# building a house without a mortgage



## choccichip (5 Feb 2011)

Plan to build a house from savings bit by bit. i know is is necessary to get an engineer to sign off on stages when you are drawing down a mortgage, but do you need one if you are not dealing with the banks. Do you still need the stages of the build signed off on. our quote for this is plus foundation drawings is 1,200. Have not yet told the builder we are building in cash. Will he still have a role.

Any one with any experience in cash builds that would be great,


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## mf1 (5 Feb 2011)

The expression "Dear God in Heaven" springs to mind!

It does not matter whether you are paying cash or getting a mortgage. You still need a house to be built properly. Either the builder does that and you are satisfied with that or having an engineer around to keep an eye on it might be a good idea. At some stage the house will be sold ( you may well be dead and buried) and there is very little prospect of anyone buying a house that has no engineer's certificate of compliance with planning permissin and building regs.

I strongly suggest that you think through your plans more thoroughly so that you know what you are getting into. There are lots of very helpful threads on this site. 

mf


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## Docarch (5 Feb 2011)

mf1 said:


> At some stage the house will be sold


 
....or at some stage you may need to get a loan against the house, at which point you will need opinions on compliance.


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## Sconhome (6 Feb 2011)

mf1 said:


> The expression "Dear God in Heaven" springs to mind!



+1

I reckon ONQ is busy drafting a very long reply to this post.

choccichip it doesn't matter how you are planning to pay for building your house. The rules and regulations apply re planning, building regulations and all the other annoying 'extra costs' such as architect, engineer, QS, insurance, sub contractors etc.

A word of advice, if you intend building for cash ie to avoid VAT on materials, labour etc and to try and duck under the radar. There is a workd of pain coming your way.

Please dont get me wrong, I wish you all the best but for your sake try not to be naive about the process. 

Yes, for cash you can drive a great bargain. You are in the controlling seat and can negotiate prompt payment discounts etc with builders, subcontractors etc. Also materials.

On the other hand because you are paying cash and not being issued certificates by the bank how is anyone contracting to you to know you actually have the money?

If you plan to build direct labour you will be considered the main contractor adn you will be responsible for insurance and managing the tax clearance of your suppliers and contractors. If you do not apply the RCT regulations YOU can be liable for the 35% that should have been deducted plus fines of €3,000 in each and every case of incorrect payment.

Please follow the correct path to your build, negotiate hard, but be clever.


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## Sandals (6 Feb 2011)

We went down your route, had savings and borrowed 40K from credit union five years ago, now OWN our own home 151sq metres, happy days, no banks, etc, my husband very handy/knowledgeable in terms house building, we only had plumber, electrician, window company, plaster and block layer employed in the house, everything else ourselves. five years on no problems just tweaks here and there like fitted solid fuel stove in open fireplace, fully insulated the attic after himself skimped  on the job (not realising the NBance of it) and put in large glass unit with double doors closing off sunroom to rest of house etc.  

Cash will def get u a better deal, at least five/six years ago it did. Good luck in your venture,


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## onq (6 Feb 2011)

ONQ took the weekend off to advise family members on setting up facebook pages believe it or not 

I have very little to add to the excellent and competent advice given here.
It is quite possible to build something that looks compliant but which is not complaint.
As others have told you OP and notwithstanding Sandals's husband's expertise in building, you need to know what you're doing.

Medical analogies seem to be the order of the day on AAM this month, so - 
Just because you can use a pliers and own a bottle of whiskey, it doesn't make you a dentist.
Some day soon I hope to see a law requiring all buildings to be built using competent design professionals appropriate to the build at all stages.


ONQ.

 [broken link removed]

 All advice on AAM is remote from the situation and cannot be relied   upon                                                                                 as  a          defence    or         support  -     in       and     of               itself   -                 should                 legal                  action            be                 taken.
 Competent legal and building professionals should be asked to advise in                                                                                    Real      Life      with        rights    to         inspect        and             issue                 reports       on         the                             matters       at                hand.


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## Trilogy 1982 (7 Feb 2011)

A house can be built without an engineer but for the sake of €1200 get one. Its his job to take responsibility for decisions that you or your builder may not be qualified to. Also if you have any quality of work issues as you go along, it gives you more negotiating power.

Are you sure you've budgeted correctly on how much you'll need to finish your house. There are an awful lot of hidden costs involved in building direct labour.  it all adds up and all of a sudden your savings can vanish long before you are where you though you'd be.  If you do ever need to go down the mortgage where will you get your downpayment.

Maybe you should get mortgage approval before you start spending. You need never draw down but at least you have the security of knowing its there.


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## Sconhome (7 Feb 2011)

Trilogy 1982 said:


> A house can be built without an engineer



This is not good advice. Who is qualified to design and certify your foundation construction? Do not rely on an architect or even an experienced builder for this information. Their PI will not cover this, only a civil or structural engineer can perform this task.




Trilogy 1982 said:


> Are you sure you've budgeted correctly on how much you'll need to finish your house. There are an awful lot of hidden costs involved in building direct labour.  it all adds up and all of a sudden your savings can vanish long before you are where you though you'd be.  If you do ever need to go down the mortgage where will you get your downpayment.
> 
> Maybe you should get mortgage approval before you start spending. You need never draw down but at least you have the security of knowing its there.



This is excellent advice and well worth noting. It also gives your construction team peace of mind when it comes to getting paid!


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## T McGibney (8 Feb 2011)

Sconhome said:


> If you plan to build direct labour you will be considered the main contractor adn you will be responsible for insurance and managing the tax clearance of your suppliers and contractors. If you do not apply the RCT regulations YOU can be liable for the 35% that should have been deducted plus fines of €3,000 in each and every case of incorrect payment.



This is untrue. The OP has clearly no business involvement in the construction industry that would bring him into the RCT net in relation to works commissioned on the building of his own home.


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## Trilogy 1982 (8 Feb 2011)

Sconhome said:


> This is not good advice. Who is qualified to design and certify your foundation construction? Do not rely on an architect or even an experienced builder for this information. Their PI will not cover this, only a civil or structural engineer can perform this task.QUOTE]
> 
> Point taken. Poor choice of phrase on my part. I merely meant to say that it can technically be done but is not a good idea. The same way a hammer can be used to drive a screw!  I think we're both in agreement on the importance of an engineers role in a build.


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## Sconhome (8 Feb 2011)

T McGibney said:


> This is untrue. The OP has clearly no business involvement in the construction industry that would bring him into the RCT net in relation to works commissioned on the building of his own home.



My apologies on this you are correct. I confused the plans of the Revenue enforcement section vis a vie direct labour builders with those of Principle contractors.

The main message at this meeting was as the construction sector was declining the RC were using public resources - planning lists, whistle blowers etc to track the shadow economy.

The call from the CIF members was for unconnected homebuilders going direct labour to be considered as principle contractors as a counterpoint to the race to the bottom. This was to level the playing field per se.

See below an excerpt from a CIF meeting held in 2010 which featured the Revenue inspectors.
*6.	Where a homeowner engages contractors directly to  build a house, are they obliged to operate RCT on payments made to the  contractors (self-builds)? What is Revenue doing about the possible shadow economy issues in this  scenario?*

  For RCT to apply, the homeowner must be a principal for RCT purposes  i.e. a person carrying on a business which includes the erection of  buildings or the development of land, or the manufacture, treatment or  extraction of materials for use in construction operations, or a person  connected with a person (which includes any individual, company or any  unincorporated body of persons) carrying on such a business.
   However, if the homeowner engages a main contractor (principal) who  subcontracts some of the work to other contractors (subcontractors),  then the main contractor is required to operate RCT on all payments to  these subcontractors.
  Revenue has always maintained a significant presence in monitoring  activities in the construction sector and is involved in an ongoing  programme of construction related audits, compliance interventions and  site visits, including one off housing, repairs, maintenance and  enhancements. The Revenue Commissioners take a proactive approach to  tackling non-compliance and abuses in the construction sector, often as  part of Joint Investigation teams with our colleagues in the Department  of Social Protection and the National Employment Rights Authority  (NERA). The nature of the construction sector is that it is mainly cash  based, mobile and labour intensive and these features pose compliance  challenges for Revenue. While cases are mainly sourced through  information in Revenue’s systems, it also uses intelligence gathered  from a number of third party sources, including the general public.


The full session is [broken link removed]



I suppose my point would remain for the OP to be tax compliant when dealing with his contractors to avoid any possible inspection and difficulty resulting from engaging with non tax compliant contractors. The revenue have the power to suspend a site pending inspection.

I know of an occasion where a compliant contractor with registered employees and correctly recorded subbies had to suspend work on a private extension while the inspectors checked out everybodies status.

I still support the OP on his venture and continue to wish good fortune. Just take the easier road to his goal.


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## Sconhome (8 Feb 2011)

Trilogy 1982 said:


> I think we're both in agreement on the importance of an engineers role in a build.



Absolutely, they are not called construction professionals for nothing.


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## onq (8 Feb 2011)

Sconhome said:


> This is not good advice. Who is qualified to design and certify your foundation construction? Do not rely on an architect or even an experienced builder for this information. Their PI will not cover this, only a civil or structural engineer can perform this task.



Normally we are at one yet in this case I will qualify your comments.

I studied mechanics [a branch of structures] for one year and structural engineering for four.

As someone who never got less than 70% in my engineering exams [straight "B"'s], specifying foundations and structures for simple buildings are well within my competence.

However I CHOOSE to ask the client to retain an engineer even for houses precisely because of the perception you write about.

Even a graph paper sketch with calculations for foundation and beam sizes written on it is acceptable providing the engineer is happy with the built work and signs his cert.

ONQ.

 [broken link removed]

 All advice on AAM is remote from the situation and cannot be relied    upon                                                                                  as  a          defence    or         support  -     in        and     of               itself   -                 should                  legal                  action            be                 taken.
 Competent legal and building professionals should be asked to advise in                                                                                      Real      Life      with        rights    to         inspect         and             issue                 reports       on          the                             matters       at                hand.


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## choccichip (9 Apr 2011)

thanks for all the info...appreciate it. Really need to do a little more research!


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## onq (10 Apr 2011)

choccichip said:


> thanks for all the info...appreciate it. Really need to do a little more research!



choccichip,

Seeing you talking that new attitude towards a complex undertaking is all the thinks I need, I cannot speak for others.

It makes my day when someone pauses in their gallop and starts to plan ahead and look for pitfalls so they can avoid them and have a smooth running project.

Welld done on that and best of luck with it.

Let us know how you get on.

ONQ.

 [broken link removed]

 All advice on AAM is remote from the situation and cannot be relied     upon                                                                                   as  a          defence    or         support  -     in         and     of               itself   -                 should                   legal                  action            be                  taken.
 Competent legal and building professionals should be asked to advise in                                                                                        Real      Life      with        rights    to          inspect         and             issue                 reports       on           the                             matters       at                 hand.


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## RKQ (26 Apr 2011)

OP would you buy a second hand car for a few grand without getting a Mechanic to check it over for you? I wouldn't buy anything for cash without advice.

Why do you think you can build a house without professional advice, on the word of your Builder? If it was that easy everyone would do it and there wouldn't be any Architects, Engineers or Architectural Technicians.
Construction is complicated - compliance with Planning & the Building Regulations is required by Law. Do not be niave - seek & retain professional advice. Rates are competitive so ring around for at least 3 quotes.

€1200 for an Engineer / Technician to visit site 7 to 10 times during construction is very reasonable and could save you a fortune. At the very least it will give you peace of mind.

For your own sake, follow the advice above.


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