Bank valuation on house with uncompliant swimming pool

Discussion in 'Loans & Mortgage Brokers' started by flosed, 2nd Nov, 2019.

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  1. flosed

    flosed Well-Known Member

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    I deal with brokers and bankers .

    But my broker told me he can't do loan for house with uncompliant swimming pool. Surprise.
    My banker said he is ok but house valuation will be impacted considering the remediation cost. But can't tell how much.

    Anyone has more insight on this ?


    Thanks!
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney

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    Broker is wrong
     
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  3. Sackie

    Sackie Well-known cafe bum of the East Premium Member

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    Time for a new broker.
     
  4. Morgs

    Morgs Well-Known Member Business Member

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    Was there a valuation issue?
     
  5. Marg4000

    Marg4000 Well-Known Member

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    What’s uncompliant with the pool?
    Not approved by council?
     
  6. flosed

    flosed Well-Known Member

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    Yes Need council approval. Somehow the properties I inspected all have non compliant pool certificate. (Need that in NSW btw)

    I am sure it will impact the valuation when fixing cost considered.
     
  7. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    Firstly why would you purchase a property with an compliant pool? Swimming pool compliance is in place because people have died in the past. Is this really a risk you want to take?

    If you really want to make this purchase, write into the contract a clause that the vendor will remedy the problem, or an amount will be held back at settlement to remedy the problem. Don't release your deposit until this is done.

    Finally, how would the bank actually know that the property isn't compliant? A desktop valuation would never pick it up. A valuer probably wouldn't spot it unless it was dangerously obvious (if it is that obvious, see my previous comments).
     
    Last edited: 3rd Nov, 2019
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  8. Trainee

    Trainee Well-Known Member

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    None of this is advice, just experience with Sydney property. The NSW contract has to include a certificate of compliance or non compliance. Compliance is recorded in in government records (council? fair trading?). A lot of older houses have non compliant pools (no barriers, etc). Usually the seller makes it compliant prior to sale, or the contract states that it is non compliant, and the buyer takes on the risk and has 90 days to rectify.

    Fairtrading has a specific section on this, and conveyancers treat it matter-of-factly, so it seems to be a common situation. So this is not the same type of situation as, say, unapproved structures. There seems to be a clear, certain process to rectify.

    The question is whether the bank takes this into account? Can NSW brokers answer this?
     
  9. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney

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    I've never seen any bank or valuer comments about pools
     
  10. Stoffo

    Stoffo Well-Known Member

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    True.
    As council regulations continue to change over time many pools fall into not being compliant, this doesn't mean they are dangerous (and lets face it, everyone has a different opinion of what is safe).
    Councils have such a back log of properties to inspect that have changed hands, this isn't likely to happen inside of 6 months (more 12-24 months if they don't forget).
    My neighbor sold over six mo ths ago, non compliant pool, negotiated and reduced sale price by $5k (being 50% of estimated rectification costs) 6 months+ later and nothing has been done to raise the fences or remove climable trees.......
    Don't understand why the bank wouldn't/couldn't just factor in rectification costs :confused: