Property Non-Compliance: Banks may Lower Valuations or Reject Mortgage Applications


Property Non-Compliance: Banks may Lower Valuations or Reject Mortgage Applications

Unauthorized Building Works, Encumbrances, and Debt are Significant Problems - Learn how to Avoid and Address Property Non-Compliance Issues


Today, we will discuss the issue of property non-compliance. If you are planning to buy a home in the future or currently considering applying for a mortgage loan, understanding this issue is crucial.


Property non-compliance issues typically include unauthorized building works, encumbrances, and owner debt. If these issues are present in your property, banks may lower its valuation or even reject your mortgage application.


Firstly, let's discuss the issue of unauthorized building works. This refers to unapproved construction work done within the property, such as building a glasshouse on the balcony, adding a room, or modifying the interior structure. If your property has unauthorized building works, banks may require you to demolish them or pay a penalty. If you are unable to resolve this issue, banks may reject your mortgage application.


Secondly, let's talk about encumbrances. Encumbrances refer to a person adding another person's name to the title deed without all owners' consent. If your property has encumbrances, banks may reject your mortgage application. Therefore, when buying a property, make sure it has no encumbrances.


Lastly, let's discuss owner debt issues. If you are a property owner but owe property management fees or public utility charges, banks may reject your mortgage application. Therefore, before purchasing a property, ensure that you have the financial ability to pay these fees.


In summary, property non-compliance issues are severe problems that may not only affect your mortgage loan application but also lead to high penalty and demolition costs. To avoid these problems, we need to take note of the following:

Firstly, be cautious when buying a property, ensure that the title deed has no encumbrances, and carefully check if there are any unauthorized building works. If any are present, resolve them promptly to prevent banks from rejecting your mortgage application.

Secondly, as a property owner, pay property management fees and public utility charges on time to avoid debt problems. If you are unable to pay these fees, contact the property management company promptly to seek solutions.

Lastly, if you have identified non-compliance issues in your property, handle them promptly. Contact the property management company or relevant government department to seek professional help in resolving these issues and prevent them from escalating.


In conclusion, property non-compliance issues require our attention. We need to be cautious when purchasing properties, promptly address non-compliance issues, and ensure that our properties can pass the banks' mortgage loan approval process. I hope students can take note of these issues and lay a solid foundation for their home purchase and property management.

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