Owning a home is a big deal! Very few people in their lifetime get a chance to own a home and fewer get the chance to buy their homes with cash. For most, the struggle to save down payments and spend up to the next thirty years paying a mortgage is a difficult (task, challenge, undertaking) to achieve homeownership. Home mortgages are the primary means of home ownership and there a few mortgage houses along with the national housing trust that enable Jamaicans the luxury of home ownership.Homeownership by this process is for the long haul and the mortgager often times has to make hundreds of payments prior to receiving their title of ownership from the mortgage company. During this time the mortgage company bares the risk associated with the loan for 30 years, and most times under great exposure. It is alarming that mortgage companies have for so long operated without architects to help to alleviate some of the risk being taken is (on a product of good standard) often to good construction standard in case mortgagers default on their payments and their asset have to be reclaimed and sold.
Determining real costs:
In the case of developers that hire architects and construction professionals the risk to the mortgage agency is almost eliminated as professional indemnities and warranties are offered based on the name and track record of the entities carrying out the work to build homes and buildings. Mortgage companies carry a greater risk for persons seeking to build a custom home. While the mortgage company often times gets an approved plan from the local parish council, the design of the home is often not done using certified architects, structural engineers or construction professionals. The drawings are almost always incomplete to produce a proper bill of quantities to derive a proper cost and therefore the costing presented to banks is filled with provisional sums that are not quantifiable to give a real cost.
Managing payments and project construction:
Architects are not only trained to design homes and building but to also manage a project and project team throughout the construction process. Registered architects are trained to inspect and ensure that projects are built to the standards of the design and that the client is getting what they have paid for without compromising quality. We (the architect) coordinates the team and resources and help manage the budget alongside the quantity surveyor to ensure and determine the right payments for works completed by the contractor and ensure they are delivering the project with proper safety standards and construction techniques. This is called administering or the project management phase of the project.
Mortgage companies have no means of verifying if the person constructing the home/building has met the specifications of the design or even ensure that the house is structurally sound. There are no concrete cube tests to ensure the structural strength of the reinforced concrete that has been erected or the quality of the installation of the equipment, fixtures and fittings that are placed in the house. There is no means of verifying the foundation systems are suitable for the type of soil as mainly typical details are shown for building approvals instead of site specific design. In most cases untrained persons submitting architectural designs, give the bare minimum of drawings, which are not even adequate to do a proper costing for a project. Mortgage companies are therefore lending money on the hope and blind faith that persons constructing these homes are ethical in their practices and have built the projects to high standards.
Ironically the success of banks and lending agencies are predicated on the ability to quantify risk and profit on each transaction, however, in the case of buildings and homes for individual clients without professionals, they are shooting in the dark. They have no means to verify if the costing being presented is the true cost for building project and they receive a wide range of cost variances on each individual design that logically cannot be proven. How can banks and mortgage agencies continue to lend money for construction without any legal professional liability to gauge against their risk?
Houses and buildings that have been built by certified construction professionals (architects, engineers, quantity surveyors) should have a different rating and increased value because they carry legal liability for its construction.Lending agencies need to be more stringent on the process of lending money for construction and ensure that professionals that are trained and certified to carry out the construction process guard their investment.To carry a risk on thirty year loan that is without “insurances of professionals” is the equivalent of creating bad debt.