mortgage on new conversion without professional consultants certificate ??

chrichianti

My bank - HSBC - denies mortgage for a flat in a new conversion (public house) without one of the 10 years warranties. The developer does neither offer such a warranty, nor does he offer a CML professional
consultants certificate, signed by an individual architect. What he can do is a certificate signed on behalf of a limited company. Does anybody know if such a "paper" can / would be accepted by any lender ?
thank you.

GMS

A limited company could go bust the day after completion meaning it is literally not worth the paper it is written on.

Thrugelmir

Seems as if the developer is going to struggle to sell the properties. Without an insurance backed warranty of some kind.

chrichianti

GMS wrote: »

A limited company could go bust the day after completion meaning it is literally not worth the paper it is written on.

This is what I feared. Is my solicitor right to say that the developer will have problems to sell his apartments as no lender will give a mortgage with this kind of certificate ?? I can pay cash but of course I am afraid
that at the end I will have paid for an apartment in an "empty house", due to missing buyers, because they cannot obtain a mortgage.

chrichianti

“Risk comes from not knowing what you’re doing ---- you are absolutely right, but not being a UK-resident I had no idea about all this and
neither my bank nor my solicitor, nor the estate agent who sells the apartments have given me any beforehand information......

GMS

If you buy for cash and try to seel it on within 10 years then you may find yourself unable to sell.

Seems mad for a developer to not get the appropriate warranties. What else have they cut corners on?

Thrugelmir

chrichianti wrote: »

neither my bank nor my solicitor, nor the estate agent who sells the apartments have given me any beforehand information......

Responsibility lies entirely with the developer.

Wh05apk

Thrugelmir wrote: »

Responsibility lies entirely with the developer.

The developer can build and try to sell what they like, that is why you pay a solictor to check everything is in order.

Seems to me the developer has been incompetent investing time and money n something they stand no chance of getting a decent price for.

teneighty

GMS wrote: »

A limited company could go bust the day after completion meaning it is literally not worth the paper it is written on.

I commented on another post by the OP in a different board and the OP pointed out your comment. Are you saying it is now an industry standard lending criteria that certification cannot be made by a professional consultant trading as a limited company? It is becoming far more common for consultants like myself to trade as a limited company or limited liability partnership and your assertion that all limited companies are somehow unreliable is rather alarming, especially if lending institutions are adopting this policy.

I would just like to point out that being a limited company does not make me anymore likely to go bust than say an architect working as a sole trader. The professional conduct rules are equally strict no matter what the trading position. I am required to maintain expensive professional indemnity insurance for up to seven years after I cease trading and going bust would result in immediate expulsion from my institution and I could kiss goodbye to ever working in the profession again.

I would suggest some certificates issued by limited companies are worth their weight in gold and probably considerably more. It just depends on the professionals within the company. We are not all fly by night rogue traders!

kingstreet

teneighty - sometimes the answers you see on here are slightly skewed by the perspective of the individual. GMS is a mortgage adviser. So am I. This is the "Mortgage & Endowments" board.

I would take a similar view. If the OP's lender is not prepared to accept the offered certification, his potential market for buyers when he wants to sell is going to be limited.

Having to pay cash and be limited to cash buyers isn't a situation I'd like to be in. Lenders aren't taking this approach because advisers posting on the internet are suggesting it's not a good idea. They are likely to have worked that out for themselves.

If you have anything to suggest which may be of help to the OP I'm sure it would be warmly welcomed. In addition to that, representations you make to lenders may get the requirements changed and advisers can safely post on here "you can rely on that as it's acceptable to your lender."

GMS

teneighty wrote: »

I commented on another post by the OP in a different board and the OP pointed out your comment. Are you saying it is now an industry standard lending criteria that certification cannot be made by a professional consultant trading as a limited company? It is becoming far more common for consultants like myself to trade as a limited company or limited liability partnership and your assertion that all limited companies are somehow unreliable is rather alarming, especially if lending institutions are adopting this policy.

I would just like to point out that being a limited company does not make me anymore likely to go bust than say an architect working as a sole trader. The professional conduct rules are equally strict no matter what the trading position. I am required to maintain expensive professional indemnity insurance for up to seven years after I cease trading and going bust would result in immediate expulsion from my institution and I could kiss goodbye to ever working in the profession again.

I would suggest some certificates issued by limited companies are worth their weight in gold and probably considerably more. It just depends on the professionals within the company. We are not all fly by night rogue traders!

I was not casting doubts on the integrity of any limited company in any way. Issue here is what a mortgage company would require which is a NHBC guarantee, Architects Certificate or similar.

If a developer tries to sell a property without the required warranties then they are foolish at best.

I am sure you operate in a professional manner and treat your clients well. Apologies if you thought I was getting at all limited companies, definitely not the case.