Before the final drawdown of funds from your mortgage, there are several important steps to complete. These include submitting proof of payment for development fees, obtaining a house valuation, and ensuring the necessary insurance coverage is in place. Additionally, a final certificate of compliance must be issued, signaling the end of the construction phase.
1. Proof of Payment for Council Development Fees
- In the Republic of Ireland (ROI), council development fees are often required for new builds and some extensions over 40 square meters, though this can vary by local authority.
- The amount due is outlined in your planning permission, and the mortgage company will require proof that these fees have been paid before releasing the final funds.
- Proof of receipt from the local council is necessary for the bank to process the last payment.
- It’s essential to check with your local authority early in the process to understand whether fees apply, as some councils may not charge for smaller extensions.
2. House Valuation
- Before the final drawdown, the mortgage lender will require a house valuation, which is typically carried out by a real estate agent or valuer appointed by the bank.
- This valuation ensures that the completed house is worth at least the amount expected by the bank, based on the loan.
- The valuation also plays a key role in setting up your house insurance, which needs to be based on the cost of rebuilding the property, not just its market value.
3. Transition from Self-Build Insurance to House Insurance
- Once the house is completed, your self-build insurance must be converted to house insurance. This coverage will protect against potential damage or risks, such as fire or theft, and is based on the cost of rebuilding the house in the event of a loss.
- Make sure to coordinate with your insurance provider and bank to ensure continuous coverage during the transition from the construction phase to occupancy.
4. Final Certificate from Certifier
- The final certificate of compliance, issued by your certifier (architect, engineer, or surveyor), is a crucial document that effectively closes the construction contract. It confirms that:
- The construction has been completed in compliance with the Building Regulations and Planning Permission.
- All patent defects (visible or obvious issues) have been remedied.
- Any adjustments to the contract sum, including additional costs, have been agreed upon and settled.
- All claims, including those related to any retention amounts, have been settled.
- Once this certificate is issued, it releases any remaining funds owed to the contractor, including the retention sum that may have been held back for a set period to cover any post-construction defects.
Key Takeaways:
- Ensure all council development fees are paid and that you can provide proof to the mortgage company.
- Have the house valued by a real estate agent appointed by your bank to confirm its worth aligns with the mortgage requirements.
- Transition from self-build insurance to house insurance once the house is complete, based on the cost of rebuilding.
- Obtain a final certificate of compliance from your certifier, which ensures that all construction-related issues are resolved, allowing for the release of final payments to the contractor.
By completing these steps, you ensure a smooth transition from the construction phase to occupancy, while satisfying the mortgage lender's final requirements.