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Planning & Mortgage

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  • 03-07-2019 12:26pm
    #1
    harry999
    Registered Users Posts: 614 ✭✭✭


    Hi There is a new house for sale on an auction - the house is 10 years old & the seller has it currently mortgaged.

    I'm a little afraid that something not right with the planning of the house - if there was an issue with the planning - would it not have been possible for the seller to get a mortgage on the house ?

    If I were to buy i would have to take out a mortgage and if planning was not correct - would I have a problem (but the seller got a mortgage on it 10 years ago so therefore must it be compliant ? )

    If the planning was not correct - would it be possible to get retention for the house seeing that it is there 10 years+

    How would I know for sure that house is planning compliant and has all the necessary building certs ?
    Thanks
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    #2
    kippy
    Registered Users Posts: 18,583 ✭✭✭✭kippy


    harry999 wrote: »
    Hi There is a new house for sale on an auction - the house is 10 years old & the seller has it currently mortgaged.

    I'm a little afraid that something not right with the planning of the house - if there was an issue with the planning - would it not have been possible for the seller to get a mortgage on the house ?

    If I were to buy i would have to take out a mortgage and if planning was not correct - would I have a problem (but the seller got a mortgage on it 10 years ago so therefore must it be compliant ? )

    If the planning was not correct - would it be possible to get retention for the house seeing that it is there 10 years+

    How would I know for sure that house is planning compliant and has all the necessary building certs ?
    Thanks

    I would not assume that all is correct just because the current owner has an existing mortgage on a property.
    10 + years ago lots of things were let slip through the net and banks weren't so fussy around where they money was going. They are (rightly) more risk averse nowadays and something that might have been acceptable back them to them (or possible not disclosed to them) may not be acceptable to them now.

    The question around planning and retention would, I suspect, depend very much on what the issue actually is. There are more on this forum with better knowledge than me on this matter.


    It is possible to buy a property with a mortage that has some residual issues - it just depends what these issues are, how long you have and the banks way of dealing with these.

    You mention this is an auction sale - you'd need to be even more certain of what you are dealing with here prior to the auction due to the rules of auction sales.
    I would ask why is it going to auction in the first instance - a lot of properties (but not all) have various issues associated with them that sometimes make them more appealing to a cash buyer.


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    #3
    Gumbo
    Moderators, Society & Culture Moderators Posts: 39,313 Mod ✭✭✭✭Gumbo


    Get a surveyor to compare what was granted planning against what is actually constructed on site.


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    #4
    jlm29
    Registered Users Posts: 3,818 ✭✭✭jlm29


    If you were to buy and planning wasn’t correct, you likely would have a problem. The bank would be unlikely to give you the money without proper planning in situ.


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    #5
    harry999
    Registered Users Posts: 614 ✭✭✭harry999


    Yes but there is a mortgage on the house being sold - so therefore must it be planning compliant ?


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    #6
    kippy
    Registered Users Posts: 18,583 ✭✭✭✭kippy


    harry999 wrote: »
    Yes but there is a mortgage on the house being sold - so therefore must it be planning compliant ?

    Not necessarily:
    "I would not assume that all is correct just because the current owner has an existing mortgage on a property.
    10 + years ago lots of things were let slip through the net and banks weren't so fussy around where they money was going. They are (rightly) more risk averse nowadays and something that might have been acceptable back them to them (or possible not disclosed to them) may not be acceptable to them now."


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    #7
    fago
    Registered Users Posts: 318 ✭✭fago


    harry999 wrote: »
    Yes but there is a mortgage on the house being sold - so therefore must it be planning compliant ?

    Not necessarily. They could have drawn down the mortgage and then subsequently in last 10 years built an extra 500sqft onto the side without permission.
    Auction always has extra buyer beware, especially for houses in the price bracket where they are usually private sales.


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    #8
    jlm29
    Registered Users Posts: 3,818 ✭✭✭jlm29


    harry999 wrote: »
    Yes but there is a mortgage on the house being sold - so therefore must it be planning compliant ?

    I’d only assume that if it had been very recently mortgaged by whoever is selling it. When we had our house surveyed last year, the engineer told us that 10+ years ago, the bank would have no problem giving a mortgage on a house that had planning issues, but they’re much stricter now and generally won’t.


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    #9
    Dolbhad
    Registered Users Posts: 782 ✭✭✭Dolbhad


    You’ve to remember back in boom years solicitors could act for both purchasers and vendors. This has been outlawed due to conflict of interest but generally was because a solicitor won’t cause issues on their purchase file if they have to solve it on sale file and risk two fees. Also what a bank would accept 10 years ago is very very different to what they would accept now. Recession showed banks had a lot of bad title on their hands they accepted and couldn’t swift. My sister once tried to buy a house off a receiver with a bank. It was a terrible title with planning issues. The same bank was her mortgage bank and they wouldn’t accept the title being sold (even though it’s the same bank selling it).

    And just because there is an issue that bank is okay with now, doesn’t meant they will in the future and if you go to sell or re mortgage it will be an issue. Planning is hard to fix. Someone building something and not getting planning can impact your ability to secure planning on the future if you wanted to make changes.

    Listen to your solicitor on this. And generally avoid auction properties. Usually there is a reason it’s going by auction and it’s usually an legal issue. Some banks won’t lend for auction properties also so ensure all had been reviewed by engineer and solicitor and cleared by your bank before you bid cause once bid is accepted, you’ve no recourse and have to continue or loss your deposit if the bank won’t lend on it.

    It’s one of the biggest purchases you’ll make. Ensure it’s all in order. If your not appeared to invest the Money to have a solicitor review it before sale and engineer check it out (and risk not securing the property) auction is not the way for you.

    Also it appears now even between banks it changes what it accepted.


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