Refund survey fees, what are the chances?

monandy

We are using a broker and applied for a mortgage to purchase a property which is currently 8 bedsits, with the idea of converting it back to one property. Our broker had a decision in principle from the bank lending us the money, so we proceeded with the survey.
Survyors report came back, little bit of damp, usual stuff etc.
The bank now says because it is multiple occupancy they will lend us the money but retain 100% of the loan untill is is returned to one property!!!
I am now in a catch 22 situation as I cannot purchase the property to undertake the work without the loan and I cannot undertake the work without owning the property.
My issue is this. The retention of 100% of the loan is based on the property not being a single occupancy at present. Surely the bank must have been aware of this (decision in principle) before I was asked to pay £400 for a survey?
What are the chances of reclaiming this money as the survey was not required due to the property not fitting the banks mortgage criteria for a single occupancy home?
My broker assures me the bank was aware of the properties multi occupancy status during the decision in principle.
The bank? Part of the Santander group; Alliance & Leicester!
What are the chances of getting this money back and who do I chase for the money? Bank, broker or both?
Any help or guidance would be really helpful as this situation seems grossly unfair. Thanks

unite79

I would ask the borker to put a complaint in writing to A+L - In it I would ask him to provide proof that he had advised them the property was currently 8 bed-sits and was being returned to one - I was also ask him to put details off who he spoke to, to confirm this would be ok - If Your broker is unable to do this - I would suggest you complaint should be aimed at them - Clearly this is outside of standard policy, and any Broker worth his SALT would have documented who sanctioned the loan.

yelf

Check that your broker declared the situation on the app - if not take him on. other wise = as above

monandy

Thanks people:money:

Mrs_Bumble

How did A&L know that the house was currently being used as HMO? Did he speak to A&L first and get the theory cleared first? If he did then he/she as a path of recourse, if they assumed because they put the address in and that improvement were planned that A&L would realise??

I would have expected any lender to impose a retention with this scenario as from their point of view they need to ensure that the work is done.

RufusA

monandy wrote: »

I am now in a catch 22 situation as I cannot purchase the property to undertake the work without the loan and I cannot undertake the work without owning the property.
Any help or guidance would be really helpful as this situation seems grossly unfair. Thanks

Have you spoken to your solicitor and the vendor to see what the options are?

It's not uncommon to be able to get an access undertaking for an unoccupied property between exchange and completion. Obviously they'd have to fully agree, and you'd have to imdenify them against any damage caused if the completion fell through.

Does depend a lot on your finances i.e. if you can afford to carry out the works without the mortgage, and whether the work is going to be quick, or an extended DIY project over many months.

HTH - Rufus.

koexelek

I am pretty certain the A & L would not have known it was a HMO property prior to the survey being carried out, otherwise, they would have known instantly that it was outside of criteria, and would not have wasted your money on a survey.