Lender withdrawing loan approval over fire safety concerns

Curtley-Óg

Registered User
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Hello

Has anyone experience of a lender withdrawing loan approval, specifically on grounds of fire safety?

This is my current situation. I have local authority approval in principle for a home loan. I managed to go sale agreed on a 2 bed property last January. The LA sent their clerk of works to check the property, and I believe this was also followed by a Fire safety officer. In early March I got a letter saying my loan was not being approved formally for this property due the concerns over fire safety.

I have not yet had a structural engineer survey the property. My plan had been to progress this once I got an all clear from the LA Clerk of Works report.

I have requested further clarification of the Local Authority to the specifics of the fire safety concerns (currently I have no insight whatsoever what the basis of the concerns are). Also I asked whether they were considering if the concerns can be addressed by remedial work.

It is now over a month since I submitted my appeal / request for clarification to the local authority. I do yet have any further insight what the issue is. They do seem to be considering my appeal properly and I expect a response in the coming days.

In a very best case scenario (albeit unlikely) the LA will specify the concerns and make their loan offer conditional of my structural engineers survey and demonstration I can afford the remedial work.

Note there will definitely be additional renovations needed on this property to bring it from its current BER of G up to a B. The cost of these renovations is a further unknown - again, I need the structural eng. survey done to determine the scope and outlay of these renovations.

It is extremely hard to find houses I can afford and I am very happy with the location of this property. I almost certainly will need to walk away from this purchase, but before I do I want to make sure I've left no stone unturned should there be a way to make it work.

With this in mind I would appreciate hearing experiences from buyers or sellers of lenders withdrawing loan approval due to fire safety and what lessons were drawn.

Many thanks.
 

Leo

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13,897
Why did the LA inspect the property?

To answer your question though, banks will always withdraw a loan offer if they become aware of any issue that might negatively affect the valuation.
 

jpd

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2,995
The LA presumably inspected the property to assess it's value and situation before giving out a mortgage on it - wouldn't most lenders do this?
 

Curtley-Óg

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Why did the LA inspect the property?

To answer your question though, banks will always withdraw a loan offer if they become aware of any issue that might negatively affect the valuation.
Thanks @Leo

The Local Authority send a Clerk of Works to inspect every property as standard I believe. This does not remove the need for the purchaser to have their of structural engineer survey the property. The first survey will be more of a "look-see" specifically for the lender.

I'd really like to see the CoW report to be honest. As I am an engineer (not civil/structural but I'd know a real issue if I saw one) by profession and would be keen to understand the concerns. I know from large construction projects lenders engineers can sometimes err too much on side of caution, especially if they are inexperienced or inclined to "box-ticking", ie to cover themselves. My rationale for requesting sight of the CoW report from the lender is to assure me that the credit committee at the LA properly appraise the risk to them. Given workload on management they may not actually read all CoW reports. If they send it to me I would expect they'll be more likely to fully appraise the CoW report.

Make sense, or am I in danger of flogging a dead horse, and potentially annoying the Local Authority? I'm conscious I really need to keep in their good graces assuming this property falls through and I go back with another property .
 

Curtley-Óg

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The LA presumably inspected the property to assess it's value and situation before giving out a mortgage on it - wouldn't most lenders do this?
@jpd thanks and yes that was my understanding too, but I can only speak from experience about the local authority process.
 

dereko1969

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3,036
You could make an FOI/AIE application but this could take some weeks to receive. I'd ring the Clerk of Works and ask for a copy. Don't think a Data Access Report would work as your name unlikely to be on the original report but could be another option.
 

Leo

Moderator
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13,897
The LA presumably inspected the property
Ah yeah, I missed that the LA were the lender!

I'd try get talking to them and ask politely. You are not entitled to see the report they comissioned and I certainly wouldn't recommend a data access request that isn't relevent and may have you labled a potential thorn in their side.
 

Curtley-Óg

Registered User
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34
You could make an FOI/AIE application but this could take some weeks to receive. I'd ring the Clerk of Works and ask for a copy. Don't think a Data Access Report would work as your name unlikely to be on the original report but could be another option.
Thanks @dereko1969 - hadn't thought of that, all creative thinking welcome! I have emailed the Local Authority to request a call with the Clerk of Works or Fire Safety Officer subsequently brought in. I think it should happen to be honest, just the wheels are turning slowly. At the end of the day, these people are professionals and there will be an issue - my only question is whether I can afford to make it right.
 

lff12

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586
There must be a material breach - its unusual for older properties (as I assume this is) as I think properties before a certain date didn't need an FSC. I would put in an FOI request to find out the specifics. Banks are insistent on such issues being remediated as technically such buildings are only covered by insurance if there is some evidence of having essential fire safety checks covered (there have been instances in the past where a fire occurred in an estate and insurer refused the claim on the grounds of fire safety work being inadequate or not in compliance with planning or building standards).
 

Curtley-Óg

Registered User
Messages
34
There must be a material breach - its unusual for older properties (as I assume this is) as I think properties before a certain date didn't need an FSC. I would put in an FOI request to find out the specifics. Banks are insistent on such issues being remediated as technically such buildings are only covered by insurance if there is some evidence of having essential fire safety checks covered (there have been instances in the past where a fire occurred in an estate and insurer refused the claim on the grounds of fire safety work being inadequate or not in compliance with planning or building standards).
Thanks @lff12! I think you're probably correct that this may be a case of lender being unwilling to lend without remediation already in place. I.e., they weren't willing for me to promise via letter to remediate any issues. I got a bit more detail back - party walls between both neighbouring properties do not meet fire regulations. So I guess this constitutes a material breach.

It has all moved on regardless. I had to accept the lenders decision and move on. Thankfully I've managed to go sale agreed on another, much newer, property. Just starting to engage again with the lender - fingers crossed all their checks and balances will go better this time!
 

lff12

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586
Thanks @lff12! I think you're probably correct that this may be a case of lender being unwilling to lend without remediation already in place. I.e., they weren't willing for me to promise via letter to remediate any issues. I got have an a bit more detail back - party walls between both neighbouring properties do not meet fire regulations. So I guess this constitutes a material breach.

It has all moved on regardless. I had to accept the lenders decision and move on. Thankfully I've managed to go sale agreed on another, much newer, property. Just starting to engage again with the lender - fingers crossed all their checks and balances will go better this time!
Delighted to hear it - I only knew because I had a vaguely similar situation with a property that I gave up on after nearly 11 months, except it was fire safety cert being missing AND PP not being in order (apartment being described as "ground floor basement" rather than an apartment in a previous retention appliation). Likewise I moved on and have an offer on another, larger, newer property now. Hope it goes better for you.
 

lff12

Registered User
Messages
586
Hello

Has anyone experience of a lender withdrawing loan approval, specifically on grounds of fire safety?
Not directly, but in the case of the sale I withdrew from, my solicitor advised that a fire cert was missing from the information about the property, the vendors solicitor seemed to be unable to produced one - in the end there was actually worse issues (PP not for the correct use) but my solicitor did say that it couldn't be signed off without it (ultimately solicitors have to certify that all required documentation is in order, and this does include some evidence it meets fire safety regulations).

Also - see here https://www.irishtimes.com/news/ire...perties-with-potential-fire-defects-1.4521241
 
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