Mortgage for a New Build - Documents Required

[French Fancy]

I wonder if anyone can help me with a query I have – We have had an offer accepted on a piece of land in the Limousin Region where we are going to build our own property. Our builder is a friend of ours who lives in France. He will bring in various tradesman over the course of the build to do things like the electrics etc. We are in the process of getting all the documentation together for the mortgage application and the mortgage company are requesting the following information:-

 

Construction contract including the general and special conditions, specification sheet ('conditions générales, conditions particulières, notice descriptive')

 

Our builders are not a large company, they are in effect a one man band and according to a friend of ours it is a nightmare to put together a construction contract involving Lawyers, Notaires etc not to mention costly.

 

Is this really a requirement or can anyone suggest a way around this?

 

Many thanks,

 

[Pickles]

The mortgage company are trying to protect your money and theirs: without a contract for the build, they can't define stage payments and what is to be delivered for what sum of money. How do you intend to run the construction? How are you going to pay the builder? Is there a definition of what the end product is going to be? What happens when problems arise?

To be honest, what they are asking for does not seem unreasonable - they are risking their money and need to be certain that there is a legal contract in place.

[idun]

I would say that the building schedule was the least of things you'd need from your builder, for you as well as  to get your mortgage. We had to have one. Isn't there anything like it on the architects plans?

And talking of costs,  when they started building  ours  the mortgage company paid out after each stage was completed and we paid interest on these payments.  The actual mortgage didn't start until the house was built and we had the keys. The good thing is that interest rates are no longer at 16% but it will soon mount up never the less, so the quicker the builder is the better........ another reason to have a contract and a building plan. Is it still the same? I imagine it would be.

We also had to take out a separate insurance cannot quite remember what it is called  and it is to insure during the build, dommages ouvrages comes to mind, nothing to do with the builders, but our responsibility on our land. Sorry, I really cannot remember what it is called. I know that our home insurer didn't do it and it is a specialist thing. I do believe it is obligatoire too.

[French Fancy]

Thanks for your response. Was your building schedule put together by Lawyers etc? If we can put a building contract together without using these types of people it will make it easier. I understand the need to protect the bank and ourselves from a financial point of view.

[idun]

We had to sign a contract with the builder subject to us getting a mortgage. I would never enter into any such important arrangement without doing so. This isn't about friendship, this is business.

Your builder should know about all this and will have to do such things for others and should for you, I don't see how any legally registered artisan can avoid it.

I'd have to dig in our paperwork to see if the notaire mentioned all of this, they probably did. I rather think that their fees are based on the price of the build anyway, so would it make a difference if they included this?

Getting a house built is a very costly affair and the complications, well one builder wasn't going to include stairs into our sous sol, or gutters and drains.

 

So I also think you need to be sure as to what the builder is including in the price. Gutters, drains and where these drains go, septic tank if needed, tiled floors, if the plasterboard is left just there, with no finishing. A bath and sinkand toilet and kitchen sink, I think are obliged to be there.

[NormanH]

From an outsider's view it doesn't sound as if the builder friend is very 'professional'. Surely if he were all this would be in place?

[Sunday Driver]

As a construction contract is a basic legal requirement and has to be signed off before a build can commence, I'd tend to agree with Norman....

 

[French Fancy]

Thankyou for your opinion. He is very professional. This is all new to us and I was just looking for abit of advice re the contract that we need to put in place.

I am sure we will get it sorted and be very happy spending time in our new build!

 

[PaulT]

How much is the whole build going to cost?

How much would it cost for a legal document to be drawn up?

What percentage of the total cost be the drawing up of the legal document?

It will be a very small percentage if something does go wrong.and gives you protection as well as avoiding arguments with the builder.

Your builder is a friend at the moment but will be a business contact when building.

Paul

[suein56]

[quote user="French Fancy"]Our builders are not a large company, they are in effect a one man band and according to a friend of ours it is a nightmare to put together a construction contract involving Lawyers, Notaires etc not to mention costly. [/quote]

Yes understood, that is a friend's view ... but what does your builder say about this ?

Sue

[NormanH]

You should consult this:

http://uci-ffb.fr/-Le-Contrat-de-construction-de-maison-individuelle-CCMI-.html

It is perfectly standard, and in fact obligatory.

I still can't understand how your builder doesn't know about it, and I hope you will be happy in your new build, but it is unlikely to take place if you can't provide the Mortgage company with what they require.

[Chancer]

English builder?

[Hereford]

When my Dad had a house built (in 2003) we used a local "house building" company.  The contract was half an inch thick (at least) and gave very detailed descriptions of what would be done - down to pictures of doors, windows and the specification of just about everything. It included the actual building plans too.

The contract, we understood, was standard and there was no additional cost for it; i.e. the price quoted covered the contract too. There was indeed an insurance policy but the house builder arranged this for us - we just paid.

Our local insurance agent also had details and the building was covered for fire etc as it went up.

Another local builder also wanted the job of building the house but all he produced were scruffy bits of paper, one from each artisan, and no details of what work was included - we very quickly eliminated him as a possible builder.

Perhaps the builder concerned in the original question is just a general builder and does not normally build a whole house?

"Get a contract" is good advice even when a mortgage is not needed (as with my Dad) - it gives a completion date and penalties for late finishing.  The builders rushed about quite a lot when we got near the 10 month deadline!