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Old 18.03.2019, 14:49
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Mortgage Problem - HELP!

Taking this issue up with a notaire, but wondering if anyone on here can help me anecdotally?

I'm buying an appartment through a PPE in Vaud, and began a process at the start of the year to arrange a mortgage with BCV bank for circa. CHF 500K.

The process has been, let's say, untidy, and very stressful. My conseiller is quite badly organised, and his communications have not been good.

Anyway, the Tuesday before last I finally reached the stage where I co-signed the mortgage note in front of the notaire. Job done! I thought.

I was wrong. Bank is refusing to pay out until it receives a further document from the developer.

Initially, my bank guy wanted an 'acte de revers' to guarantee correct use of mortgage payments for the development, which is in the process of being built. Seems it is not possible to provide this, but he is still insisting on a letter of 'attestation' that says something similar.

After assuring me that he'd spoken to the relevant people connected with the development company, my conseiller told me he was 'waiting' this this letter of attestation.

Well, he's now been waiting for two weeks. Given that I owe money to the developer now (having signed a contract with them), I pushed my conseiller early last week, politely yet firmly on this letter - viz.

"I now owe this money (and will suffer late payment fees if I don't make the correct payments), I've signed the mortgage, you should release the money under our contract. So what's happening?"

Not only did my BCV representative reply and refuse to release the money, but he then went on the attack, insisting that he'd gone and above the call of duty on my behalf, and that it was MY responsibility to chase this mysterious letter so the funds could be released. I did so, but am still waiting for this letter.

My question is this. From a legal standpoint, can BCV now continue to withhold the monies? On my side, I've fulfilled all my obligations, signed the mortgage agreement, plus the mortgage note in the presence of the notaire (bank also signed). It seems to me that this extra assurance that the bank desires on its side - via this document - is something it should have secured before offering me the mortgage agreement to sign, i.e. two months ago and not at this stage.

Be grateful for any perspectives / insight / advice.


Thank you!
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Old 18.03.2019, 15:14
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Re: Mortgage Problem - HELP!

Sure they can, it's part of the requirements.

Amazed that they will give a mortgage on a building not completed, normally you would need a building loan at much higher interest rate.

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Taking this issue up with a notaire, but wondering if anyone on here can help me anecdotally?

I'm buying an appartment through a PPE in Vaud, and began a process at the start of the year to arrange a mortgage with BCV bank for circa. CHF 500K.

The process has been, let's say, untidy, and very stressful. My conseiller is quite badly organised, and his communications have not been good.

Anyway, the Tuesday before last I finally reached the stage where I co-signed the mortgage note in front of the notaire. Job done! I thought.

I was wrong. Bank is refusing to pay out until it receives a further document from the developer.

Initially, my bank guy wanted an 'acte de revers' to guarantee correct use of mortgage payments for the development, which is in the process of being built. Seems it is not possible to provide this, but he is still insisting on a letter of 'attestation' that says something similar.

After assuring me that he'd spoken to the relevant people connected with the development company, my conseiller told me he was 'waiting' this this letter of attestation.

Well, he's now been waiting for two weeks. Given that I owe money to the developer now (having signed a contract with them), I pushed my conseiller early last week, politely yet firmly on this letter - viz.

"I now owe this money (and will suffer late payment fees if I don't make the correct payments), I've signed the mortgage, you should release the money under our contract. So what's happening?"

Not only did my BCV representative reply and refuse to release the money, but he then went on the attack, insisting that he'd gone and above the call of duty on my behalf, and that it was MY responsibility to chase this mysterious letter so the funds could be released. I did so, but am still waiting for this letter.

My question is this. From a legal standpoint, can BCV now continue to withhold the monies? On my side, I've fulfilled all my obligations, signed the mortgage agreement, plus the mortgage note in the presence of the notaire (bank also signed). It seems to me that this extra assurance that the bank desires on its side - via this document - is something it should have secured before offering me the mortgage agreement to sign, i.e. two months ago and not at this stage.

Be grateful for any perspectives / insight / advice.


Thank you!
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Old 18.03.2019, 15:18
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Re: Mortgage Problem - HELP!

Thanks for the reply. I don't dispute the fact that any lender has requirements, but extensive due diligence was done prior to drawing up of the mortgage documents.

I don't think such loans are rare at all. The builder is a large company, respected, and PPEs are common in Switzerland. How would anyone buy anything off-plan if such loans weren't common?
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Old 18.03.2019, 15:21
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Re: Mortgage Problem - HELP!

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My question is this. From a legal standpoint, can BCV now continue to withhold the monies? On my side, I've fulfilled all my obligations, signed the mortgage agreement, plus the mortgage note in the presence of the notaire (bank also signed). It seems to me that this extra assurance that the bank desires on its side - via this document - is something it should have secured before offering me the mortgage agreement to sign, i.e. two months ago and not at this stage.
What do the terms and conditions say about this? Surely they have a rule in there allowing them to ask for more papers if they have reason to do so. Which given the circumstances they have.
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Old 18.03.2019, 15:22
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Re: Mortgage Problem - HELP!

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. How would anyone buy anything off-plan if such loans weren't common?
Did you read what fatmanfilms wrote: Building loan / Crédit à la construction. See https://www.hausinfo.ch/fr/home/fina...struction.html
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Old 18.03.2019, 15:23
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Re: Mortgage Problem - HELP!

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Thanks for the reply. I don't dispute the fact that any lender has requirements, but extensive due diligence was done prior to drawing up of the mortgage documents.

I don't think such loans are rare at all. The builder is a large company, respected, and PPEs are common in Switzerland. How would anyone buy anything off-plan if such loans weren't common?
These constructions normally follow a schedule which describes at what moments during the build there has to be paid certain amounts. Without such paper the bank is very unlikely to pay any money, since this also tells for what their money is being used.
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Old 18.03.2019, 15:30
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Re: Mortgage Problem - HELP!

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Thanks for the reply. I don't dispute the fact that any lender has requirements, but extensive due diligence was done prior to drawing up of the mortgage documents.

I don't think such loans are rare at all. The builder is a large company, respected, and PPEs are common in Switzerland. How would anyone buy anything off-plan if such loans weren't common?
Building loans are common for buildings being built.
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Old 18.03.2019, 16:13
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Re: Mortgage Problem - HELP!

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Building loans are common for buildings being built.

Indeed, very common, almost all of them get built this way
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Old 18.03.2019, 16:21
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Re: Mortgage Problem - HELP!

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These constructions normally follow a schedule which describes at what moments during the build there has to be paid certain amounts. Without such paper the bank is very unlikely to pay any money, since this also tells for what their money is being used.
hopefully the contract you signed stipulates payment would be made only on production of the relevant documents that satisfy the bank.
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Old 18.03.2019, 16:35
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Re: Mortgage Problem - HELP!

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hopefully the contract you signed stipulates payment would be made only on production of the relevant documents that satisfy the bank.
Yep, this is the moment to stop relying on others and to just make a big pot of coffee/tea, turn of the telly and read all papers from first to last letter.
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Old 18.03.2019, 16:43
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Re: Mortgage Problem - HELP!

It's a fair point. I've done a fair bit of due diligence, but could do with reading the docs from start to finish again. Have just bought a new coffee machine, so that's poss'.

Point taken on nomenclature - yes, it is a mortgage in the form of a building loan (rate was still low - 1.48%, I believe for 10 years fixed) and indeed BCV asked for a copy of this contract (signed by myself and the construction co) before finalizing the mortgage, so they are aware of the payment schedule, which is detailed in there.

Thanks for all the replies - I do appreciate it. Will do more homework and revert if need be. Thanks again!
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Old 18.03.2019, 17:31
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Re: Mortgage Problem - HELP!

Also be certain that you have correspondence that the builder/developer knows that you cannot pay him since it is the bank who demands an extra paper that he has to provide before releasing any money.

This might come in very handy if shit ever hits the fan. The law is the law but things are not always that strict, and if ever it comes to court it would be weird to me that it would be deemed reasonable to have you pay extra costs towards the builder/developer due to them delaying or not providing an extra paper.
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Old 18.03.2019, 22:05
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Re: Mortgage Problem - HELP!

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Also be certain that you have correspondence that the builder/developer knows that you cannot pay him since it is the bank who demands an extra paper that he has to provide before releasing any money.

This might come in very handy if shit ever hits the fan. The law is the law but things are not always that strict, and if ever it comes to court it would be weird to me that it would be deemed reasonable to have you pay extra costs towards the builder/developer due to them delaying or not providing an extra paper.
Thanks! I have retained all the correspondence. Even have an email from BCV saying 'please go ahead and sign the construction contract' (thereby opening myself up to liability thereunder) after I asked whether they had all the documents they need. "Yes, was the reply - and we are in touch with the developer to secure the attestation we need."
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Old 18.03.2019, 23:56
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Re: Mortgage Problem - HELP!

A construction loan does carry a higher rate of interest and then reverts to a normal mortgage when the build is complete and the deed can be registered in the cadaster.

It's also quite normal for any monies advanced to be paid to a notary, or onto a special account, who holds it till the build is complete. I would never release money for an off plan build until it's complete. Even respected builders in Switzerland can go bankrupt.
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Old 19.03.2019, 07:35
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Re: Mortgage Problem - HELP!

I have twice purchased properties in Switzerland. Each were completely straightforward on the financial side. The developers were happy to stop supply all the documentation the bank asked for.

Each required payments in four stages and the bank were happy to make a loan in the form of another mortgage to cover these stages where necessary. The bank would not release to final mortgage until the houses were complete...
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Old 13.05.2019, 11:29
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Re: Mortgage Problem - HELP!

Just to thank everyone for your kind replies. Sorted out the issue in the end, and payments to the developer are now on track. More importantly, house build is now flying along and we have had the fun of speccing out kitchen, bathrooms, etc.

Really appreciate this forum and your expertise!
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