The valuer reports active, progressive movement in the house Nina is buying. A structural engineer recommends 12 months’ crack monitoring before any repair scheme can be designed. What is the lender most likely to do?
A lender can only set a retention or price the risk when the defect and remedy are known. With movement still active and no repair scheme for a year, the property is not acceptable security yet, so the lender will decline or defer (Walbrook (formerly LIBF) MRT1 AC9.2 and AC9.3, lending decision and lender actions). A retention needs a known cost, the seller’s insurer has no duty to Nina after completion, and a new insurer would normally exclude existing movement.
Assuming a retention can deal with any defect, even one whose cost is unknown.
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