Episode 119:
Hello and Welcome to the Part3 with me podcast.
The show that helps part 3 students jump-start into their careers as qualified architects and also provides refresher episodes for practising architects. I am your host Maria Skoutari and this week I will be talking about the Architects Certificate. Today’s episode meets PC1, PC2 & PC5 of the Part 3 Criteria.
Make sure to stay until the end for today's scenario!
You may have heard of such a certificate in passing either from a project in the office or from the Part 3 course.
So what is an Architect’s Certificate and what does it entail:
An architect’s certificate, also known as Professional Consultants Certificate, can be issued by a chartered architect, or by a qualified surveyor or by any consultant that belongs to a body that is listed in the UK Finance Mortgage Lenders Handbook involved on a newly built or converted property. This handbook provides instructions for conveyancers acting on behalf of lenders in residential conveyancing transactions. The Handbook is voluntary for lenders and not all choose to use it.
Architect’s certificates are an important document for a number of reasons, but particularly if the purchaser wants to take out a mortgage on a newly built property, a buyer wants to take out a mortgage to purchase the property once it’s done being building or where the purchaser want to rent out the property under a rent-to-buy agreement. Relating to the first instance of taking out a mortgage, this is because mortgage lenders will generally only lend money against a newly built property if it is protected by a warranty scheme or a Professional Consultants Certificate/Architect Certificate. It will not be possible to be granted a mortgage if such a Certificate or warranty hasn’t been obtained. Additionally, the building can only be occupied if there's a valid occupancy certificate issued for it. This is different from an architect's final completion certificate and must be issued separately.
The Professional Consultant’s Certificate /Architect’s Certificate is valid for 6 years from the date of certification and is issued following the satisfactory completion of the works following a final inspection by a qualified surveyor/architect. An Architect’s Certificate can also be given in connection with the completion of a property transfer or in connection with the release of a retention.
The Architect’s Certificate is generally used where the builder or developer is not providing an NHBC or other building warranty. Smaller builders and self-builders tend to favour a professional consultant’s certificate/ architect’s certificate because they are often as much as 50% cheaper than an NHBC warranty and are widely accepted by banks and building societies.
An architect’s certificate is only a warranty in the sense that the issuing professional confirms that the property it relates to is built in accordance with the approved plans, complies with building regulations and is to a good standard. As mentioned, this undertaking is primarily for the use of banks and building societies as security for a loan and to provide comfort for the owner of the property that the building has been built in accordance with the regulations.
Although it doesn’t exactly act as a warranty, it confirms to the consultant that, on visual inspection, the property appears to have been built to a satisfactory standard. A key item to highlight here is that such a Certificate is not a latent defects policy and only certifies that the building has been constructed according to all legal requirements and regulations.
Why is the Professional Consultant’s Certificate /Architect’s Certificate a reliable document to use for mortgage purposes:
So the reason why lenders tend to rely on the Professional Consultants Certificate /Architect’s Certificate is due to the fact that the lender is provided with an assurance of the standard of construction, which is backed by the issuing architect’s or professionals professional indemnity insurance that will pay out if a homeowner decides to sue. Also, the fact that the consultant who issues the certificate will be liable to the current and future owners of the property for a period of 6 years as previously mentioned.
Why is the Professional Consultant’s Certificate /Architect’s Certificate given the same status as a warranty:
As mentioned, this is because essentially the professional that issues the certificate is backed by professional indemnity insurance and it is generally preferred in lieu of a warranty due to its low cost. It should be noted that these certificates only give the homeowner the right to sue the consultant if they negligently issued the certificate. The Professional Consultants Certificate /Architect’s Certificate also has a shorter validity period compared to warranties.
New build warranties last for ten to twelve years and cover the cost of structural damage and repairs. Typically with warranties, you don’t need to prove blame in order to get compensation. Some providers of structural warranties tend to allow homeowners to upgrade their architect’s certificates to warranties. Although new-build warranties are meant to cover new properties, they can also be offered on ongoing projects or properties that were completed a few years ago. In the case of existing buildings, the company will provide retrospective structural warranties.
So which is best, a Professional Consultant’s Certificate /Architect’s Certificate or Warranty:
One key benefit is that an architect’s certificate is cheaper than a structural warranty.
But apart from the cost, the homeowner should think about the level of coverage they will get from selecting either option. When damage occurs in the home, they will have to successfully prove negligence on the part of the architect or consultant to be able to successfully claim again the architect/consultant. The process involves suing the consultant and winning, and that could take many years and a lot of money. Another scenario might also be that the architect could have stopped practising or may have gone out of business. These issues can make it very hard for the homeowner to get compensated for structural issues in the property if a Professional Consultant’s Certificate /Architect’s Certificate was used.
Whereas warranties, although they can be more expensive, they are ideal for people who desire complete peace of mind. This insurance is intended to cover the full cost of repairing defects in the property and can even cover the cost of rebuilding the structure if necessary. Unlike the architect’s certificate, these warranties pay out immediately, and the homeowner won’t need to prove negligence in court, simply to prove that the damage or defect exists.
A key item to highlight with the Professional Consultant’s Certificate /Architect’s Certificate is that it only covers structural design issues in the building. Whereas a warranty provides a much wider scope of coverage as it covers structural defects and construction defects.
Additionally, the architect or consultant providing the certificate will have to visit the building at appropriate periods to confirm the state of the building. Another item to note with the Architect’s Certificate is that it doesn’t state that there are no defects in the property, and it doesn’t require the architect or consultant to fix any issues that are uncovered in the inspection. The architect or consultant simply needs to keep records confirming compliance.
In the case of a claim from a homeowner against the architect or consultant, they will need to keep thorough records to prove that they made periodic inspections at the right time and to also prove that the inspections were detailed enough to satisfy another consultant in order to minimize their chances of losing a claim court case. Keeping such records will make it harder for homeowners to get any compensation when they uncover faults in the property.
Can the Professional Consultant’s Certificate /Architect’s Certificate be issued retrospectively:
A retrospective architect's certificate is still valid, provided it's issued according to all policies and regulations. It's not rare for people ordering construction projects to obtain the certificate after the construction is complete.
It can even be issued after the whole project has been completed. The key thing to remember is that the architect or consultant is given enough time to fully review all aspects of the project and verify that it has been executed according to current standards and regulations.
To sum up what I discussed today:
- Architects certificates are documents issued by architects or other consultants to indicate that the building was built to satisfactory standards.
- These certificates can provide assurance to homeowners and mortgage lenders that the building has been built in accordance with the approved plans and building regulations.
- The architect issuing the certificate is required to maintain professional indemnity insurance for the period when the certificate will be valid, which is 6 years
- It is important to remember that architect’s certificates don’t work as warranties and don’t assure homeowners that the building doesn’t have defects.
