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Do I Need a Latent Defects Warranty or a Professional Consultants Certificate (PCC) when converting a property?
This is a question we’re frequently asked by clients, and the answer isn’t always straightforward. If you’re converting a property with plans to refinance or sell, you’ve likely come across the terms Latent Defects Warranty and Professional Consultants Certificate (PCC). As a mortgage adviser specialising in the complex Buy-to-Let market, one of the most common questions I hear is: “Do I really need one of these?”
The short answer? It depends — and here’s why it’s not always a simple yes or no.
The Ambiguity in the Lending Market
There is a surprising amount of ambiguity across lenders regarding the requirement of a Latent Defects Warranty or a PCC. Requirements vary not only between lenders but also depending on how the case is assessed: some rely on the valuer, some on underwriters, and others leave it to the legal team. One lender we work with for example, takes the stance of:
“If the valuer ticks the ‘new build’ box within the valuation report, we would require a warranty or PCC”.
Because of this inconsistency, you could find yourself midway through a refinance or sale, only for the solicitor to raise it as a condition last minute, potentially stalling or even derailing the deal, even if the valuer didn’t request this within the valuation report.
The Gold Standard: Get the Warranty Upfront
If you want maximum certainty, broad access to lenders, and minimal risk of delays or surprises during the valuation or legal process, the gold standard is to have a Latent Defects Warranty in place from the outset.
This is especially important if your exit strategy involves selling the property. Most prospective buyers, and their lenders, will expect a recognised warranty to be in place. Without it, you risk narrowing your pool of buyers and creating avoidable complications in the transaction.
But It’s Not Always Required… Until It Is
Some lenders may accept a Professional Consultants Certificate (PCC) — a lower-cost alternative signed off by a qualified professional.
Another option may be to proceed with a lender who accepts title insurance — an indemnity policy that addresses many of the legal enquiries typically raised by solicitors. While this can satisfy the solicitor’s requirements, it does not guarantee that a valuer won’t still request the missing documentation.
If you do not have a warranty or Professional Consultants Certificate (PCC) in place and one is requested, you must be prepared to obtain a retrospective warranty. However, it’s important to understand that this can significantly limit your lending options, as many lenders do not accept retrospective warranties. In the worst-case scenario, you may be unable to secure financing for the property.
Here’s where things get unpredictable.
Let me share some real examples:
Real Case Study: The Delayed Surprise
A few years ago, we assisted a client in refinancing a converted building onto a Buy-to-Let mortgage. At the time, there was no Latent Defects Warranty or Professional Consultants Certificate (PCC) in place. Despite this, the lender proceeded without issue — the valuation, underwriting, and legal process all went smoothly.
Fast forward five years. Same property, different lender, same solicitor firm but different individual acting solicitor. Again, the valuer didn’t raise any concerns about the missing warranty, and the underwriter approved the case. However, at the legal stage, the individual solicitor flagged the issue, citing the UK Finance Mortgage Lenders’ Handbook, which states:
“You must ensure that new or newly converted properties have the benefit of a new home warranty scheme acceptable to us, or a Professional Consultants Certificate where appropriate.”
Despite our best efforts, the solicitor refused to proceed without a warranty. As a result, the client was forced to apply for a retrospective warranty — adding both unexpected costs and delays.
This real-life example highlights just how unclear and inconsistent this issue can be across different stages of the lending process.
Real Case Study: The conversions were carried out over 6 years ago
We remortgaged six properties that had been converted from houses into multi-unit freehold blocks of flats, with each property comprising between three and six units. The conversions had been completed approximately six years prior to the mortgage applications. The borrower, a property investor holding the assets for long-term investment purposes, had no intention of selling the individual units and therefore opted not to incur the costs of obtaining a structural warranty. Instead, they obtained building control completion certificates for each conversion.
In these cases, which involved total borrowing of approximately £4 million, the valuer only requested the building control completion certificates, and the remortgages proceeded successfully.
It’s unclear whether the elapsed time since the conversions influenced the decision not to request a warranty or professional consultant’s certificate (PCC), and we were reluctant to raise the issue since neither the valuer nor the lender required it.
Key Takeaway
Just because one lender didn’t require a warranty doesn’t mean the next one won’t. Even if both the lender and valuer are satisfied, it’s often the solicitor who has the final say — and their interpretation of the rules can bring a transaction to a halt.
Solicitors are required to follow the UK Finance Mortgage Lenders’ Handbook — a set of guidelines issued by lenders to conveyancers and solicitors. However, as the example above illustrates, how these rules are interpreted and enforced can vary.
So, What Are These Documents?
Latent Defects Warranty
Also known as a structural warranty, a latent defects warranty is a 10–12-year insurance-backed policy that covers the property against any structural or major defects that were not apparent at the time of construction and could take years to appear.
Typical issues could be:
- Foundations / Structural Frame
- Load-bearing Walls
- Drainage Systems
This provides reassurance to lenders, buyers, and insurers.
Professional Consultants Certificate (PCC)
This is a lower-cost alternative, usually signed by the project’s architect or surveyor, certifying the build was monitored and meets expected standards. Unlike a latent defects warranty, a PCC is not a form of insurance, it is a statement of professional opinion. The liability rests with the issuing consultant and any claims would require proof of professional negligence. Some lenders accept it — but many prefer the added protection of a full warranty.
In Summary
- If you’re converting – get a Latent Defects Warranty upfront if possible.
- It keeps your options open and avoids nasty surprises.
- Don’t assume past lender acceptance means future approval.
- For advice on your specific situation, feel free to get in touch.
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