Redevelopment of an apartment with a mortgage from Sberbank

Housing problem

Agree, not everyone can boast of their own home. Since there are no wealthy parents or the inheritance of a rich grandmother, there is little choice. Either rent a house or start saving money. A small but personal apartment, a plot of land with a cute house - tempting offers are flying from everywhere. And it doesn’t matter how old you are, at any age your wishes should come true. Couldn't save up funds? This is also not a problem. The housing issue can be solved in an elementary way; you just need to understand the intricacies of lending and understand how to make your dream come true.

Mortgage concept

One of the most affordable ways to buy a home is a mortgage. For many families, this is the only option for purchasing real estate and improving their living conditions. Mortgage loans are becoming more and more attractive due to low interest rates and ease of registration. In addition, there is no need to search for the subject of collateral - the apartment itself becomes collateral. A competent choice of a banking institution and a thorough analysis of your financial capabilities guarantee an excellent result.

Thoughts on remodeling an apartment

When you become the owner of a new apartment, it seems that joy has no limits. However, over time, any person may have a need to change their favorite home to a more comfortable, comfortable one. The apartment needs redevelopment. Redevelopment consists of such changes that should be made to the technical passport of the residential premises. How the question falls from the sky: “Is it possible to carry out major repairs and remodel the apartment if the loan has not yet been repaid?” We will soon find out about this.

Is it possible to remodel a mortgaged apartment?

Redevelopment of an apartment with a mortgage is allowed, but it is more difficult to do than in your own home.
The borrower does not own the property until the final mortgage payment has been made. The financial institution owns the property while the loan is being repaid. Therefore, the question of whether it is possible to do redevelopment in a mortgaged apartment must be resolved with the approval of the bank.

Important! You should not try to outwit the lender and make a reconstruction. The bank management may punish the borrower for remodeling the apartment: demand that everything be returned to its previous form or terminate the contract.

The risk is unjustified, therefore, if the housing was purchased with a mortgage from Sberbank or another organization, you should not rush into major repairs.

It is necessary to submit a written request for reorganization to the board of the bank.

Subtleties of mortgage

When issuing a loan, the bank formalizes the purchased apartment as collateral. The owner of the apartment is legally limited in his rights and for the duration of the loan agreement does not have the opportunity to dispose of the collateral. Housing must remain in the same condition in which it was at the time of assessment by the expert. Any transformation of the apartment should not reduce its value. Therefore, first of all, it is enough to open a mortgage agreement - the main document that defines the key points relating to the subject of collateral (housing).

The section “Rights and Obligations of the Borrower” should indicate what procedures are allowed to be performed with the pledged property.

Some banks prohibit any kind of repair and construction work in the apartment until the debt is repaid. Still, most credit institutions provide assistance to their clients. If you are an executive borrower, you have a favorable credit history and have not had any late payments, you will probably get permission from the bank.

Recommended article: How to make money on a mortgage without investment

How to make a redevelopment?

The step-by-step redevelopment plan includes the following actions:

1. A thorough study of the bank mortgage agreement;
2. Receiving an officially certified BTI conclusion. The documentation must confirm the compliance of the future redevelopment with all legal requirements, as well as standard norms for conducting construction work.
3. It is necessary to send an official application to the banking institution, which will include a copy of the conclusion received from the BTI.
4. Obtaining official permission from the bank to carry out repair work of a certain type.
5. Carrying out installation and construction work in residential premises.
6. Based on the results of all the actions taken, draw up an updated apartment layout plan, and also officially approve it

Next, you need to make a copy of all documents confirming the fact of legal redevelopment and submit it to the bank.

There is a certain procedure by which a special permit for redevelopment of an apartment should be issued. First of all, you need to obtain permission from the bank, which can independently set the deadlines for redevelopment and obtaining new documentation for the apartment.

The general procedure for obtaining legal redevelopment takes up to six months, so it is necessary to coordinate this action with the bank in advance.

To complete the procedure, you will need documentation for the apartment - a standard copy of the mortgage loan agreement, a general plan of the house, as well as a project.

A competently compiled package of documents allows you to carry out the procedure in accordance with all the rules and in the shortest possible time.

Unauthorized and illegal redevelopment

Occasionally, there are citizens who allow willful redevelopment without coordination with the responsible authorities, including without the permission of the bank. If in the future you try to legalize the alteration administratively or judicially, you will not be able to do without a trial with representatives of the bank.

However, if you decide to do repairs without notifying the bank, you risk earning a negative reputation. The collateral specialist has the authority to make a surprise visit to you and check the safety of the collateral. If during the inspection it is discovered that reconstruction has been carried out illegally, the bank will require a written undertaking from you to restore the condition of the apartment to its original condition, in accordance with the technical passport, or to pay a fine.

A tougher option is that the bank has the right to offer to repay the loan early due to the borrower’s violation of the terms of the agreement.

If the loan is not repaid at the appointed time, the financial institution may file a lawsuit to collect the debt and seize the mortgaged property. So you can lose your apartment completely, and your plans will remain in your dreams.

We are starting redevelopment

According to the law, only its owner can initiate redevelopment of a home. In our case, when the owner of an apartment loses the authority to own property during the term of the loan agreement, only the bank can provide permission. In addition, the insurance company must provide consent. After all, the contract was initially concluded for an apartment, the price of which may become different after renovation. Accordingly, the cost of insurance will change. Based on this, a real estate appraiser must conclude that the value of the apartment will not subsequently be lost.

Application for approval of redevelopment (redevelopment has not yet been carried out or ownership of the object has not been registered)

Application for redevelopment that has already been carried out

Recommended article: Subsequent mortgage - what it is and the terms of the conclusion

The bank’s decision depends on what the upcoming redevelopment will be:

1. The simplest option is to work from a sketch. As a rule, the bank does not have any questions here. Such changes include glazing balconies, combining or dividing bathrooms, and dealing with built-in furniture. On a copy of the floor plan it is enough to indicate the places of future changes.
2. Project reorganization is much more complicated; additional documents may be required. These are changes such as connecting a balcony to a room, moving a sanitary unit, or destroying load-bearing floors between rooms. Taking into account the competent preparation of the project in a specialized organization and its approval by the insurance company, it is quite possible to count on a positive decision from the bank.
3. If your plans include a complex overhaul of housing with damage to critical structures, with transformations prohibited by sanitary and construction restrictions, you do not have to wait for the bank’s consent.

Where to go

Whether it is possible to do redevelopment in a Sberbank mortgaged apartment and how to obtain consent to carry it out is regulated by the terms of the loan agreement. If this issue is not addressed in the agreement, you should contact the bank and clarify what documents need to be attached to the application for approval of changes to the project.

First of all, you need to choose an organization (this could be BTI or a design company) that will develop a change project and guarantee the safety of its implementation. Then you need to contact the insurance company and the appraiser. Their conclusion is most often required by the bank as a guarantee that the redevelopment will not reduce the value of the collateral property.

Having sent the documents necessary for approval to the bank and received permission to carry out the work, you can proceed to further stages of registering the redevelopment according to the law, starting with contacting the local housing inspection authorities.

All subsequent procedures for a mortgaged apartment are the same as for unencumbered property (obtaining the consent of other owners and neighbors (if necessary) -> applying for permission from the housing inspection -> ordering a new property passport from the BTI -> re-registration in Rosreestr and submitting an application for new certificate of title).

What kind of redevelopment cannot be legalized?

It is important to remember that legislative documents prohibit:

• re-equipment that may lead to disruption of the stability and strength of supporting structures;
• distribution of massive equipment in apartments, which will lead to an increase in load on supporting structures;
• construction of the attic, technical floor;
• work in emergency buildings;
• installation of terraces;
• removal of heating appliances to the balcony;
• heated floor connected to the central heating system;
• transfer of wet spots to living quarters (for example, the kitchen and the room were swapped);
• carrying out actions that worsen the operating conditions of the house and the living conditions of the residents.

These types of redevelopments will be impossible to legitimize either administratively or judicially. And the consequence can be troubles, ranging from a fine to loss of property rights to housing.

Important points of the procedure

In addition to the above nuances, if you want to arrange a redevelopment, you need to take into account a lot of other details established by current legislation.

Obtaining consents

Coordination of redevelopment should begin with the bank, and it is better to find out in advance the possibility of its implementation. If the bank does not object, you need to contact the BTI to obtain an opinion and a technical design.

A specialist from this organization must clarify the possibility of carrying out these works, and then make a conclusion based on the inspection report and measurements of various parameters.

Types of changes

Current legislation provides for only three main types of redevelopment registration:

Sample consent of various banks for redevelopment

Price issue

The most important question for many is the cost of redevelopment, but in reality it will depend on a number of factors, such as:

• complexity of the work being carried out;
• cost of materials used;
• the volume of necessary operations and a number of other factors.

In addition, the price will largely depend on whether the person is going to do the design project himself or will turn to professional specialists.

The cost itself may be approximately as follows:

Necessary documents for approval of redevelopment

Finally, the consent of the credit institution has been received, all that remains is to visit the institution where redevelopment approvals are carried out in your city. An example set of documents is:

• application - Application for approval of redevelopment (redevelopment has not yet been carried out or ownership of the object has not been registered), Application for redevelopment that has already been carried out;
• ownership documents;
• your dream layout project;
• technical certificate and floor plan;
• consent of regulatory organizations (fire department, gas industry);
• written approval of the bank;
• agreement with the insurance company;
• engineering report.

In addition to the listed documents, you may be required to provide additional materials clarifying plans for future work.

Having received a positive answer, you can begin the long-awaited redevelopment of the apartment. The deadlines and order of work must be strictly observed. It is possible that the bank, along with the permit, sets a specific time frame for carrying out repair work, which must be met. The final type of work performed must fully comply with the project.

How to arrange redevelopment of an apartment with a mortgage?

The general rules for the reconstruction of mortgaged housing are generally the same. We recommend following the step-by-step instructions below.

Step 1. Study the agreement with the bank

The first stage of registration of redevelopment should be the study of the contract. It is necessary to find conditions and sanctions for carrying out repair work of this kind.

It is also worth considering that in order to carry out redevelopment work, the following requirements must be met:

1. The agreement with the bank was concluded more than a year ago.
2. The borrower has a certificate of ownership or an extract from the Unified State Register of Real Estate.

If the contract does not prohibit the reconstruction of residential premises, it is necessary to obtain consent to carry out repair work.

Step 2. Coordination with neighbors and residents

Obtaining the consent of neighbors is required if the redevelopment affects their interests or in the case when the apartment is communal. For example, if the reconstruction will affect common areas (corridor, storage room, landing) or the facade of the building, then consent is required.

However, even in these cases, consent is not always required. But it is worth considering that residents can complain to regulatory authorities and then the violator will face administrative liability. To avoid this, we recommend obtaining your neighbors’ consent in writing.

It’s another matter if there are several owners. It is impossible to make redevelopment without the consent of the co-owners. Consent to change the configuration of housing from co-owners is also drawn up in writing and requires certification from a notary.

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Step 3. Design of a sketch or project

A sketch is drawn up if it is planned:

• dismantling or creating non-load-bearing partitions;
• getting rid of closets;
• adjusting the location of plumbing equipment.

These works do not require design documentation. But to expand the bathroom or toilet rooms, as well as to change the flooring, you will need to order a project.

Sketches and projects are drawn up in special companies that have a license to carry out design activities.

Step 4. Coordination with the bank and insurance company

The bank will not give permission for the reconstruction unless approval is received from the insurance company. The fact is that the cost of insurance depends on the characteristics and value of the property. When changes are made to the housing configuration, the cost of insurance may also be adjusted.

Upon agreement with the bank, additional conditions may be imposed. For example, a financial organization may set specific deadlines for carrying out reconstruction that must be met.

Step 5. Contact the Housing Inspectorate

After receiving permission from the bank, you should contact the Housing Inspectorate or another institution with similar powers. You must write an application and attach the following documents to it:

• certificate of ownership or extract from the Unified State Register of Real Estate;
• redevelopment project;
• permits from the fire inspection, Rostekhnadzor, Rospotrebnadzor and other authorities (upon request);
• consent of the bank and insurance company;
• consent of neighbors and co-owners;
• technical passport and floor plan of the building (issued by the BTI).

After obtaining permission, repair work can begin. After their completion, it is necessary to notify the Housing Inspectorate. A special commission will be sent to the address of the apartment, which, after inspection, will issue a certificate of commissioning of the object.

Step 6. Contact the BTI

After receiving the act, you should contact the BTI to make adjustments to the technical passport and floor plan of the real estate. The amended documents are submitted to the bank. If necessary, the insurance contract will need to be reissued.

It is worth noting that minor reconstruction work may not lead to global changes. In this case, it is enough to contact the BTI immediately after completing the sketch. If the BTI gives a positive response to the application for redevelopment, it is enough to notify the bank and the insurance organization in writing.

When carrying out unauthorized redevelopment, penalties will be applied to the violator. In addition, the bank or housing authorities may require that the apartment be brought into the form specified in the technical documentation.