100% mortgage retention

[Jax2218]

Hello, I was hoping for some advice with regards to the complete retention on our mortgage offer.

The house ( a 1920's mid terrace) we had our offer accepted on received a category 3 for structural movement due to a crack appearing along the bottom of a small extension at the rear of the house. We did have a look at it, we took a builder friend along and they said it looked like the DPC needed doing but it deffinetly did not show signs of subsidence.
So after our offer was accepted and the banks surveyors looked at the home report they placed the retention and have asked for a full structural survey by structural engineer and any reports and guarantees from remedial work to be passed over to the bank.

The problem is how can we have work done on a house that isn't ours and is it wise to continue with a structural survey as I'm not sure a surveyor will give a deffinate answer to what has caused the crack and no one is further forward.

The solicitors have been a real let down and no help whatsoever. We let the sellers know via their solicitor and they have said they would only get estimates for the work that needed doing.

What would you do in these circumstances?
Sorry for the marathon read, I hope it makes sense. I currently have two little ones trying to jump on me.

Have you exchanged contracts yet?

I've never heard of 100% retention before but IF the crack does turn out to be subsidence, I guess you would have to negotiate with the ownerst o havew ork done after exchange and the bank wouldr eleasr funds when they are satisfied it has been done .

This is the banks way of saying that they categorically will not lend until this crack issue has been resolved.

If the vendor won't repair then you're unable to proceed. The bank has had a surveyors opinion who in turn passed it onto a structural engineer who provided the bank and you with his advice. the banks risk assessment is no lending until it's resolved.

It's effectively saying they won't lend but stating that without the crack they would lend.

Passing it onto another bank is unlikely to work either. The crack is clearly obvious and because a defined reason for the crack hasn't been found the uncertainly over the issue will put banks off.

You need to speak to the estate agent and explain your banks position and the agent will understand what this means.

Unless you get another bank panel approved structural engineer to provide another report which can provide certainty for the bank with regard to the crack. That's always an option to seek another opinion.

Sorry. What a nightmare for you!!

Lots of people get full structural surveys done prior to completion and I don't see one done by a structural engineer as being any different. You simply explain what has happened to the vendor, that you intend to instruct a structural engineer and can the vendor confirm that they (whether in person or through the estate agent) will give the structural engineer access at a mutually convenient time. You will also need to request copies of any documents relating to remedial work & receive those before you send the structural engineer around. You should make it clear that, without this, you will have to withdraw your offer.
In an ideal world, the vendor may accept that this is going to be an issue for any purchaser and get a structural engineer around themselves & get permission to show the report to anyone interested. You should still get your own report done as you won't be able to rely on the one done by the vendors as it won't be addressed to you and so won't be any good to you if it turns out to be incorrect.

Good advice above. The only query I have about it is, am I correct in thinking that so far no structural engineer has looked at it, just the normal surveyor? In which case you have a choice, you can go to the expense of instructing a structural engineer to make a report or walk away. That report has to be addressed to the bank as well as yourselves (basically so the bank can sue if the advice is wrong).

The problem you have is that you are right you would not want to carry out remedial work and pay for it, if you do not own the house. Although you could - just you lose your money if the sale does not go through. You presumably cannot purchase the house and then carry out the work without the mortgage as you would not have the funds to pay for the house. In theory if the mortgage is small you can borrow/ beg/ steal the money and pay the loan back when you have done the remedial work and the mortgage funds released.

You are also correct (although I would think unlikely) that a structural engineer might not give a nice clean report and instead say they are unsure of the problem and the bank won't ever be happy to lend ever as its not clear what the problem is. However you have two options at this point. You either walk away now or you pay for the report see what it says and then see if there is a way to proceed.

However any person buying the house with a mortgage would probably have the same problem. I would put some pressure on the sellers to work with you or else their sale will collapse and they will be looking for a cash buyer. No idea if they are common round you but probably not. There is no real reason why they should not pay/ go halves for the structural report/ repairs although they probably won't agree. However if the repairs are substantial and there is a way forward do feel free to renegotiate the agreed price.

Hopefully that makes sense.

Thank you all some very sound advice.

We would always do a structural survey, it would irresponsible not to especially on a house of this age. I just don't want to shell out that kind of money for it not actually help. we have the choice to keep going or walk away. Which I will do if needs be.
We asked the seller to follow the advice given in their home report (Scotland) and seek specialist advice and repair, sending us any reports or guarantee's before we can move forward.
The girl selling, has replied via solicitors saying she has had two specialists in to give her some advice and quotes for work which we will recieve. Both have apparently said it is just damage to the rendering (I haven't had the full story yet). So I guess we have to make a decision pay for a full structural survey or pull out.

Thank you again.