An accurate evaluation for financial security

Buildings classified in seismic risk classes and categories and implications for granting a loan

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Horia Sfrenț

According to specialized studies, Bucharest is the European capital that presents the highest seismic risk. Over 350 buildings are classified in class 1 of seismic risk. In reality, however, the list of vulnerable buildings is much larger.

On the website of the Capital City Hall you can find the List of technically surveyed buildings, and if you have decided to purchase an apartment in an old block of flats, built before 1990, our advice is to check if that building is on the list in order to avoid some unpleasant situations that may arise in the process of granting the loan.

With over 17 years of experience in the field of valuations, FairValue has a successful collaboration with all banking institutions and we can confirm that when it comes to bank guarantee, the rules for accepting a property under warranty are quite strict when it comes to seismic risk.

If the real estate that you want to purchase through credit is also in one of the seismic risk classes mentioned below, you must take into account several aspects:
- buildings classified in risk classes Rs I and II or in emergency categories U1 and U2 are not accepted under warranty by most banks. Some banking institutions accept these properties under warranty, provided that the building is insured by one of the insurance companies approved by the respective bank;
- properties included in the List of buildings not classified in emergency categories or in appropriate risk classes – regarding these properties, banking institutions are "lenient", these buildings being accepted under warranty, but provided that the building is insured by one of the insurance companies approved by the respective bank. Some banking institutions also require an MLPAT Technical Expertise to classify the building in one of the seismic risk classes.

There are situations in which the clients, from the desire to purchase the apartment in a very short time, being perhaps pressured by external factors (seller, the need for a dwelling, etc.), omit the search for the real estate on the List of technically surveyed buildings.

When the application reaches the evaluation stage and the appraiser finds that the building is included in one of the categories and classes of the List, two situations arise:

a) the request for evaluation is cancelled by the financier if the building cannot be taken into guarantee;

b) the customer changes his mind about the purchase of the respective building.

Each banking institution has its own internal procedure, and the rules of acceptance into the guarantee are different. Our advice is that when you identify the desired property on the List, discuss this issue with the credit officer or call one of our specialists to be able to guide you in solving this situation.

For you, omitting this aspect can mean wasted time and money.

Buy responsibly!

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