Can we build on land we technically don't own?

AhAisling

For context, my partner and I are currently living in Dublin city but hope to return closer to our parents and build on my family's land in Kerry. My father owns a farm near and has offered us a plot to build on. Unfortunately, where the site is, it falls under 'Rural Area Under Significant Urban Influence' so neither of us would be eligible to get planning permission as we didn't grow up in the town.

My father did grow up in the town and would be more likely to get planning permission, but will have to retain ownership of the land for 7 years before selling/gifting it to us.

My question is, if my father contractually promises the land to us once the 7 years is up and/or offers the land as collateral to the banks, how likely would it be for us to obtain a mortgage and begin building in the meantime, ie. before we technically own the land?

dory

This is a question for your bank really. I'd a family member with a similar query and it was a definite no until they owned the land. The bank wanted to be able to sell if the family member didn't pay their mortgage, too messy if someone else owns the land. That was a few years ago. I'd recommend a few mortgage appointments and you'll get a sense of how things are nowadays.

muffler

Not a hope of getting a mortgage in those circumstances. Part of the process entails your solicitor furnishing the lender proof of ownership of the land / site.

28064212

Extremely unlikely any bank would get involved. Hypothetically, lets say it gets to the end of 7 years and the father refuses to hand over the land (a lot can change in 7 years). What can the bank do? Or before that, you stop paying your mortgage, what can the bank do? They're left with a property that is practically worthless to anyone else.

If you really want to investigate that route, get legal advice from a property lawyer before doing anything else. My guess is they'd tell you it's a complete non-runner almost immediately

If the government were really interested in increasing housing, they would have banned such rules years ago.

Mellor

https://www.boards.ie/discussion/comment/123099772#Comment_123099772

If the land is legally signed over as collateral in those circumstances the bank would have no obstacles in taking possession of the land/house. I’m not sure why you think it would be an “what can they do” scenario.

It makes no odds who the owner is if it’s been offer as collateral. Bigger issue would be the father getting planning in the first place.

phormium

Not a hope of getting a mortgage for a house built on land you don't own. The only option I can see, and again unlikely a bank would be willing these days, is to put your father's name on the mortgage as well and probably on the deeds. Not sure what planning implication if any that has.

If you could find a lender willing to do this that would be one thing but could also be messy when you go to untangle the ownership/mortgage after the 7 yrs is up. Definitely would need legal advice on that before proceeding.