Planning permission and mgmt co issues: Mortgage not granted -- options?

Richards1983

Hi all,

Overview:
- I'm sale agreed on an apartment but there are issues around planning permission compliance and management company. 
- I'm mortgage approved. 
- It's a receiver sale, and my bank is fine with that.

I still want to buy but the bank will not sign off on a mortgage due to the two issues. I've around 80% of the price of the apartment in cash.  I was planning to take a 65% mortgage.

Can I go to the vendor and offer that cash as an alternative? If so, how do I approach that? 
If not, any other ideas for how I can secure it without having all of the price in cash?

Many thanks for your insight as always,
Con

ELM327

80% cash 20% personal loan.
If your solicitor has advised there is no issue with title etc and that the planning issue is a non issue

Richards1983

Thanks Elm.

What do you think about offering the 80% and seeing if the receiver is willing to go with it rather than going back to the open market and taking a few more months?

ELM327

I'd be very wary of proceeding if there's planning issues.
What happens if in 6 months you are told the block is being knocked down?

Get advice from a solicitor.

Richards1983

As I understand, the building is 35 years old so it has retention on the planning issue, which is internal and minor.

Graham

Richards1983 wrote: »

As I understand, the building is 35 years old so it has retention on the planning issue, which is internal and minor.

Surely if planning retention has been granted, there are no planning issues?

ELM327

+1 if it's been granted there are no "issues" so the bank should have no problem
Something smells fishy

Graham

I'm guessing there has been no application for retention but sufficient time has passed that the local authority cannot take enforcement action.

OP, they are not the same thing.

If the planning issues are not addressed you would find it incredibly difficult to sell this property in the future as the next potential purchaser will come up against the exact same mortgage issues.

Richards1983

Retention hasn't been granted but more than 7 years have passed so the statue of limitations has elapsed. 

I gather that getting retention takes circa 3 months so my thinking is that one could buy with cash, then get the planning issue settled, and then there'd be no obstacles to selling in future.

Gumbo

Richards1983 wrote: »

Retention hasn't been granted but more than 7 years have passed so the statue of limitations has elapsed. 

I gather that getting retention takes circa 3 months so my thinking is that one could buy with cash, then get the planning issue settled, and then there'd be no obstacles to selling in future.

What are the planning issues?
You may also need management company approval to apply and possible dire safety provisions to be met to bring it into compliance.

Richards1983

The planning says it's a two bedroom when it's actually a three bed. No idea why. And it never was a two bed - the bedrooms are completely separate and there have never been changes made.

I'll need to do some fire safety stuff for sure. Not sure what goes into that but informally I've heard it's not that hard; but I'll speak to an engineer about it.

Graham

You'd want to be fairly confident you would get planning, maybe have a chat with the local planners if you can.

That just leaves the 'management company' issues.

You'd want to be buying at a very significant discount from market price to make the risk worthwhile. You'd also want to consider what your position would be if the planning/management-issues didn't go your way.

Richards1983

Yeah - spot on. I'll map out my options today and see how best to proceed.

Thanks Graham.

Gumbo

Richards1983 wrote: »

The planning says it's a two bedroom when it's actually a three bed. No idea why. And it never was a two bed - the bedrooms are completely separate and there have never been changes made.

I'll need to do some fire safety stuff for sure. Not sure what goes into that but informally I've heard it's not that hard; but I'll speak to an engineer about it.

OK, this is not as serious as first thought.
From a Planning point of view it can be classed as internal alterations so planning may not have an issue.

From afire Safety point of view, do all 3 bedrooms have an external window? do the they all exit into the protected hallway with interlinked smoke/fire detection?

Richards1983

Hi kceire - thanks for your feedback.

All bedrooms have a window. They all exit into the hallway of the apartment. I'm not 100% sure if there's smoke/fire detection, I assume I could have that installed and satisfy the requirement?

Gumbo

Richards1983 wrote: »

Hi kceire - thanks for your feedback.

All bedrooms have a window. They all exit into the hallway of the apartment. I'm not 100% sure if there's smoke/fire detection, I assume I could have that installed and satisfy the requirement?

They would have to be wired into the existing system.
When was the apartment block built?

Richards1983

Mid-90s. So it's a relatively new building. 

What do you reckon - it sounds OK?