixed

Most lenders fund work that is incorporated into the building. Materials delivered but not yet installed, and especially materials stored off site, are commonly excluded or only included with proof of ownership, insurance and security. A builder who claims a full lift package or façade order on delivery should expect it to be held back until it is installed.

The cost to complete still balances

This is the test that decides whether the drawdown can proceed at all. The QS forecasts the cost of all remaining work, including approved and likely variations, remaining provisional sums, authority and consultant costs still to be paid, and an allowance for risk. That forecast is compared with the undrawn loan plus any developer equity still to be contributed. If the remaining funds are less than the forecast cost to complete, the project is out of balance.

Contingency has not been used up

The QS tracks how much of the original contingency has been spent and how much remains against the work still ahead. A project that has consumed most of its contingency during substructure, with the more complex fitout and services trades still to come, will be flagged even if it currently balances.

The programme is realistic

Time is a cost. The QS compares actual progress with the contract programme and the time remaining on the facility. Delays can lead to extended preliminaries, higher interest and holding costs, and in some cases a completion date that falls outside the loan term. A programme slipping month after month is usually raised with the lender before it becomes a funding problem.

The paperwork supports the payment

Alongside the physical checks, the QS confirms that the claim arithmetic is right: previous payments, retentions, GST and the amount now due. Lenders also commonly require current contract works and public liability insurances, evidence that subcontractors are being paid, and any statutory statements required in the relevant state. Missing documents rarely change the certified value, but they can stop the drawdown being released.

Check	What the QS looks at	Common reason for a reduced certification
Work in place	Site inspection, trade by trade progress	Claim based on programme rather than actual progress
Contract breakdown	Each claim line against the agreed trade values	Front loading or values moved between trades
Variations	Written instructions, pricing, developer approval	Unapproved or disputed variations included
Materials	Installed work, proof of ownership for anything unfixed	Unfixed or off site materials claimed
Cost to complete	Forecast remaining cost against undrawn funds and equity	Project out of balance
Contingency	Contingency spent against risk still ahead	Contingency exhausted early in the build
Programme	Actual progress against programme and loan term	Delays driving up preliminaries and interest
Documentation	Claim arithmetic, insurances, subcontractor payment evidence	Missing or expired documents

This table summarises checks commonly applied by lenders’ quantity surveyors. Individual lenders set their own requirements in the loan agreement, and these should be confirmed for each facility.

What happens when the numbers do not line up

There are two different outcomes, and they are worth separating. The first is a reduced certification. The QS agrees that work has progressed but certifies a lower amount than the builder claimed, usually because of unapproved variations, unfixed materials or progress that is not as advanced as stated. The drawdown still proceeds, the builder is paid the certified amount, and the difference is carried forward to a later claim once it is resolved.

The second is a project out of balance, and it is more serious. Here the problem is not the claim but the budget. Consider a project with a $12 million facility, of which $7 million has been drawn. The undrawn balance is $5 million. If the QS forecasts that the remaining work will cost $5.6 million, there is a $600,000 shortfall. Most loan agreements require the developer to close that gap, typically by injecting further equity, before the lender will fund another dollar. Until it is closed, the builder’s claim may go unpaid regardless of how accurate it is, which puts pressure on the builder, the subcontractors and the programme.

Shortfalls rarely appear in a single month. They build up through variations approved without a funding source, contingency spent faster than planned, and delays that add preliminaries and interest. A monitoring QS who reports a narrowing margin early gives the developer time to respond. One who reports it only when the project tips out of balance leaves very few options.

How to keep drawdowns moving

Most drawdown delays come from the same few causes, and most can be avoided with some discipline on the developer and builder side. Agree the trade breakdown at contract and claim against it every month without reshuffling values. Approve variations in writing as they arise, and decide at the same time how each one will be funded. Hold back claims for unfixed materials unless the lender has agreed to fund them and the documentation is ready. Keep the programme updated so that the QS is not the first to notice a slip.

On the budget side, treat the cost to complete as a live number rather than a monthly surprise. Track contingency drawdown against the work still ahead, not just against the original allowance. Where the margin between undrawn funds and the forecast cost to complete is narrowing, raise it with the lender and line up equity before the project tips out of balance. Finally, submit the claim with everything the QS needs in one package: the claim itself, variation approvals, updated programme, insurances and subcontractor payment evidence. A complete package is usually certified faster than one that has to be chased.

Section 94 prepares bank prefunding reports and monthly progress claim and drawdown reports for lenders, developers and builders across NSW and Victoria. Our AIQS accredited quantity surveyors inspect the work, test the claim against the contract and report the cost to complete clearly, so that lenders can fund with confidence and projects keep moving.

Talk to Section 94 about drawdown reporting for your next construction project.

Frequently asked questions

What is a cost to complete report?

A cost to complete report is a lender’s independent check that a construction project can still be finished with the funds available. It compares the forecast cost of the remaining work with the undrawn loan and any developer equity still to be contributed, and is usually prepared monthly alongside the progress claim certification.

Who pays for the lender’s quantity surveyor?

The developer usually pays the fees, but the quantity surveyor is appointed to act for the lender. Their role is to give the lender an independent opinion on progress and funding, not to represent the developer or the builder.

What does “out of balance” mean on a construction loan?

A project is out of balance when the forecast cost to complete is greater than the undrawn facility plus committed equity. Most loan agreements require the developer to fund the shortfall, often with additional equity, before any further drawdowns are released.

Why did the QS certify less than the builder claimed?

The most common reasons are progress that is less advanced than claimed, unapproved or disputed variations, unfixed or off site materials, and claim values that do not follow the agreed contract breakdown. The difference is usually carried forward and can be claimed again once the issue is resolved.

How often does the lender’s QS inspect the site?

Typically once a month, before each drawdown, although the frequency is set by the loan agreement. Larger or higher risk projects may also have additional inspections at key milestones such as practical completion.

An EDC report is a small document with a long reach. The estimated development cost it certifies decides which approval pathway a development application follows, what assessment fees are payable and which lodgement requirements apply. Get it wrong in one direction and the applicant pays fees on a number that was never real. Get it wrong in the other and council’s own quantity surveyor picks it up, a request for information follows, and the application sits still while the report is redone. This guide covers what a compliant EDC report has to contain, the mistakes councils most often reject, and how to avoid them before the application is lodged.

EDC report prepared for a NSW development application

What an EDC report is and who has to prepare it

Estimated development cost replaced the two earlier NSW cost measures, capital investment value and the genuine estimate of construction costs, with a single definition. According to the NSW Department of Planning, Housing and Infrastructure’s planning circular PS 25-004, the regulatory changes commenced on 4 March 2024. The department’s EDC guidance sets out what the figure covers and who can prepare it.

The preparer requirement scales with the size of the project. Below $3 million*, the estimate can be prepared by the applicant or a suitably qualified person, and individual councils set their own detail requirements. Above $3 million*, the report should be prepared by a quantity surveyor who is a member of the Australian Institute of Quantity Surveyors (AIQS) or the Royal Institution of Chartered Surveyors (RICS), following the AIQS practice standard for EDC construction cost assessments and using the department’s standard form. For State significant development and infrastructure above that threshold the bar is higher again: the quantity surveyor must be AIQS certified or RICS chartered, and the report must be dated within 30 days of submission.

*Thresholds reflect NSW Planning guidance current at the time of writing and should be checked against the department’s published requirements before lodgement.

What goes in and what stays out

Most rejected EDC reports fail on scope rather than arithmetic. The department is specific about what the figure captures and what it excludes, and a report that blurs the line in either direction invites a query.

Included in EDC	Excluded from EDC
Design and erection of a building and its associated infrastructure	Land costs, including marketing and selling the land
Carrying out a work	GST (shown separately, not in the EDC figure)
Demolition of a building or work	Developer contributions and planning agreement costs
Fixed or mobile plant and equipment	Any part of the development that needs a separate approval
	Ongoing maintenance and use of the completed development

Source: NSW Department of Planning, Housing and Infrastructure, estimated development cost guidance. Always confirm inclusions and exclusions against the current guidance for the specific application.

The pitfalls councils reject most often

Reusing a figure prepared for a different purpose

A development usually carries several cost figures at once: a feasibility budget, a lender’s cost-to-complete, a builder’s tender, a Section 7.12 cost assessment and the EDC. Each has its own inclusions, exclusions and date. The most common shortcut is to lift the contract sum or the feasibility number into the DA form and call it the EDC. A contract sum can exclude demolition, external works, or authority fees the developer is carrying directly, and it usually excludes design. A feasibility budget often includes land, finance, marketing and contributions, all of which the EDC excludes. Either way the number is wrong, and council’s assessing officer or reviewing quantity surveyor will usually see the mismatch against the drawings.

Understating the cost to reduce fees

Assessment fees are calculated from the EDC, so there is an obvious temptation to keep the figure lean. Councils know this. Many engage their own quantity surveyors to benchmark submitted costs against comparable projects, and an EDC that sits well under market rates for the building type and floor area will be challenged. The consequences are not limited to a corrected fee. An understated EDC can put the application on the wrong pathway, so that a project which should have been assessed as regionally significant is lodged with council and has to be re-lodged. The delay costs far more than the fee saving ever could.

Overstating it by leaving excluded costs in

The opposite error is just as common and less often noticed, because nobody at council is motivated to reduce a fee. Reports that include GST in the headline figure, carry land or acquisition costs, or fold in contributions and planning agreement payments overstate the EDC. The applicant pays fees on money that does not belong in the calculation, and the inflated figure can push a smaller project across the $3 million threshold into a report standard it did not need to meet.

Missing scope the drawings clearly show

The EDC has to cover the full scope of works in the application, including staging. Reports regularly omit demolition of existing structures, site preparation and remediation, external works, landscaping, civil and stormwater works, retaining structures, and fixed plant such as lifts, mechanical plant or kitchen equipment. Where a project is staged, every stage covered by the consent belongs in the figure. Council’s reviewer works from the same drawings the applicant lodged, so anything drawn but not costed is easy to find.

The report does not match the drawings lodged

A cost report prepared on an earlier design revision is one of the fastest ways to draw a request for information. Floor areas change, basements grow or shrink, a level is added, and the EDC report still describes the scheme from three months ago. The standard form requires the report to list the documents relied upon, with their dates and revisions. If that list does not match the drawings in the DA package, the report is not certifying the development being applied for.

Not using the standard form, or leaving parts of it blank

For projects above $3 million the department expects the standard form: an executive summary stating the EDC, a description of the basis of preparation, a statement of the scope of the calculation and a detailed calculation schedule. The form also requires the preparer’s qualifications, a statement of any matters that might impair the objectivity of the calculation, and a certification that the calculation is accurate and covers the full scope of works at the date of submission. Reports that arrive as a one-page letter with a total, or that skip the certification, are routinely sent back.

Showing one total instead of two

The EDC excludes GST, but the department asks for the GST incurred and the sum of EDC plus GST to be shown as separate line items alongside it, because different fees are calculated on different bases. A report that shows a single figure, or that does not say whether GST is in or out, forces the assessing officer to ask.

No basis, assumptions or provisions

The detailed calculation schedule is meant to show, for each component, the cost, the quantities and rates behind it, the assumptions about site conditions and market, and the provisions carried for contingency and escalation. A schedule that lists trade totals with nothing behind them cannot be reviewed, and a council quantity surveyor who cannot review a figure will usually ask for it to be redone rather than accept it on trust.

Confusing the EDC with the Section 7.12 levy base

This one causes problems in both directions. The department’s guidance is clear that EDC does not affect development levies. Section 7.12 contributions are calculated on the proposed cost of carrying out the development under the relevant council contributions plan, which has its own inclusions and exclusions. An applicant who submits the EDC as the levy base, or who uses a Section 7.12 cost assessment as the EDC, has answered the wrong question. The two figures often sit close together, but they are not interchangeable, and councils assess them separately. A quantity surveyor can prepare a Section 94 / DA cost report for the contribution alongside the EDC report so that each figure is built for its own purpose.

Not updating the report after the application changes

Amendments during assessment, and modification applications after consent, change the scope and usually the cost. Where the change is material the EDC should be revisited, and for a modification application councils will normally expect a revised or confirmed figure. Submitting an amended scheme with the original report attached is a common and avoidable cause of delay.

What happens when a report is rejected

A rejected or questioned EDC report rarely ends the application. What it does is stop the clock. Council issues a request for information, the applicant’s consultant revises the report, and the application waits. Where council has engaged its own quantity surveyor to review the figure, the cost of that review may be passed to the applicant. Where the correction changes the assessment pathway, the application may need to be withdrawn and re-lodged. Each of those outcomes costs weeks, and in a staged project or one with finance conditions tied to consent dates, weeks are expensive.

How to lodge an EDC report that holds

The reliable approach is unglamorous. Prepare the report from the current DA drawings and record the revisions used. Measure the full scope shown, including demolition, site works, external works and fixed plant, and state the staging. Apply the department’s inclusions and exclusions and nothing else. Show the EDC, the GST and the total including GST as three separate lines. Use the standard form, complete every section, and have the report prepared and certified by a quantity surveyor who meets the requirement for the project size. Then check the date: for State significant projects the report must be no more than 30 days old at submission, and for every project a stale report is a weak one.

Section 94 prepares developer cost reports for development applications across NSW, including EDC reports in the department’s standard form, prepared by AIQS-accredited quantity surveyors and cross-checked against benchmarked projects of the same type. The aim is a figure council can accept the first time, so the application keeps moving.

Talk to Section 94 about an EDC report for your next NSW development application.

Frequently asked questions

What is an EDC report?

An EDC report certifies the estimated development cost of a proposed development for a NSW development application. Councils and the department use the figure to determine the approval pathway, calculate assessment fees and apply lodgement requirements. For projects above $3 million* it should be prepared by an AIQS or RICS quantity surveyor in the department’s standard form.

Who can prepare an EDC report in NSW?

Below $3 million*, the applicant or a suitably qualified person. Above $3 million*, a quantity surveyor who is a member of AIQS or RICS, following the AIQS practice standard. For State significant development and infrastructure above that threshold, the quantity surveyor must be AIQS certified or RICS chartered and the report must be dated within 30 days of submission.

Does the EDC include GST?

No. The EDC figure excludes GST, but the department asks for the GST incurred and the sum of EDC plus GST to be shown as separate line items in the report, because some fees are calculated on the GST-inclusive amount.

Is the EDC the same as the Section 7.12 levy amount?

No. The department states that EDC does not affect development levies. Section 7.12 contributions are calculated on the proposed cost of carrying out the development under the relevant council contributions plan, which has its own rules. The two figures are prepared separately and should not be substituted for each other.

Why did council reject my EDC report?

The usual reasons are scope that does not match the lodged drawings, excluded items left in or included items left out, a figure that sits well below market benchmarks for the building type, a report not in the standard form or missing its certification, a single total with no GST split, or a report dated on an earlier design revision. Most are fixed by having the report re-prepared from the current documents by a qualified quantity surveyor.

Section 94 remains a common term for developer contributions in NSW, although the legislation now uses Sections 7.11 and 7.12. For developers, planners and financiers, this distinction matters because each mechanism can affect feasibility, consent conditions and council contributions. A sound estimate begins by identifying which contribution pathway applies.

NSW councils administer local infrastructure contributions under the Environmental Planning and Assessment Act 1979 and relevant contributions plans. Section 94 provides quantity surveying services for council-facing cost reports, development cost assessments and related project advice. This guide explains the legacy terminology and how Sections 7.11 and 7.12 differ. It also covers EDC and the checks needed before relying on an estimate.

NSW construction site for development subject to Section 94 contributions

What is Section 94 and how does it relate to Sections 7.11 and 7.12?

Section 94 is the former name for NSW local infrastructure contributions. These are now principally addressed under Sections 7.11 and 7.12 of the Environmental Planning and Assessment Act 1979. The legacy term remains common in property and planning, but current project documentation should use the present legislative references.

Section 7.11 contributions respond to infrastructure demand

Section 7.11 allows a consent authority to impose a contribution where development creates additional demand for public amenities or services. The contribution must be authorised and calculated under the applicable council contributions plan. Calculation methods vary by council and contribution area. A plan may use dwelling numbers, additional residents, gross floor area, lots or another development measure. Existing lawful development, land dedication and indexation can also affect the result. For this reason, a Section 7.11 liability should not be estimated using a generic statewide rate. The current council plan for the property and development type is the starting point.

Section 7.12 uses a levy based on development cost

Section 7.12 is an alternative mechanism based on the proposed cost of carrying out development. It applies where the relevant contributions plan authorises the levy. A consent authority cannot impose both Section 7.11 and Section 7.12 contributions under the same development consent. The applicable percentage, thresholds, exclusions and special provisions must still be checked against the current statutory framework and council plan. Section 94 contributions should therefore not be budgeted by applying a remembered percentage to a headline construction cost.

The key distinction is that Section 7.11 responds to infrastructure demand, while Section 7.12 is tied to development cost. Identifying which mechanism applies is the first step toward estimating the contribution accurately.

How Section 7.11 council contributions are estimated

Estimating a Section 7.11 contribution is primarily a planning exercise. The council contributions plan sets the relevant works program, contribution catchments and calculation formulas for the area. Developers should review the plan early because the contribution can affect feasibility, acquisition assumptions and funding requirements. Leaving it until the design is advanced can expose a statutory cost that should have been allowed for earlier.

Start with the current contributions plan

The applicable plan should be confirmed using the site’s location, contribution catchment and proposed use. Councils may have several plans covering different precincts or development categories, which can be amended, replaced or indexed. The NSW Department of Planning, Housing and Infrastructure states that councils administer local infrastructure contributions. It directs applicants to the relevant council for specific plans and rates. The development team should use the plan to apply to the current application, rather than an earlier project schedule. Record the plan version and indexation date used so later reviews can trace the basis of the calculation.

Identify development units and available credits

A Section 7.11 calculation may depend on the net increase created by the proposal. The plan may distinguish between existing and proposed dwellings, land uses or other development units. Existing lawful development may also create a credit where the plan allows it. Supporting information may include subdivision plans, dwelling schedules, floor areas, evidence of existing use and staging details. If the proposal changes, the estimate should be reviewed because changes in yield, use or staging can affect the contribution.

Supporting information may include subdivision plans, dwelling schedules, floor areas, evidence of existing use and staging details. These documents help establish the inputs used in the council formula. If the proposal changes, the estimate should be reviewed because changes in yield, use or staging can affect the contribution.

A reliable Section 7.11 estimate depends on using the correct plan, development inputs and underlying assumptions. Those inputs should be checked again if the proposal or council plan changes before payment.

How Section 7.12 council contributions are estimated

Section 7.12 requires careful attention because the levy is based on the proposed cost of carrying out development. The applicable contributions plan authorises the levy, while the statutory framework governs how the development cost is assessed. The calculation should not simply use a builder’s contract price. The relevant cost base can include and exclude specific items, so it needs to be prepared for the contribution purpose.

Establish the correct cost of carrying out the development

The cost assessment should reflect the scope required by the legislation and council. Depending on the proposal, this can include building work, demolition, excavation, site preparation, engineering and other construction works. Some categories may be excluded. The treatment of land, finance, legal costs, management, fittings and other items depends on the applicable requirements. The estimate should be checked against current requirements rather than copied from a feasibility budget or contract sum.

For council submissions, a quantity surveyor can prepare a Section 94 / DA report from the current design information. The report documents the estimate basis and key assumptions for council review.

Apply the council plan only after the cost base is established

Once the relevant cost is established, check the council plan for levy methods, thresholds, indexation and payment rules. Special provisions may also apply in particular contribution areas. An understated cost base can reduce the provisional contribution, while including excluded costs can overstate it. Either can affect feasibility and raise questions during assessment.

The council plan should only be applied after the statutory cost base has been confirmed. This helps ensure the levy is calculated using the correct project value and current plan requirements. If the design, scope or staging changes, the cost assessment should be reviewed before the contribution is finalised.

A reliable Section 7.12 estimate requires the correct statutory cost base before applying the current council plan. If the design or scope changes, the assessment should be reviewed before the contribution is finalised.

Where estimated development cost fits into the process

Estimated development cost (EDC) is a defined NSW planning measure used for development pathways, assessment fees and application requirements. It replaced earlier planning cost measures with a single methodology. A key distinction is that EDC is not automatically the Section 7.12 levy base. NSW Planning guidance states that EDC does not affect development levies. The two calculations may use similar project information, but they serve different statutory purposes.

EDC reports have their own requirements

For developments with an EDC above $3 million*, NSW Planning states that an EDC report is required. For non-state-significant projects above this threshold, a qualified quantity surveyor should prepare the report. The surveyor should be a member of AIQS or RICS and follow the applicable AIQS practice standard and standard form.

*This EDC threshold reflects NSW Planning requirements current as of 2026 and should be checked against current guidance before lodgement.

The Australian Institute of Quantity Surveyors publishes the NSW EDC practice standard. An EDC report and a Section 7.12 cost assessment may both be relevant to the same project. However, the same figure should not be reused without checking the applicable requirements.

Keep each project cost figure tied to its purpose

Project teams may hold several cost figures, including feasibility budgets, lender budgets, EDCs, contract sums and Section 7.12 assessments. Each can apply different inclusions, exclusions, assumptions and valuation dates.

Using one figure for every purpose can create inconsistencies during assessment. Each cost report should therefore identify its purpose, valuation date, source documents and key assumptions. This helps prevent a feasibility figure from being mistaken for a council submission figure or lender assessment.

The practical rule is simple: use the cost measure required for the specific planning or contribution purpose. If the design or scope changes, each relevant cost assessment should be reviewed separately.

What can change the contribution before payment?

A feasibility estimate may not be the final amount payable. Indexation, payment timing, development amendments and other plan provisions can change the contribution after consent. The consent condition and current council contributions plan remain the controlling documents. A preliminary estimate should therefore be treated as a budgeting allowance until the contribution is formally calculated.

Design changes and staging can affect the calculation

Changes to dwelling yield, gross floor area, land use or staging can alter the inputs used under Section 7.11. For Section 7.12, changes to the works can affect the proposed development cost. A modification application may therefore require the contribution to be reviewed. The same applies where works move between approval packages or a project is divided into stages. Project records should clearly identify which scope sits within each consent and which assessment supports it. A revised estimate should identify the drawing revision and scope used so changes can be traced between project stages.

Indexation and payment dates matter

Many contributions plans include indexation, meaning an amount calculated at consent can change before payment. The payment trigger can also vary by development type and consent condition. For feasibility, the project team should record the base contribution and allow for possible indexation. This helps finance teams and lenders distinguish the consent-stage estimate from the contribution expected at the relevant payment milestone.

The contribution should therefore be reviewed whenever the project scope, staging or payment timing changes. Final funding allowances should be based on the current consent condition and council contributions plan.

Common errors when estimating council contributions

Errors often arise when teams use outdated contribution amounts, the wrong council plan or interchangeable cost measures. Changes to yield, staging or development scope may alter the calculation and should trigger a review. These mistakes can distort feasibility before the development application is lodged.

Common issues include:

using a previous council rate without confirming the current plan
overlooking existing-development credits or catchment rules
applying a Section 7.12 percentage to the wrong cost base
treating an EDC figure as automatically equivalent to the levy calculation

A structured review helps identify these assumptions early and makes them easier to update as the project changes.

Keep the cost assessment aligned with the design

A contribution estimate is only as reliable as the documents supporting it. Drawings, schedules and specifications should identify the assessed works, while the report records key assumptions where information is incomplete. Material design changes should be reflected in the estimate, particularly for demolition, external works, services, fitout scope and staging. Keeping the assessment aligned with the current design also helps planners, council and financiers. It shows which project version the developer cost report relates to.

The most reliable approach is to check the contribution method, cost base and project scope together. Updating the assessment when any of these changes reduces the risk of inaccurate budgeting or council queries.

When should a quantity surveyor review the contribution estimate?

Early quantity surveying input can test contribution assumptions against the current design and budget before issues arise later. For Section 7.11, the planning consultant will usually identify the applicable contributions plan and development inputs. For Section 7.12, a quantity surveyor can assess the proposed development cost against statutory and council requirements.

A review is particularly useful when:

the development is large, staged or has several uses
the council plan contains location-specific formulas or credits
the project cost base includes unusual demolition, remediation or infrastructure works
the consent authority requests a formal cost report or updated assessment

Early review supports contribution allowances for feasibility and council submissions while giving lenders clearer visibility over statutory costs.

Talk to Section 94 about quantity surveyor services and council-facing cost reports for your next NSW development project.

Frequently asked questions

What is Section 94 in NSW?

Section 94 contributions are the legacy term for NSW infrastructure contributions now generally imposed under Sections 7.11 or 7.12. Councils use these contributions to help fund infrastructure associated with development and growth. The applicable mechanism and payment rules depend on the council plan, legislation, ministerial directions and development proposal.

What is the difference between Section 7.11 and Section 7.12?

Section 7.11 generally links contributions to increased infrastructure demand, with calculations determined by the applicable council contributions plan. Section 7.12 is a levy based on the proposed cost of carrying out development, where authorised by the applicable plan. They are alternative mechanisms, so the same development consent cannot ordinarily impose both types of condition.

Is estimated development cost used to calculate a Section 7.12 levy?

Not automatically. NSW Planning states that EDC supports planning pathways, assessment fees and application requirements, but does not affect development levies. Section 7.12 uses the statutory concept of the proposed cost of carrying out development. Because the measures serve different purposes, developers should not reuse an EDC figure without checking the applicable requirements.

How can a developer estimate council contributions before lodging a DA?

Start by identifying the current contributions plan applying to the site and proposed use. For Section 7.11, review the plan’s development units, catchment rules, credits and indexation. For Section 7.12, establish the correct proposed cost of carrying out the development before applying the plan’s levy provisions. Planning and quantity surveying advice can then be incorporated into the feasibility model.

The strata building bond is one of the last statutory obligations a NSW developer deals with before a new strata building is occupied, and one of the easiest to underestimate. Under the Strata Schemes Management Act 2015, developers of certain residential strata buildings must lodge a bond of 2 per cent of the contract price for the building work before an occupation certificate can be obtained. Because the bond sits directly on the path to occupation, getting the amount right, and substantiating it properly, matters. This article explains how the strata building bond and inspections scheme works, how the bond amount is calculated, and where a quantity surveyor’s contract price report fits in.

strata building bond before occupation certificate in NSW

What the strata building bond is

The strata building bond and inspections scheme, often shortened to SBBIS, was introduced to protect owners corporations from the cost of defective building work. It generally applies to residential and mixed-use strata buildings of four or more storeys, which sit outside the home building compensation cover that applies to lower-rise work. For buildings within the scheme, the developer lodges a bond equal to 2 per cent of the contract price of the building work, which is held and administered through the NSW Government.

The bond is not a fee. If the building performs, the money comes back. Independent inspections during the first two years after completion identify any defective work, the builder is given the opportunity to rectify it, and the bond is available to fund rectification only where defects remain unresolved. Whatever is not used is returned to the developer.

How the 2 per cent is calculated

The bond is calculated on the contract price of the building work. Where there is a genuine arm’s length construction contract, that figure is usually straightforward. It becomes less straightforward in two common situations. The first is where there is no single contract price, for example where the developer engaged trades directly or the work was done under multiple contracts. The second is where the developer and the builder are connected parties, in which case the stated contract price cannot simply be taken at face value.

In these situations the contract price generally needs to be determined independently, and in practice this is done through a report from a quantity surveyor. The QS assesses the cost of the building work as if it had been procured at market prices, and that assessed figure becomes the basis for the 2 per cent bond. An understated figure risks the bond being rejected or challenged; an overstated one ties up more of the developer’s capital than necessary for up to several years.

Key milestones in the scheme

The scheme runs to a statutory timetable that starts at the occupation certificate. The table below summarises the main milestones as they generally apply.

Milestone	Indicative timing
Bond lodged	Before the occupation certificate is issued
Building inspector appointed	Within 12 months of the occupation certificate
Interim inspection and report	Between 15 and 18 months after the occupation certificate
Final inspection and report	Between 21 months and 2 years after the occupation certificate
Bond released or applied to defects	Generally between 2 and 3 years after the occupation certificate

For a developer, two of these dates matter most. The lodgement date sits on the critical path to occupation: a bond that is not lodged, or whose amount cannot be substantiated, delays the occupation certificate and with it settlements. And the release window at the end of the scheme is when capital comes back, which is worth modelling in the project cashflow from the start rather than treating as a distant afterthought.

Common pitfalls

Leaving the bond until the end

The bond is often addressed in the final weeks before completion, at the same time as every other close-out task. If the contract price then turns out to need independent determination, the QS report becomes an unplanned item on the critical path. Identifying early whether the project will need a contract price report removes that risk.

Related-party contracts priced below market

Where the builder and developer are connected, a contract price set below market value does not reduce the bond obligation; it invites scrutiny. An independent assessment prepared on market pricing is the cleaner path, and it stands up if the figure is ever questioned.

Poor cost records on directly procured work

Developers who procure trades directly sometimes reach completion without a consolidated record of what the building work cost. Reconstructing that figure late is slower and less certain than having a quantity surveyor establish it from the documentation while the project records are current.

How to prepare

Treat the bond as a line item from the feasibility stage: 2 per cent of the construction cost, held for roughly two to three years after completion. Confirm early whether your contract structure will support the bond calculation on its face, or whether an independent contract price report will be required. Where a report is needed, commissioning it ahead of the occupation certificate application keeps the bond off the critical path and the settlement timetable intact.

This is general information and not legal or financial advice. The strata building bond scheme is governed by the Strata Schemes Management Act 2015 (NSW) and its regulations, and requirements should be confirmed for each project with the administering NSW Government agency and appropriate advisers.

Need a contract price report for your strata building bond? Section 94 can help.

Frequently asked questions / People Also Ask

Which buildings need a strata building bond in NSW?

Generally, new residential or mixed-use strata buildings of four or more storeys, where the building work is not covered by home building compensation insurance. Lower-rise strata buildings are typically covered by that insurance instead and sit outside the bond scheme.

How much is the strata building bond?

2 per cent of the contract price of the building work. For a building with a $20 million construction contract, that is a $400,000 bond held for roughly two to three years after the occupation certificate.

When does the bond have to be lodged?

Before the occupation certificate is issued. Because settlements usually follow the occupation certificate, a late or unsubstantiated bond can delay the entire completion sequence.

Why would a quantity surveyor be involved in the bond?

Where there is no clear arm’s length contract price, such as directly procured work or a related-party builder, the contract price generally needs to be determined independently. A quantity surveyor’s report assesses the cost of the building work at market pricing and provides the substantiated figure the 2 per cent is calculated on.

Does the developer get the bond back?

Yes, to the extent it is not applied to rectifying defective work identified through the inspection process. If the final inspection finds no unresolved defects, the bond is returned, generally within the two to three year window after the occupation certificate.

The period between receiving builder tenders and signing a contract is short, but the decisions made in it shape the entire project. Once the contract is executed, the tender price becomes the contract sum, and everything the tender missed, excluded or understated becomes tomorrow’s variation. A tender review by a quantity surveyor, sometimes called a contractor tender analysis, is an independent check carried out in that window, before signing. Its purpose is to establish what each tender actually covers and whether the price is one the project can be delivered for. This article explains how the review works and what it typically finds. A tender review quantity surveyor plays a crucial role in this process. Additionally, engaging a tender review quantity surveyor ensures that financial risks are minimized and contractual obligations are clearly understood.

quantity surveyor tender review before contract signing

Why the lowest tender is not automatically the best

Tenders for the same project often differ by 10 to 20 per cent or more, and the difference is rarely explained by efficiency alone. A lower price may reflect a builder who genuinely wants the work and has priced it sharply. It may equally reflect missed scope, understated provisional sums, thin preliminaries or a program that cannot be achieved. None of this is visible from the tender total; it only becomes visible when the tenders are taken apart and the builder quotes are compared on a common basis.

Involving a tender review quantity surveyor not only clarifies the financial implications but also enhances the transparency of the process. This step is vital for ensuring that all parties involved have a clear understanding of the financial commitments.

For any project, the insights provided by a tender review quantity surveyor can lead to significant savings and better project delivery outcomes. It is essential to prioritize this review process before contract execution.

The commercial risk runs in one direction. A builder who discovers mid-project that the tender was too low has limited options: claim aggressively on variations, cut quality, slow down, or in the worst cases become insolvent. Each of those outcomes costs the owner more than the difference between the lowest tender and the next one. The purpose of a tender review is to identify that risk before the contract locks it in.

The review conducted by a tender review quantity surveyor is critical in identifying the key cost drivers and potential risks inherent in the tender submissions.

What the review covers

Ultimately, a tender review quantity surveyor provides invaluable insights that can help in making informed decisions that affect the project’s overall viability.

A quantity surveyor reviewing tenders works from the same drawings and specification the builders priced, which allows each tender to be tested against the documented scope rather than against the other tenders alone. The main checks are summarised below.

Having a tender review quantity surveyor involved from the outset can significantly alter the dynamics of the bidding process, fostering a more competitive environment.

By addressing the risks identified by the tender review quantity surveyor, owners can avoid unforeseen costs that may arise during the project’s lifecycle.

The findings of the tender review quantity surveyor can also aid in negotiating better terms with the builders, ensuring that every aspect is accounted for.

In summary, the work of a tender review quantity surveyor is indispensable in delivering a successful project.

Review area	What the QS is checking
Scope coverage	Whether each tender prices the full documented scope, and where items have been missed, excluded or qualified
Normalisation	Adjusting the tenders onto a common basis so that inclusions, exclusions and assumptions are compared like for like
Provisional and prime cost sums	Whether allowances for undefined scope are realistic, since understated allowances resurface later as variations
Preliminaries	Whether supervision, site establishment and other time-related costs are adequate for the program tendered
Rates and pricing levels	Whether trade pricing is consistent with current market rates, and where individual rates are unusually high or low
Program	Whether the construction period tendered is achievable, since an unrealistic program understates the true cost
Qualifications and departures	The contractual effect of each tender’s qualifications, and what they transfer back to the owner as risk

The output is a tender comparison report: each tender restated on a common basis, the true gap between them quantified, and the risks in each identified. In many cases the ranking of the tenders changes once they are normalised, because the cheapest tender as submitted is not always the cheapest tender once its exclusions and allowances are priced back in.

Understanding the scope and risks identified by the tender review quantity surveyor can provide assurance to all stakeholders involved.

Thus, engaging a tender review quantity surveyor early in the process is a proactive step towards ensuring project success.

Having insights from a tender review quantity surveyor can streamline the execution phase of the project.

A comprehensive approach involving a tender review quantity surveyor can lead to enhanced project outcomes.

What the review commonly finds

If you are considering engaging a tender review quantity surveyor, it is crucial to assess their experience and understanding of the specific project needs.

Understated allowances

The final report provided by a tender review quantity surveyor should comprehensively outline any identified risks and recommended actions.

Therefore, ensuring that your tender review quantity surveyor is thorough in their assessment can greatly benefit the project’s financial outcomes.

Ultimately, the role of the tender review quantity surveyor is to protect the interests of all stakeholders involved in the project.

Provisional sums for items such as excavation in rock, services connections or finishes selections are a common place for a tender to be quietly thinned. An allowance set at half its realistic value reduces the tender total today and produces a variation of the difference later, once the actual cost is known. The review tests each allowance against what the item is likely to cost.

Scope gaps between trades

Items that fall between trade packages, such as fire-stopping, flashings or builder’s work in connection with services, are frequently missed by one tenderer and included by another. Identifying these gaps explains part of the price difference and shows where variations would emerge.

Qualifications that move risk

A tender qualified as excluding latent conditions, or making the owner responsible for design coordination, may carry a materially different risk profile from a cleaner tender at a higher price. The review puts a value on those differences so they can be weighed properly, and flags matters that should be resolved in the contract before execution.

Where the review fits in the project

A tender review sits naturally between tender close and contract execution. Its findings feed directly into the negotiation: allowances to be corrected, exclusions to be priced or withdrawn, and qualifications to be resolved before the contract sum is fixed. For funded projects there is a further benefit. The lender’s quantity surveyor will test the contract sum at prefunding stage. A contract that has already been through an independent tender review is far less likely to be assessed as underfunded when the loan is being finalised.

The review is documentation-based, working from the tender submissions, drawings and specification, so it can be completed for projects anywhere without site attendance, and typically within the tender validity period.

This is general information and not legal or financial advice. Contractual matters arising from tender qualifications and departures should be confirmed with appropriate legal advisers before a contract is executed.

Need an independent tender review before you sign? Section 94 can help.

Frequently asked questions / People Also Ask

When should a tender review be done?

Between tender close and contract signing, while the findings can still influence the negotiation. Reviewing tenders after the contract is executed can explain problems but can no longer prevent them.

How many tenders should be reviewed?

Ideally all conforming tenders received, since the comparison between them is where much of the insight comes from. Where only one tender has been obtained, the review instead tests that single price against measured quantities and current market rates.

What does it mean to normalise a tender?

Normalising means adjusting each tender onto the same basis: adding back priced exclusions, aligning allowances, and accounting for differing assumptions, so the totals can be compared like for like. The normalised comparison often ranks the tenders differently from the submitted totals.

Can a tender review be used to negotiate with the builder?

Yes. The report identifies the specific allowances, exclusions and rates that need to be addressed, which gives the negotiation a factual basis. Builders generally respond better to a measured query about a specific allowance than to a general request to sharpen the price.

Is a tender review worth it on a smaller project?

The review fee is typically a very small percentage of the contract sum, while the pricing risks it identifies are commonly measured in whole percentage points. The smaller the project’s margin for error, the stronger the case for checking the price before it becomes a contract sum.

A quantity surveyor is a construction cost specialist who helps developers, builders and property owners plan, manage and control project costs from feasibility through to completion. Through accurate cost planning, budgeting and financial oversight, quantity surveyor services help projects stay commercially viable while reducing financial risk. Their expertise extends across every stage of the construction lifecycle, from early feasibility assessments and tendering to construction cost control and final accounts. This guide explains what a quantity surveyor does, the services they provide, how they differ from estimators and cost consultants, and when to engage one. As a Melbourne quantity surveying firm specialising in section 94 contributions and comprehensive construction cost management, Section 94 supports clients with independent advice to help achieve informed financial decisions and successful project outcomes.

quantity surveyor reviewing construction plans on site

What Is a Quantity Surveyor?

A quantity surveyor is a construction professional who specialises in managing costs throughout the entire lifecycle of a building or infrastructure project. Their role is to provide independent financial advice that helps developers, builders, architects, lenders, government authorities and property investors make informed decisions while maintaining cost certainty. By combining technical construction knowledge with commercial expertise, a quantity surveyor helps minimise financial risk, maximise value and keep projects on budget from concept to completion.

Unlike professionals who focus on a single stage of a project, a quantity surveyor can provide guidance from the earliest feasibility studies through tendering, construction cost control and final account preparation. Their responsibilities may include preparing cost plans, reviewing contractor tenders, assessing progress claims, monitoring project budgets and producing detailed financial reports. Quantity surveyors can also provide specialist advice on development-related costs, including Section 94 contributions, helping clients understand and manage these financial obligations. Many quantity surveyors in Australia are accredited by the Australian Institute of Quantity Surveyors (AIQS), demonstrating their commitment to recognised professional standards, ethical practice and ongoing industry expertise.

What a Quantity Surveyor Does Across a Project

A quantity surveyor provides expert cost management at every stage of a construction project, helping clients make informed financial decisions from initial planning through to completion. Their involvement improves cost certainty, reduces financial risk and supports successful project delivery by ensuring budgets remain realistic and controlled throughout the entire construction lifecycle.

Feasibility and Early Cost Planning

The earliest stages of a project often have the greatest influence on its financial success. During feasibility and early cost planning, a quantity surveyor prepares preliminary cost estimates, construction budgets and feasibility studies to determine whether a proposed development is financially viable. They assess likely construction costs, identify potential financial risks and provide cash flow forecasts that help clients make informed investment decisions before committing significant resources.

This early analysis can also highlight opportunities to improve value without compromising project objectives. By establishing realistic budgets from the outset, developers and builders are better positioned to secure finance, acquire suitable sites and confidently move into the design and planning phases. Engaging a quantity surveyor at this stage helps reduce the risk of unexpected costs later in the project, creating greater cost certainty and a stronger financial foundation for successful project delivery.

Tendering and Contractor Selection

Once project planning is complete, a quantity surveyor plays an important role in the tendering process by helping clients select the most suitable contractor. They can prepare or review tender documentation, assess submitted pricing and compare bids on a like-for-like basis to identify inconsistencies, omissions or unusually high or low costs. Rather than focusing solely on the lowest price, a quantity surveyor evaluates the overall value of each tender, considering factors such as scope, quality, risk and cost certainty. They may also identify opportunities for value engineering to improve project outcomes without compromising performance or design intent. This independent assessment helps developers and builders make informed procurement decisions, reduces the risk of budget overruns and increases confidence that the appointed contractor can deliver the project within the agreed financial framework.

During Construction: Progress Claims and Cost Control

A quantity surveyor continues to provide valuable financial oversight once construction is underway, helping keep projects on budget and reducing the risk of cost overruns. They assess contractor progress claims to verify that payment requests accurately reflect the work completed, providing independent advice that protects the interests of developers, builders and lenders.

Quantity surveyors also monitor project budgets, track expenditure against the original cost plan and evaluate the financial impact of contract variations as they arise. Regular cost reporting gives stakeholders a clear understanding of the project’s financial position, allowing informed decisions to be made before small issues become significant problems. Where construction finance is involved, a quantity surveyor may prepare drawdown reports to support staged funding releases. Through ongoing cost control and transparent reporting, they help maintain financial certainty and support successful project delivery from start to finish.

Completion and Final Accounts

As a project nears completion, a quantity surveyor helps finalise the financial aspects of the construction process by preparing and reviewing final accounts. This involves assessing the total project cost, verifying contract variations and ensuring all agreed work has been accurately valued. Any financial discrepancies between the client and contractor can be identified and resolved, helping to achieve a fair and transparent outcome for all parties.

Quantity surveyors also prepare detailed cost records that provide valuable insights for future developments and financial planning. By confirming that project costs align with contractual agreements and approved budgets, they help minimise the risk of disputes after construction has finished.

Quantity Surveyor Services Explained

Quantity surveying encompasses a range of specialised services that help improve cost certainty and financial control throughout every stage of a construction project. Common quantity surveyor services include:

Cost reports – Independent assessments of current and forecast project costs.
Cost summaries – High-level financial snapshots for clients, lenders and stakeholders.
Construction budgets – Detailed budgets that guide project spending from the outset.
Feasibility studies – Early-stage financial analysis to determine project viability.
Progress claims – Independent assessment of contractor payment claims.
Drawdown reports – Reports prepared for lenders to support staged finance releases.
Contractor tender analysis – Evaluation and comparison of tender submissions.
Section 94 contribution assessments – Specialist advice on development contribution costs and related financial requirements.

Cost Reports and Cost Summaries

Cost reports and cost summaries provide clients with a clear picture of a project’s financial position at every stage of construction. A quantity surveyor prepares these reports to track actual expenditure against the approved budget, forecast future costs and identify any potential financial risks before they affect project outcomes. Regular reporting gives developers, builders, lenders and other stakeholders the information they need to make timely, informed decisions. By highlighting cost variations and monitoring budget performance, these reports improve financial transparency and support effective project management.

Construction Budgets and Feasibility

Preparing accurate construction budgets and feasibility studies is essential for determining whether a project is financially viable before work begins. A quantity surveyor develops detailed budgets based on the project’s scope, current market conditions and anticipated construction costs, helping clients establish realistic financial expectations. Feasibility assessments evaluate potential risks, forecast project costs and identify opportunities to improve value while maintaining the project’s objectives. This early financial planning gives developers, builders and investors greater confidence when securing finance, purchasing land or progressing with design.

Progress Claims and Drawdown Reports

Progress claims and drawdown reports help ensure construction funding is released fairly and in line with completed work. A quantity surveyor independently assesses contractor payment claims to confirm they accurately reflect the progress achieved on site, protecting the interests of clients and lenders alike. They also prepare drawdown reports required by financial institutions to support staged finance releases throughout the project. These assessments provide transparency, reduce the risk of overpayments and give stakeholders confidence that project funds are being managed responsibly.

Contractor Tender Analysis

Contractor tender analysis helps clients compare tender submissions objectively and select the contractor that offers the best overall value. Rather than focusing solely on the lowest price, a quantity surveyor evaluates each tender for completeness, pricing accuracy, scope, quality and potential risks. This detailed assessment can identify inconsistencies, exclusions or hidden costs that may lead to disputes or unexpected expenses during construction. By providing an independent comparison of tender submissions, quantity surveyors support confident procurement decisions and reduce financial uncertainty.

Quantity Surveyor vs Estimator vs Cost Consultant

Although these roles all relate to construction costs, they have different responsibilities. Understanding the distinction can help you engage the right professional at the right stage of your project.

Quantity Surveyor	Estimator	Cost Consultant
Manages costs throughout the entire project lifecycle	Estimates construction costs before work begins	Provides strategic financial advice across construction projects
Prepares feasibility studies and cost plans	Prices labour, materials and subcontractor costs	Advises on budgets, investment decisions and cost strategies
Reviews tenders and contractor pricing	Primarily works during the tender stage	May provide commercial advice across multiple project stages
Assesses progress claims and monitors project costs	Limited involvement once construction starts	Often works alongside quantity surveyors on complex developments
Prepares final accounts and financial reports	Focuses on producing accurate cost estimates	Scope varies depending on the consultancy and project requirements

A quantity surveyor typically provides the broadest range of services, supporting clients from initial feasibility through to final accounts. While estimators primarily focus on pricing construction work and cost consultants provide broader commercial advice, a quantity surveyor delivers ongoing cost management and financial oversight throughout the entire project lifecycle.

When Should You Engage a Quantity Surveyor?

The best time to engage a quantity surveyor is as early as possible, ideally before purchasing land or committing to a development. Early involvement allows for accurate feasibility studies, realistic construction budgets and informed financial planning before significant decisions are made. A quantity surveyor can also provide valuable support before tendering, during finance applications and throughout construction by assessing progress claims, monitoring project costs and managing contract variations.

Their expertise remains valuable through to project completion, including the preparation of final accounts. Engaging a quantity surveyor from the outset helps improve cost certainty, reduce financial risk and minimise the likelihood of unexpected expenses, giving developers and builders greater confidence throughout every stage of the construction project.

If your development involves developer contributions, selecting a quantity surveying firm with specialist expertise in Section 94 cost reports and comprehensive construction cost management can help improve cost certainty while reducing financial risk throughout the project lifecycle.

How to Choose a Quantity Surveying Firm

Choosing the right quantity surveying firm can have a significant impact on the financial success of your project. Look for a firm with experience across projects similar to yours, along with a strong understanding of local construction practices and regulatory requirements. Professional accreditation through the Australian Institute of Quantity Surveyors (AIQS) is also an important indicator of industry knowledge and ethical standards. A reputable firm should provide transparent reporting, clear communication and independent advice that supports informed decision-making at every stage of the project.

Talk to Section 94 about quantity surveyor services for your next project.

Frequently Asked Questions:

What is the difference between a quantity surveyor and an estimator?

A quantity surveyor manages project costs throughout the entire construction lifecycle, from feasibility to final accounts. An estimator primarily focuses on calculating construction costs before work begins, usually to support contractor pricing and tender submissions.

When should I hire a quantity surveyor?

It is generally best to engage a quantity surveyor during the early planning stages of a project. Early involvement improves feasibility assessments, budget planning and cost certainty, while ongoing support throughout construction helps manage costs and reduce financial risks.

How much do quantity surveyor services cost?

The cost of quantity surveyor services depends on the size, complexity and scope of the project, as well as the services required. Many firms provide tailored proposals based on individual project requirements rather than fixed pricing.

Do I need a quantity surveyor for a small project?

Even smaller construction projects can benefit from engaging a quantity surveyor. Independent cost advice, realistic budgeting and financial oversight can help minimise unexpected expenses and improve decision-making, particularly where budgets or financing require careful management.

Are quantity surveyors accredited in Australia?

Many quantity surveyors are accredited through the Australian Institute of Quantity Surveyors (AIQS), the leading professional body for the industry. Choosing an accredited quantity surveyor provides confidence that they meet recognised standards for professional competence, ethics and ongoing development.

Before a lender releases construction funding, it needs independent confirmation that the project it is financing can actually be built for the amount being borrowed. That confirmation comes from a bank prefunding report, sometimes called an initial QS report, prepared by a quantity surveyor appointed to act for the lender. For developers, the prefunding review is a gateway: funding generally does not flow until the report is satisfactory. This article explains what the report covers, what lenders are checking for, and how borrowers can prepare so the review supports the loan approval rather than delaying it.

bank prefunding report before construction funding is released

What a bank prefunding report is

A prefunding report is an independent construction loan report, an assessment of the project carried out for the lender before the first drawdown. The quantity surveyor reviews the project documentation and reports to the lender on three broad questions. Is the construction cost realistic? Are the contract and program appropriate? And is the documentation complete enough for the project to proceed as described? Although the borrower generally pays for the report, the quantity surveyor’s duty is to the lender, and the report is addressed accordingly.

The prefunding report is the first of two roles the lender’s quantity surveyor typically performs. Once construction begins, the same QS usually assesses each progress claim and certifies drawdowns against work completed on site. Consistency between the two stages matters: the cost plan established at prefunding becomes the baseline against which every subsequent drawdown is measured.

What the lender’s quantity surveyor checks

While the scope varies between lenders, most prefunding reviews cover a consistent set of items.

The table below summarises the main checks and the question each one answers for the lender.

Item reviewed	What the lender wants to know
Construction cost	Is the contract sum sufficient to complete the works, tested against measured quantities and current market rates?
Building contract	Is the contract executed, appropriate for the project type, and consistent with the loan terms?
Program	Is the construction period realistic, and does it fit within the loan term with a sensible margin?
Approvals and documentation	Are development consent, the construction certificate and the design documentation in place and consistent with each other?
Builder capacity	Does the builder hold the required licences and insurances, and is the project within its demonstrated capability?
Cashflow and drawdown schedule	Does the projected drawdown profile match the program, and does the loan facility cover the peak funding requirement?
Contingency	Is there a reasonable allowance for the unexpected, appropriate to the stage of documentation and the nature of the site?

The central question underneath all of these is cost to complete. A lender’s primary risk in construction finance is a project that runs out of money partway through, because a half-built asset is worth considerably less than the funds already advanced against it. The prefunding report is the lender’s evidence, before any money moves, that the numbers allow the building to be finished.

Common issues that delay prefunding approval

A contract sum below the assessed cost

If the quantity surveyor’s measured assessment comes in above the contract sum, the lender will generally ask how the gap is to be funded before approving the facility. Sometimes the difference reflects a genuinely sharp builder price; sometimes it reflects scope missing from the contract documents. Either way, the question is easier to answer before the review than during it, which is one reason developers increasingly have the cost checked independently before approaching the lender.

Incomplete or inconsistent documentation

Unexecuted contracts, missing consultant drawings, conditions of consent not yet satisfied, and inconsistencies between the drawings and the contract scope are the most common practical causes of delay. The review cannot conclude until the documentation is complete, so assembling it properly the first time shortens the approval path considerably.

Program and loan term mismatch

A construction period that consumes the entire loan term leaves no room for weather, latent conditions or approval delays. Lenders look for a buffer between practical completion and loan expiry, and a program without one will attract questions.

How developers can prepare

The prefunding review runs fastest when the borrower treats it as a documentation exercise rather than a negotiation. That means providing the executed building contract, the full drawing set and specifications, development consent and construction certificate, the builder’s insurances and licence details, the construction program, and the cost breakdown behind the contract sum. Where the project has already been through a feasibility or an independent cost review, providing that material as well gives the lender’s QS a documented basis to work from.

It also helps to understand that the lender’s quantity surveyor is not there to renegotiate the project. A well-documented project with a realistic contract sum and program passes through prefunding with little friction, and the same QS then becomes a familiar, consistent point of review for each drawdown through construction.

This is general information and not legal or financial advice. Lender requirements vary between institutions and loan facilities, and should be confirmed with the relevant lender for each project.

Need a bank prefunding report for your project? Section 94 can help.

Frequently asked questions / People Also Ask

Who pays for a bank prefunding report?

In most cases the borrower pays the quantity surveyor’s fee, but the QS is appointed by and reports to the lender. The report is prepared for the lender’s reliance, which is why borrowers cannot simply substitute their own cost documentation for it.

How long does a prefunding report take?

Once complete documentation is provided, a prefunding report is typically completed within one to two weeks, depending on the size and complexity of the project. Missing or inconsistent documentation is the most common cause of longer timeframes.

What happens if the QS assesses the cost above the contract sum?

The lender will usually require the shortfall to be addressed before funding is approved, whether through additional borrower equity, a revised contract or clarification of the scope. It does not necessarily mean the project cannot proceed, but the gap has to be explained and funded.

Is a prefunding report the same as a progress claim report?

No. The prefunding report is completed once, before the first drawdown, and establishes the baseline for the project. Progress claim or drawdown reports are prepared repeatedly during construction, certifying the value of work completed before each payment is released. The same quantity surveyor commonly performs both roles.

Do all construction loans require a prefunding report?

Requirements vary with the lender and the scale of the project. Most development finance for multidwelling or commercial projects requires one, while smaller owner-builder or single-dwelling facilities may be assessed differently. The lender’s requirements should be confirmed early, as the report sits on the critical path to the first drawdown.

Development contributions are one of the more predictable costs in NSW property development, yet they are frequently missed or underestimated in feasibility studies. Because contributions are typically confirmed in the conditions of development consent, developers who have not budgeted for them can find a significant cost added to a project after the numbers have already been settled.

This month, we look at how Section 94 (Section 7.11) contributions and Section 7.12 levies affect project feasibility, why the estimated cost of works is central to the calculation, and how to establish a reliable contributions allowance before committing to a site or lodging a development application. Requirements vary between councils, so figures and thresholds should always be confirmed for each project.

budgeting development contributions in a project feasibility

A quick refresher: Section 94, Section 7.11 and Section 7.12

Section 94 contributions are development levies imposed by NSW councils under the Environmental Planning and Assessment Act 1979 (NSW) to fund the local infrastructure required to support new development. Following amendments to the Act in 2017, Section 94 contributions were renamed Section 7.11 contributions, and the alternative fixed levy under the former Section 94A became the Section 7.12 levy. Both sets of terms remain in common use across councils and planning documents, and the obligations are the same regardless of which term appears.

The two levy types are calculated quite differently, and a council will generally apply one or the other to a given development, depending on its adopted contributions plan.

Levy type	Basis of calculation	Typical application
Section 7.11 (formerly Section 94)	The additional demand the development places on local infrastructure, often assessed per additional dwelling, lot or	Developments that increase demand for local infrastructure, such as subdivisions and residential development in growth areas

	occupant under the council’s contributions plan
Section 7.12 (formerly Section 94A)	A fixed percentage of the estimated cost of works, with rates and thresholds set by the council’s plan	Development in areas where the council has adopted a flat-rate levy plan, commonly applied above a minimum cost-of-works threshold

Which regime applies to a site, and at what rates, is set out in the relevant council’s published contributions plan. This means the likely contribution can generally be researched early, well before a development application is lodged.

Why the estimated cost of works is central to the calculation

Where a Section 7.12 levy applies, the contribution is calculated directly from the estimated cost of works declared with the development application. The declared figure also influences other costs and requirements, including development application fees and whether the levy applies at all, as most plans set a minimum threshold below which no levy is payable.

This makes the accuracy of the estimated cost of works important in both directions. A figure that is too low may attract scrutiny from council, leading to requests for further information, delays or a requirement for independent verification, as many councils require the cost of works to be certified by a registered quantity surveyor above set value thresholds. A figure that is too high means the levy, and other value-based fees, are calculated on costs that will never actually be incurred. An independently measured estimate, prepared from the drawings using current construction rates, avoids both outcomes.

Why contributions belong in the feasibility

On smaller projects, contributions are sometimes treated as a minor allowance within general council fees. As project scale increases, this approach becomes riskier, because contributions scale with the size and value of the development while the allowance often does not.

Under a percentage-based Section 7.12 levy, the contribution on a larger project can run to tens of thousands of dollars. Under a Section 7.11 plan, contributions in some growth-area councils are assessed per additional lot or dwelling and can be substantial, particularly for greenfield sites where new infrastructure must be provided. The difference between greenfield and infill sites is one of the larger variables in the contributions system and can meaningfully affect whether a site stacks up.

Timing is the other consideration. Contributions are generally payable before a construction certificate is issued, which is often a point in the project where cashflow is already stretched, after land settlement and before construction funding is fully drawn. An unbudgeted contribution at this stage can affect both the project’s margin and its program. Lenders are aware of this, and construction finance assessments will typically consider whether statutory costs such as contributions have been properly allowed for.

How to establish a reliable contributions allowance

Review the council’s contributions plan early

Every NSW council publishes its contributions plans. Before committing to a site, or at the latest before design work begins, the applicable plan should be identified along with its current rates, thresholds and any exemptions. This establishes whether the project falls under a Section 7.11 plan, a Section 7.12 levy or another arrangement, and provides the basis for a realistic allowance in the feasibility.

Establish an accurate estimated cost of works

Because the estimated cost of works drives the Section 7.12 calculation and several related fees, it should be established through proper measurement rather than a broad rate per square metre or an informal builder figure. A quantity surveyor measures the proposed works from the available drawings and applies current market rates, producing a documented estimate that will withstand council review. For higher-value projects, most councils require the figure to be certified by a registered quantity surveyor in any case.

Carry the figures into the feasibility and the DA

With the contributions plan identified and the cost of works properly established, the expected contribution becomes a calculated line item in the feasibility rather than a general allowance.

Lodging a compliant cost report with the development application also supports a smoother assessment, as council officers are not left to form their own view on whether the declared cost of works is plausible.

This is general information and not legal or financial advice. Contribution rates, thresholds and reporting requirements vary between councils and are subject to change. Developers should always confirm current requirements with the relevant local authority.

Need a Section 94 cost summary report or registered quantity surveyor cost report for your DA? Section 94 can help.

Frequently asked questions / People Also Ask

When are Section 94 contributions payable?

Contributions are typically required to be paid before a construction certificate is issued, although the timing is set out in the conditions of development consent and can vary. Some councils offer deferred or staged payment arrangements in certain circumstances, which should be confirmed directly with the relevant council.

Do all developments pay development contributions?

No. Whether contributions apply depends on the council’s adopted contributions plan, the type and scale of the development, and any applicable thresholds or exemptions. Many Section 7.12 plans, for example, only apply above a minimum estimated cost of works. The relevant plan should be reviewed for each project.

Can contributions be estimated before lodging a DA?

Yes. Council contributions plans are public documents, and once the likely cost of works or development yield is known, the expected contribution can generally be calculated in advance. This allows the figure to be included in the feasibility before the site is committed to or the application is lodged.

What happens if the estimated cost of works is understated?

An understated cost of works can lead to council queries, requests for independent verification and delays to the assessment of the application. It can also produce inconsistencies across the documentation package. An independently prepared estimate reduces these risks by providing a defensible, properly measured figure from the outset.

Who prepares the estimated cost of works for a DA?

For lower-value projects, some councils accept a cost summary prepared by the applicant or designer. Above council-specific value thresholds, a report prepared by a registered quantity surveyor is generally required. A quantity surveyor can also prepare the estimate earlier, at feasibility stage, so the same figures carry through to the application.

Section 94 contributions are development contributions imposed by NSW councils to fund the local infrastructure required as a result of new development. Under the Environmental Planning and Assessment Act 1979 (NSW), these contributions were renamed Section 7.11 contributions following 2017 amendments. Both terms are still commonly used across councils, planning documents and development applications when assessing project obligations. This month, we explain how the system works, what developers pay for, how Section 94 cost summary reports are prepared, and provide general information about the process. Requirements vary between councils, so thresholds and reporting obligations should always be confirmed for each project stage requirements.

property development site requiring Section 94 contributions

What are Section 94 Contributions?

Section 94 contributions are development levies imposed by local councils in New South Wales to help fund the infrastructure required to support new development.

These contributions are made under the Environmental Planning and Assessment Act 1979 (NSW) and are now formally referred to as Section 7.11 contributions, although the older term remains widely used across the industry. They are typically applied when a development application is lodged and assessed, ensuring that growth does not place an unfair burden on existing public infrastructure or ratepayers.

Developers are required to pay Section 94 contributions when their project is expected to increase demand on local services or infrastructure. Each council sets its own contribution plan, which outlines how levies are calculated and what developments are impacted. These plans vary significantly between local government areas and may change over time depending on infrastructure needs and policy updates. As a result, developers must review the relevant council contribution plan early in the design and approval process.

Section 94 vs Section 7.11: What changed?

Section 94 contributions were renamed Section 7.11 contributions following amendments to the Environmental Planning and Assessment Act 1979 (NSW) in 2017. The reform formed part of a broader restructure of development contribution provisions designed to simplify terminology across the planning system. While the numbering changed, the purpose remained unchanged: developers contribute to the cost of local infrastructure required by new growth. Councils continue to apply contributions through adopted contribution plans, and the legislative framework still enables funding for infrastructure such as roads, parks, drainage and community facilities. Overall, the change was largely administrative, with no significant shift in how contributions are calculated or applied across New South Wales today.

Why both terms are still used

Despite the formal renaming to Section 7.11 contributions, the term Section 94 remains used by councils, consultants, and developers across NSW. This is largely due to legacy documentation, existing contribution plans, and long-standing industry practice. Many planning instruments and reports reference Section 94 which reinforces its use in dayto-day development assessment and reporting. To answer a common question: yes, Section 94 is the same as Section 7.11 contributions. Both refer to the same mechanism for collecting development contributions under the Environmental Planning and Assessment Act 1979 (NSW). The difference is purely terminology, meaning identical obligations regardless of which term appears in council documentation or assessment reports.

What development contributions pay for

Development contributions are used by local councils to fund the infrastructure required to support population growth driven by new development. As residential, commercial, and mixed-use projects increase demand on existing services, these contributions help ensure councils can deliver adequate infrastructure without placing the full financial burden on existing ratepayers.

Local infrastructure, open space, roads and community facilities

Section 7.11 (formerly Section 94) contributions are commonly allocated toward a range of essential public infrastructure. This includes upgrades and construction of local roads, drainage systems, and pedestrian footpaths that improve accessibility and transport safety. Contributions also support the creation and maintenance of parks, playgrounds, and sporting facilities that cater to growing community needs. In addition, funds may be directed toward libraries, community centres, and other public amenities that provide social, educational, and cultural services.

The exact infrastructure funded varies between councils, as each local government area adopts its own contribution plan. These plans define what works are eligible, how funds are apportioned, and which developments are required to contribute, meaning requirements can differ significantly depending on location and project type.

What is a Section 94 / cost summary report?

A Section 94 cost summary report is a document that estimates the total cost of construction works for a development. Councils require this report as part of the development application process to assess applicable contributions and ensure consistency in how project values are declared. It provides an independent and structured assessment of construction costs, helping planning authorities determine whether contribution thresholds are met. A quantity surveyor typically prepares this report to ensure accuracy, compliance, and alignment with recognised cost estimation standards used in development assessment.

Estimated cost of works and how it is calculated

The Estimated Cost of Works (ECOW) represents the total anticipated cost of constructing a development, including materials, labour, preliminaries, and contractor margins. It may also include site preparation, demolition, and associated constructionrelated expenses. However, exclusions often apply, such as land value, financing costs, and certain professional fees, depending on council guidelines. Councils require consistency in how ECOW is calculated to ensure fair assessment across all developments. Accuracy is critical, as underestimating or overestimating project costs can impact contribution calculations and may result in delays during the development approval process.

Which report you need by project value

Project Value	Report Required	Who Can Prepare It
Lower-value projects (Greater than $100,000*)	Cost Summary Report	Applicant/designer (where permitted by council requirements)
Higher-value projects (Greater than $500,000*)	Registered Quantity Surveyor Cost Report	Registered Quantity Surveyor

For lower-value developments, councils may accept a simpler cost summary prepared by the applicant or project designer, depending on local requirements. For higher-value projects, a registered quantity surveyor’s report is typically required to ensure independent and defensible cost estimation.

It is important to note that thresholds and reporting requirements vary between councils and are subject to change.

*This is general information and not legal advice. Developers should always confirm the current requirements with the relevant local authority before preparing documentation.

How a quantity surveyor prepares your cost report

A quantity surveyor begins by thoroughly reviewing all available project documentation, including architectural plans, engineering drawings, and construction specifications. This review establishes a clear understanding of the proposed development, its scope, and its construction methodology. The project scope is carefully analysed to identify all elements that contribute to the overall build cost, including structural components, finishes, services, and external works. This detailed assessment ensures that no key cost items are overlooked and that the report accurately reflects the intended design as submitted in the development application.

Once the scope has been assessed, the quantity surveyor applies recognised estimating methods to calculate the Estimated Cost of Works. These methods are based on industry standards and current construction market rates to ensure consistency and reliability. The resulting documentation is prepared in a format that aligns with council requirements, supporting a smoother assessment process. A professionally prepared report helps reduce delays in DA approvals by minimising queries from planning authorities and providing a clear, defensible cost structure. This supports council officers in efficiently assessing contributions and ensures the development application proceeds with fewer administrative obstacles.

When and how to lodge with your development application

A Section 94 or cost summary report is typically submitted as part of the development application lodgement, alongside architectural plans, engineering drawings, and other supporting documentation required by council. It forms part of the overall assessment package reviewed by the planning authority. Once lodged, council officers use the report to assess the estimated cost of works and determine whether development contributions apply under the relevant contribution plan, forming part of the broader DA assessment process.

Submitting a complete documentation package is critical to avoid unnecessary delays. If a required cost report is missing or incomplete, councils may place the application on hold or request additional information, extending assessment timeframes. In some cases, this can also result in resubmission requirements, further delaying approval.

Developers should always check the specific requirements of the relevant local council before lodgement, as documentation standards, thresholds, and supporting evidence can vary significantly between jurisdictions.

Common mistakes that delay DA approval

Delays in development applications often occur due to avoidable errors in cost reporting and documentation, particularly where Section 94 contribution requirements are not correctly addressed.

Incorrect Estimated Cost of Works is a frequent issue, often caused by incomplete scope interpretation or outdated cost assumptions. Outdated report formats can also lead to rejection, as councils require specific documentation structures aligned with current planning guidelines.

Missing supporting documentation, such as plans or specifications, can prevent accurate assessment of the project. Misunderstanding council thresholds is another common problem, with requirements varying significantly between local government areas.

Relying on informal builder estimates instead of a compliant quantity surveyor report often results in inconsistent or non-defensible costings. In addition, inconsistent project values across submitted documents can trigger further review and delay approvals.

Engaging qualified quantity surveyor services early in the design process helps ensure accurate reporting, compliance with council requirements, and a smoother development application pathway.

Need a Section 94 cost summary report for your DA? Section 94 prepares registered quantity surveyor reports.

Frequently asked questions / People Also Ask

Is Section 94 the same as Section 7.11?

Yes. Section 94 contributions were renamed Section 7.11 contributions following amendments to the Environmental Planning and Assessment Act 1979 (NSW) in 2017. The terminology changed, but the underlying purpose and application remain the same, with both referring to development contributions used to fund local infrastructure.

How much are Section 94 contributions?

There is no fixed amount for Section 94 contributions. Costs vary depending on the local council, the type of development, and the applicable contribution plan. Each council sets its own rates based on infrastructure needs, meaning contributions can differ significantly between locations and project types.

Who can prepare a Section 94 cost report?

A Section 94 cost report is typically prepared by a qualified quantity surveyor, particularly for higher-value developments. Some councils may allow simpler cost summaries to be prepared by applicants or designers, but registered quantity surveyor reports are generally required for more complex or higher-value projects.

When do I need a registered quantity surveyor’s cost report?

A registered quantity surveyor’s cost report is usually required when a development exceeds a council’s specified value threshold or involves more complex construction works. Requirements vary between councils, so it is important to check the relevant local planning controls before lodgement.

How is the estimated cost of works calculated?

The estimated cost of works is calculated based on construction scope, including materials, labour, preliminaries, and contractor margins. It excludes items such as land value and financing costs. Quantity surveyors apply recognised industry methods to ensure the estimate is accurate, consistent, and compliant with council requirements.