Question: We are buying a property built 18 months ago by the seller who still lives there. There is no NHBC agreement or anything like that but the seller has provided an architect’s certificate dated just after the property was completed.
We don’t need a mortgage but our solicitors say the certificate is not enough as there are points it doesn’t cover and we may struggle to sell to anyone who needs a mortgage. What can we do?
Answer: This is a matter for the seller to resolve and there is little you can do about it apart from ask them to sort out the situation.
Even though you are not getting a mortgage your solicitor is quite right to advise you about the future marketability of the property, as lenders will generally only lend on a newly built (or newly converted) property where it is covered by a warranty scheme (for example, NHBC warranty) or the Council Of Mortgage Lenders (CML) professional consultant certificate.
The CML certificate can only be signed by a consultant with the appropriate qualifications, which are listed in the CML Handbook — for example, a certificate can be given by a fellow or associate of the Royal Institution of Chartered Surveyors.
By signing the certificate the consultant confirms that he has monitored the construction of the property and that he will remain liable to the owner and any lenders for six years. If the certificate provided by your seller does not satisfy the stringent requirements of the CML it will be of little value to you as it will be unacceptable to lenders.
Some insurers will provide a new-build warranty retrospectively but the seller will need to be able to satisfy the insurer’s requirements and the premium may be hefty. Establish if the seller is prepared to do this.
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If you have a question for Fiona McNulty, email email@example.com. We regret that questions cannot be answered individually.
Fiona is a partner in the residential real estate team at Thring LLP (www.thrings.com).
These answers can only be a very brief commentary on the issues raised and should not be relied on as legal advice. No liability is accepted for such reliance. If you have similar issues, you should obtain advice from a solicitor.