The Building Control (Amended) Regulations 2014 (BC(A)R)
How they affect you…
..The home builder (Self build mortgages)
The BC(A)R introduced in March 2014 have had far reaching consequences for many stakeholders. Some of these consequences were deliberate but it seems that there have been other implications that were not fully realised when the regulations were being written into law. Here we try to focus on the impact it has had on one such stakeholder; clients who want to fund the building of their own home with a self build mortgage.
Traditionally, the self build mortgage category encompassed both direct labour construction and houses built by contractors under a building agreement. Prior to the amendments introduced on 1st September 2015 it seemed that the BC(A)R had all but eliminated the direct labour construction of individual dwellings. We say this because despite what the politicians were saying through the media, it was difficult to draw any other reasonable conclusion.
The Certificate of Compliance on Completion introduced by the BC(A)R in March 2014 requires the signature of the ‘Principal or Director of a Building Company only’ as well as the signature of the Assigned Certifier. This Assigned Certifier has to be a chartered engineer, a registered architect or a registered building surveyor. The representative bodies for all of these potential Assigned Certifiers have individually advised their members not to take on this role where a competent contractor (CIRI registered) has not been appointed to the role of Builder. Further to this, providers of professional indemnity insurance to Assigned Certifiers have also advised against involvement in direct labour construction projects.
On 1st September 2015, revisions to the Building Control (Amendment) Regulations (SI. 365 of 2015) were published by the Department of the Environment, Community and Local Government (DECLG) that have supposedly allowed for relaxation of the regulations to allow self-builders of individual units to ‘opt-out’ of the full certification process. This opt-out process means that instead of appointing a Design Certifier (to certify design is compliant with Building Regulations) and an Assigned Certifier (to certify that the Construction is compliant with Building Regulations), one off house builders can now sign a ‘DECLARATION OF INTENTION TO OPT OUT OF STATUTORY CERTIFICATION’ when submitting a commencement notice. This declaration will obviate the requirement to appoint a Design Certifier and an Assigned Certifier to complete the commencement notice process. It also eliminates the requirement for an Assigned Certifier and Director or Principle of a Building Company to sign the Completion Certificate necessary to allow house occupation.
Unfortunately, as recently reported in the Sunday Business Post (http://www.businesspost.ie/banks-ignore-state-codes-on-one-off-houses/), it now seems that lending institutions are insisting on full certification in order to allow draw down of mortgage funds during the self-build projects. In his Article Fearghal O Connor quotes a senior banking source as saying “Most, if not all, financial institutions are insisting on certificates of compliance. Banks are looking at the situation from the point of view of when the property may be sold again in the future. If, at that stage, someone who is looking to buy that house discovers that it does not have the certificate of compliance, they are likely to walk away and look at some other property.”
O Connor writes that the Department issued a statement saying that “the Minister’s regulatory powers relate to the control of building activity from a building quality and safety perspective. He has no role in relation to monitoring the activities of lending institutions, and the Department has no specific information in this regard”
The result it would seem, of the Department’s recent amendments is that the direct labour construction of individual dwellings is only available to those with the savings to fully fund the build. Has the Department introduced one law for the rich and one law for everyone else?