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Is bank’s requirement of an assigned certifier reasonable?

October 2016

Questions

I’ve just received mortgage approval to build a new house on my father’s farm. I hope to get married next year; this will be my family home. My preferred mortgage provider is stipulating that I must appoint an assigned certifier (AC). I understood that the Government had done away with this requirement for one-off houses. I am very disappointed with this as I want to finish the house and also save money for my wedding.

Would I be better off to choose an alternative provider, as I can save money by registering myself as the builder, and then opt out of the AC appointment? I want to build the house by direct labour.

Answers

The statutory requirement to appoint an AC under the Building Control Amendment Regulations (BCAR) was relaxed in September 2015 in SI.365. This applies to one off-houses and to extensions up to 40sq m. However, some lending institutions are insisting that an AC be appointed to oversee the work.

It is frustrating, as money saved on fees could be spent on finishing the house or contributing towards the cost of your wedding. Still, you should try to rationalise why the bank is insistent on the appointment of an AC.

The construction of a house without any form of oversight can lead to a situation where the finished structure may not comply with building regulations. This will have an effect on title and, in turn, on market value. Clearly this is a situation that lending institutions will try to avoid.

It appears reasonable for you to rely on those with traditional building skills and knowledge to construct your house. However, based on my experience, there will undoubtedly be issues of noncompliance in a “non-BCAR” house.

Typical noncompliance includes incomplete and torn radon barriers, noncompliant escape windows, noncompliant glazing, improperly spaced balustrading, poorly fitted or incorrectly sized insulation and cold bridges, poor ventilation, incorrect controls on heating systems, incorrectly installed waste water treatment systems, and overall poor workmanship.

Add to this the fact that structural members may not be designed by an engineer and you will see why banks feel the “opt out” route introduces risk.

The appointment of an AC who is an expert in building regulations provides the comfort of oversight. Errors can be identified early and corrective action taken.

You may not, at this stage, be overly concerned with market value, but circumstances change and it is not unusual for a “one-off” house to eventually come to the market. The fact that a house has had an AC appointed will reduce risk and add to its value. The potential reduction in market value in a non-BCAR house may exceed the initial cost of making the appointment.

Building regs deal primarily with life safety, and it is important that they be followed. I believe, therefore, that the benefits in quality and risk removal associated with the appointment of an AC should not be signed away lightly.

Noel Larkin is a chartered building surveyor and member of the Society of Chartered Surveyors Ireland. scsi.ie