Self-build: Issues to consider in building your own home

With the continued lack of housing stock, more and more people are considering building their own home. The advantages of having a home designed exactly to your own requirements are obvious; however, it is worth considering some of the potential pit falls before proceeding.

The Property

You may be in a position that you already own a potential site, or a family member may wish to gift you a piece of land to build upon, or you have found a site you are interested in purchasing. If you receive a gift of the land, it should be remembered that there can be significant capital acquisitions tax consequences for you and tax advice should be sought. It is crucial at the outset to assess if the site is suitable from both a practical and legal perspective.

On the legal side, you should confirm if the Property abuts a public road, and if it does not, ascertain how you will access the Property. If the Property is on a private laneway, you will need permission to use that laneway to access the Property and a right of way may need to be put in place. It would also be important to confirm where the nearest public services (e.g. sewage, water) are located and if it will be possible for you to connect to them or to make your own private arrangements.

The Build

If the site does not already enjoy a current grant of planning permission (these are usually valid for 5 years from the date of issue) it will be necessary to apply for planning permission. Plans and drawings will need to be prepared and submitted to your Local Authority and it will be a minimum of 12 weeks before a decision (either positive or negative) is issued. It is quite common for Local Authorities to issue a Request for Further Information, requiring further documents to be submitted and possibly seeking changes to the proposed design, and in particular the external appearance, and this will extend the time until a decision is made on the planning application.

It is recommended that a comprehensive building contract is agreed with any contractor engaged to build the Property. This will both set out details of the design of the Property, the materials to be used, the timescale and most importantly the cost and how payments are to be made. With the current spiraling cost of building materials, the contract should deal with who pays the difference if and when costs increase – the builder or the homeowner.

The Money

The most common method of financing a build is through a stage payment loan. At the outset a lender will take a mortgage over the site and as the build progresses your Architect will sign forms at various stages (i.e. floor level, roof level) certifying the work completed to date and requesting funds from your lender. On completion, the Architect will be required to certify that the building is built in compliance with planning and building regulations. These would be standard documents required by anyone who might purchase the property from you in the future.

As an Architect is required to complete the stage payment draw down forms, and certify the build, it is not possible to obtain a loan from a traditional lender without Architect involvement.

These are just some of the considerations to bear in mind if you are considering building your own home. If we can be of assistance with your plans, please feel free to contact us to discuss any specific queries you may have.

How we can help

If you have any queries or concerns, or would like to discuss the above in further detail, please feel free to contact Michelle McArdle in our Real Estate Department (mmcardle@bhsm.ie / +353 (0)1 440 8313).

This article is for general information purposes. Legal advice must be obtained for individual circumstances. Whilst every effort has been made to ensure the accuracy of this article, no liability is accepted by the author for any inaccuracies.