Topic 14 Flashcards
On inspection of the property that Maggie is proposing to buy, the surveyor found evidence of a few small but long-standing cracks in some of the interior walls. They do not appear to have worsened over the past few years.
What is the surveyor most likely to recommend in view of the problem?
a. It is unlikely to affect the lending recommendation.
b. They will likely recommend a retention.
c. They will likely recommend that the lender arranges a report from a structural engineer.
d. They will likely recommend that the lender should not agree to the mortgage.
a. It is unlikely to affect the lending recommendation.
Andrew bought his new-build property 18 months ago and has now discovered a defect.
Under his NHBC Buildmark guarantee, to whom should he initially submit his claim?
a. His buildings insurer.
b. His mortgage lender.
c. The builder.
d. The NHBC.
c. The builder.
Jake’s lender has insisted on a retention.
What implications does this have for Jake?
a. He will not receive the full mortgage amount initially.
b. Jake must hold back some of the purchase price from the vendor until the lender is satisfied that the property is sound.
c. The lender will retain some of Jake’s deposit until he has answered further questions.
d. There are no implications for Jake as it is an obligation to the lender from the vendor.
a. He will not receive the full mortgage amount initially.
Which of the following would not be contained in a RICS Home Survey Level 1 Report?
a. A valuation for insurance purposes.
b. Advice on certain issues for the buyer’s solicitor.
c. Issues for further investigation.
d. Serious issues or those needing attention.
a. A valuation for insurance purposes.
Which of the following statements in respect of a basic valuation is true?
The:
a. report will confirm if the value is in excess of the agreed purchase price.
b. valuation is carried out on behalf of the lender, but the applicant usually meets the cost.
c. report will usually only highlight any necessary repairs if the loan-to-value ratio is high.
d. valuation must be carried out by a valuer who is independent of the lender.
b. valuation is carried out on behalf of the lender, but the applicant usually meets the cost.
A RICS Home Survey Level 2 (survey and valuation) Report differs from an RICS Home Survey Level 1 Report because it contains:
a. advice on certain issues for the buyer’s solicitor.
b. advice on repairs and ongoing maintenance.
c. issues for further investigation.
d. serious issues or those needing attention.
b. advice on repairs and ongoing maintenance.
A mortgage advance has been agreed, but some of the funds are not paid until two months after completion.
Which of the following is most likely to have triggered this approach?
a. Previous planning consent for a conservatory had to be confirmed.
b. Some external woodwork needed repainting.
c. The lender could not gain confirmation of the borrower’s income until that point.
d. The roof required re-tiling.
d. The roof required re-tiling.
A survey on Peter’s house has identified heave.
This may have been caused by:
a. a high concentration of radon gas.
b. deteriorating wall ties.
c. faulty foundations.
d. the removal of nearby trees.
d. the removal of nearby trees.
Which of the following is true of the reinstatement value of a property?
It:
a. is the amount that the insurer will pay in the event of theft or damage.
b. is usually about the same as the property’s market value.
c. represents an estimate of the cost of rebuilding the property.
d. will be established by the insurer.
c. represents an estimate of the cost of rebuilding the property.
Colin recently commissioned a RICS Home Survey Level 1 Report on the property he wishes to buy. Which of the following is true?
The:
a. report is designed to be available for all types and ages of property.
b. report uses a 1-3 rating system to indicate the condition of the main parts of the property.
c. surveyor will give advice and recommendations regarding any necessary remedial action.
d. surveyor will look at areas in the property that are covered or hidden if asked to do so.
b. report uses a 1-3 rating system to indicate the condition of the main parts of the property.
Which of the following is true in respect of a RICS Home Survey Level 3 Report on a property?
a. A RICS Home Survey Level 3 Report must be carried out if the property is more than two years old.
b. Major defects are likely to be discovered and the borrower has some recourse against the surveyor in the event that they fail to identify and report them.
c. Lenders routinely accept a buyer-initiated RICS Home Survey Level 3 Report in place of a valuation.
d. The commissioning of such a survey is always the responsibility of the vendor prior to putting the property on the market.
b. Major defects are likely to be discovered and the borrower has some recourse against the surveyor in the event that they fail to identify and report them.
A survey report has recommended an undertaking for work to be completed on the property.
When, normally, must this work be carried out?
At any point during the mortgage term.
Between exchange of contracts and completion.
Within a maximum of two weeks prior to exchange of contracts.
Within a specified number of months following completion.
Within a specified number of months following completion.
Undertaking is a formal agreement that the buyer will undertake specific remedial work within a specific period of time after taking possession of the property.
Sam bought a newly constructed house with NHBC Buildmark protection dating from June 2023.
When is the property no longer protected through the scheme?
2025.
2026.
2030.
2033.
2033.
For the first ten years the scheme provides insurance for the full costs of damage over a specified amount, known as the minimum claim value (MCV), caused by major defects in the building’s structure.
