Self built house strucural indemnity Insurance for mortgage?

W

wexford99

Guest
We are in the process of buying a new house that was a self build by a couple who are selling it.

Because it was a self build by direct labour there are no homebond or premier guarantees.

However the mortgage lender refuses to issue a cheque without a structural guarantee.

They have stated that only a homebond, premier or CIF registered builders guarantee will suffice.

There is an architects certificate of compliance in place which has been sent to the lender with a copy of the architects indemnity insurance.

The architect has certified that he visited and inspected the property while being built and each stage of the build was completed satisfactorily, to building regs and is

The lender has refused to accept this as satisfactory and keeps asking for the above.

Searching high and low, asking our solicitor, other solicitors, other architects etc no-one, and I mean no-one has ever heard of the architects certificate of compliance and indemnity insurance not being satisfactory to a lender.

This isn't some obscure lender either but a well known high street bank.
 
Hi Wexford99,
I am a mortgage broker and deal with direct labour every day and never encounter problems.
What your lender is looking for is a letter from a qualified Architect/Engineer stating that he/she supervised the construction of the property. This person must have Professional Indemnity Insurance. A Certificate of compliance by the same person is required also on completion.
You mention that the Architect has certified that he visited and inspected the property while being built. He needs to confirm that he actually supervised the construction from start to finish.
I find it hard to believe that Solicitors/Architects would think that just a certificate of compliance which only confirms that the property was built in accordance with planning permission and building regulations would be acceptable.
If the person you are purchasing from got a mortgage on the property he would have to supply a letter of supervision from an Architect/Engineer to the lender. If however the property was built without Architect/Engineer supervision, you will have problems getting a mortgage on the property.
Hope this helps
Spin
 
Ah ok so there should be another letter or cert seperate from the certificate of compliance?

So I (or our solicitor) should be asking for a "letter of supervision"?

I have a copy of the compliance cert which states
"I made periodic inspections of "The Relevant Works" during the construction thereof AND in my opinion the construction of the same complies substantially with the Grant of Permission in paragraph 3 hereof and substantially with all The Buildings Regulations applicable thereto"
Click to expand...

I can PM you the full transcript of the cert if you wish.



I assume this is not the same as a letter of supervision? Perhaps the architect did not supervise the house?

What would happen to anyone who self built a house and didn't have a supervising engineer/ architect?

W
 
You can pm me the cert. no problem but as I mentioned earlier iit appears only to be a certificate of compliance.
A new property has to be either covered by homebond or supervised by a qualified Architect Engineer with professional indemnity insurance. This is normally a 6 point letter. I can email fax you one and you can check to see if the Architect will sign it.
The person that is selling you the property has to know if the Architect that issued the cert of compliance actually supervised the construction.
Without this you wont get a mortgage and seller will have a problem selling
Spin
 
Bank of Ireland's official position on this is that only one of the following three items are acceptable for cheque issue.



  1. Homebond
  2. Premier Guarantee
  3. Guarantee from a CIF registered Builder
An architects Certificate of Compliance and Letter of Supervision coupled with Professional Indemnity Insurance is NOT acceptable.

I have a letter stating same from Bank of Ireland in post to me and will PM a copy of it (confidential details blanked) to anyone interested.

For anyone building there own home via direct labour this will have major repurcussions, checkout how much Homebond or Premier charge.

If you have already built your house using direct labour you may have difficulty selling it later particularly if your purchaser is using Bank of Ireland if you don't have one of the above in place.

W
 
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