Qualification on Title / Mortgage Drawdown

[DesBodz]

We are in final stages of buying a house in an estate built 2 years ago. Our solicitor has noted that the original architects opinion on compliance lists 4 planning conditions in the schedule, which have not yet been complied with. These conditions all relate to the common areas of the estate. Submissions were made by the architect for compliance to the council. 2 we’re not yet responded to, and for 2 they have been asked to provide additional / revised details.

our solicitor wants to qualify the title. My question is, will does anyone have experience of buying with a qualification on title ? Will the bank still be willing to lend ? (Again, to note, these pending planning conditions relate to the common areas of the estate, not the house itself). I should say all houses in the estate have sold, the one we are buying was bought by an investor who is now flipping it, and they bought with mortgage (same lender as us), though that’s not to say the bank were prev made aware of these conditions pending.

anyone experience of similar ?

 

[Dave Vanian]

Qualifications on title are very much at the discretion of the lender. If the issues that remain to be resolved are minor, they may let it go. They will be basing their decision on the underlying question - "if we have to repossess this house and sell it on, could this qualification make it harder for us to sell, or require us to do a lot of work to sort before it sells?" If yes, they're more likely to refuse agreement to proceed.

My experience is that it can take a long time for a lender's legal department to reply to such queries - think weeks or months. So I'd suggest that your solicitor writes to the lender's legal department immediately if not sooner and sets out the details of the proposed qualification.

 

[RedOnion]

Nobody can really give you first hand experience wuthout knowing the exact issue and which lender you're dealing with. But it'll be slow moving.

Variations come up frequently enough where an estate hasn't been taken in charge of the council, or a pre crisis development where common areas are unfinished due to a developer going bankrupt.

 

[DesBodz]

Qualifications on title are very much at the discretion of the lender. If the issues that remain to be resolved are minor, they may let it go. They will be basing their decision on the underlying question - "if we have to repossess this house and sell it on, could this qualification make it harder for us to sell, or require us to do a lot of work to sort before it sells?" If yes, they're more likely to refuse agreement to proceed.

My experience is that it can take a long time for a lender's legal department to reply to such queries - think weeks or months. So I'd suggest that your solicitor writes to the lender's legal department immediately if not sooner and sets out the details of the proposed qualification.

Thanks Dave. Do you know is it possible to provide some kind of indemnity to cover the lender in such instances

 

[Dave Vanian]

Thanks Dave. Do you know is it possible to provide some kind of indemnity to cover the lender in such instances

In theory it sounds like a reasonable idea, although I don't know the actual circumstances. In practice, I doubt if any lender will go for it. It's far easier for a lender to say no to anything complicated because demand is such that they know they could have several uncomplicated loans processed in the time it takes to think about your indemnity idea.