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Spanner in the works re flat purchase advice please.

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By *ex-a-frolics OP   Couple
over a year ago

Brizzle

We were supposed to complete on a flat purchase today, with Covid & lots of hold ups it’s taken nearly 8 months.

Monies were sent yesterday & everything seemed ok until we had a call from our solicitor to say the sellers in negative equity.

What happens now, & more importantly who’s at fault for dropping this bombshell at the 11th hour, they’ve had 8 months to find this out?

To say we’re peed off is a major understatement.

TIA.

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By (user no longer on site)
over a year ago

As the seller its their debt. Their issue, if they cancel in the final hour you'll incur no costs this'll be down the the seller to pay as legally theyre responsible. It will just be a massive inconvenience on you head.

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By *partharmonyCouple
over a year ago

Tonbridge

I'm no expert, but it seems to me that it's the seller's problem not yours. If they put the place on the market, agreed a price, exchanged contracts, and you have paid, then they move out and you move in. If they can'tpay off their mortgage that'sddown to them. What exactly is the issue for you?

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By *icecouple561Couple
Forum Mod
over a year ago

East Sussex

Call your solicitor back and ask them. Although contracts have been exchanged I'm not sure at what point completion takes place. For your peace of mind ask the expert

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By *ex-a-frolics OP   Couple
over a year ago

Brizzle


"I'm no expert, but it seems to me that it's the seller's problem not yours. If they put the place on the market, agreed a price, exchanged contracts, and you have paid, then they move out and you move in. If they can'tpay off their mortgage that'sddown to them. What exactly is the issue for you? "

Inconvenience, removal men coming today, somebody must have known this.

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By *icecouple561Couple
Forum Mod
over a year ago

East Sussex


"I'm no expert, but it seems to me that it's the seller's problem not yours. If they put the place on the market, agreed a price, exchanged contracts, and you have paid, then they move out and you move in. If they can'tpay off their mortgage that'sddown to them. What exactly is the issue for you?

Inconvenience, removal men coming today, somebody must have known this. "

What does your solicitor say?

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By *ce WingerMan
over a year ago

P.O. Box DE1 0NQ

Flat you say OP? Buy a Bungalow, then the job's a good 'un innit, and you've only got one lawn to mow

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By *andybeachWoman
over a year ago

In the middle

They must have know this when they put it up for sale, that really is a miscalculation on their part and surely that does not come back to you unless they are trying to wangle a few extra pounds out of you

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By *eoeclipseWoman
over a year ago

glasgow

I'm wondering if what he means is that the have a secured loan/mortgage against the property which by the sound of it means they don't own it as the person they owe money to may have a 'hold' on the property over money owed.

i.e may have taken a secured loan to improve property and either didn't use it for said purposes, or didn't increase value above what was owed, plus possible covid related debt?

other than this being a nuisance, you are not liable for it.

Phone and ask for clarity on the situation as all we are doing is guessing the various scenarios. you're entitled to an explanation you understand so you are aware of your position.

I have no idea why this wasn't spotted or raised before any money was sent though.

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By *uffolksubWoman
over a year ago

Brandon

If you have exchanged contracts and are just waiting for completion, then both parties are legally bound to the terms of the sale contract. Which means that the seller risks breaking the contract and can therefore be sued for the breach. I have absolutely no idea how this exchange could happen without both solicitors, and the mortgage lender picking up on it....unless the seller only went into negative equity between exchange and completion. This could be possible if they were unaware of any early settlement charges that apply to their mortgage - a full settlement figure is normally requested very close to completion, so the solicitor may have only just received this information. Bad advice from their solicitor though, as they normally request such mortgage information early on in a transaction, to avoid this type of issue. I assume the seller’s not buying another property, as this would surely have been discovered way before now in that situation.

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By (user no longer on site)
over a year ago


"I'm no expert, but it seems to me that it's the seller's problem not yours. If they put the place on the market, agreed a price, exchanged contracts, and you have paid, then they move out and you move in. If they can'tpay off their mortgage that'sddown to them. What exactly is the issue for you?

Inconvenience, removal men coming today, somebody must have known this. "

The solicitors checks should have raised this. No debt is ever carried with a property its always a personal debt. If contracts have been exchanged its a solicitor issue.from a unsecured loan point of view, again thats personal. If your mortgage/contractual agreement clock has started ticking you own the property its a clean sheet.

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By *om and JennieCouple
over a year ago

Chams or Socials

Their Solicitor should never have allowed the sale to proceed this far. Complete negligence & should possibly be reported to the SRA.

J x

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By *eoeclipseWoman
over a year ago

glasgow


"If you have exchanged contracts and are just waiting for completion, then both parties are legally bound to the terms of the sale contract. Which means that the seller risks breaking the contract and can therefore be sued for the breach. I have absolutely no idea how this exchange could happen without both solicitors, and the mortgage lender picking up on it....unless the seller only went into negative equity between exchange and completion. This could be possible if they were unaware of any early settlement charges that apply to their mortgage - a full settlement figure is normally requested very close to completion, so the solicitor may have only just received this information. Bad advice from their solicitor though, as they normally request such mortgage information early on in a transaction, to avoid this type of issue. I assume the seller’s not buying another property, as this would surely have been discovered way before now in that situation. "

where this is true, if they have taken one of these equity release type loans, it means the equity lender owns the property and there was therefor no contract to be made by the seller as they had effectively signed the property over under set conditions (usually death/care home move). they may have only got wind of the intent to sell and have objected.

again Op just surmising potential situations, your still not liable for their debt.

okay would need to be an older couple which is less likely in a flat but there is other financing options out there that have similar conditions.

logbook loans are the same, you no longer own the car until it's paid off.

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By *ickJMan
over a year ago

Hemel Hempstead

You need to talk to your solicitor - this is their job and what you are paying them for.

If the negative equity is that they owe more mortgage than they will realise from the sale, in many ways that is their problem - they'll still owe their bank money. If there is a charge on the property, your solicitor should have agreed with their solicitor that the charge would be paid off at completion.

As they have exchanged contracts, I'd hope that the contract includes that they will pay any costs you have incurred (solicitors, removals) if they pull out of the sale. (I've only ever looked at the liabilities as a buyer if pulling out)

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By *uffolksubWoman
over a year ago

Brandon

OP, I’m not gonna lie, this is a major pain in the ass for you. BUT, you are not legally or financially liable, so that’s something. 100% you need to speak to your solicitor and find out what the situation is. I expect that they’ll advise you to issue a Completion Notice to the seller, which will give them a set period of time to complete the sale (often 10 days). You may well be able to re-coup costs caused by the delay, depending on the terms of your contract. If the seller doesn’t manage to complete within this timeframe, then you can claim back your deposit with interest, and you may well be able to claim for damages as well, without taking leg/court action. It’s key that you take your solicitors advice from here.....good luck.

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By (user no longer on site)
over a year ago

This whole story seems very odd to me.

For a start the selling estate agent would have done checks on the seller and thier financial position when taking the sale on. Both the selling and the buying solicitors would have done even deeper checks. Negative equity would not have just appeared out of no where over the last 8 months. As this is a flat, i'm wondering if it's a flat blighted by the "cladding" issues since the Grenfell fire. If it is, that would fully explain negative equity because the flat would be next to worthless.

Whatever the reasons, this should have been picked up by both sets of solicitors and the selling agent at the start of the process.

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By *reyyaMan
over a year ago

North Yorkshire

Seller is I think in breach if contract and is legally liable to you for all your costs including the removal van. You want your deposit back. Make sure your solicitor is moving fast on this and he or she knows what to do. Keep notes if what has been said and instruct your solicitor in writing and keep a copy.

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By (user no longer on site)
over a year ago

Surely if their were anything put on the house to stop a sale going through it would have been registered at the Land Registry. This would have showed up on the office copies and your Solicitor would have noticed this.

Redemption figures (for the seller) should have been collated and calculated prior to the last minute.

Someone, somewhere hasn’t done their job properly.

I’m sure your Solicitor is frantically looking at how to best resolve this (or at least they should be!).

You must be feeling very stressed OP and I hope that matter is resolved ASAP for you x

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By (user no longer on site)
over a year ago


"Their Solicitor should never have allowed the sale to proceed this far. Complete negligence & should possibly be reported to the SRA.

J x"

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By *reyyaMan
over a year ago

North Yorkshire

I think you can pull out of this deal. All your money back. Your deposit returned. Removal van fee claimed off other side. Your solicitor fees. Probably damages for non completion. Anything else you have paid out to be reimbursed. Be wary of your solicitor doing it all by phone. Ask your solicitor to set out what your options are. It hound not be a mystery to him or her. Instruct your solicitor to confirm in writing to you what these options are.

.

I would want the money immediately returned to be. The deal I

is off. All money that you can claim legally off the other side do so. Do not use your solicitor again. Complaint to Solicitors Regulation Authority

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By *idland_easy_riderMan
over a year ago

midlands and north wales


"This whole story seems very odd to me.

For a start the selling estate agent would have done checks on the seller and thier financial position when taking the sale on. Both the selling and the buying solicitors would have done even deeper checks. Negative equity would not have just appeared out of no where over the last 8 months. As this is a flat, i'm wondering if it's a flat blighted by the "cladding" issues since the Grenfell fire. If it is, that would fully explain negative equity because the flat would be next to worthless.

Whatever the reasons, this should have been picked up by both sets of solicitors and the selling agent at the start of the process."

Its a nightmare, I sold a property to a couple. Very simple no chain either way. Couple were cash buyers, so what could go wrong.

Sale was with a large national estate agent, so assumed they had done due diligence etc.

Went to exchange and only then found found out my cash buyer wasn't a cash buyer, but was waiting to cash in a pension and it was linked strongly to stocks n shares. Market was dropping so they didn't want to cash in. Sale fell through and no come back on them

I lost all my fees etc

Our process is open to abuse from both sides

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By *ex-a-frolics OP   Couple
over a year ago

Brizzle

Thanks very much to everybody that contributed, it turns out he was only a couple of hundred quid shy, & this has been sourced now. Panic over.

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By (user no longer on site)
over a year ago


"Thanks very much to everybody that contributed, it turns out he was only a couple of hundred quid shy, & this has been sourced now. Panic over. "

Phew!!

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By *icecouple561Couple
Forum Mod
over a year ago

East Sussex


"Thanks very much to everybody that contributed, it turns out he was only a couple of hundred quid shy, & this has been sourced now. Panic over. "

What a relief. Happy moving day

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By *uffolksubWoman
over a year ago

Brandon


"Thanks very much to everybody that contributed, it turns out he was only a couple of hundred quid shy, & this has been sourced now. Panic over. "

Great news, congratulations

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By *ex-a-frolics OP   Couple
over a year ago

Brizzle


"Thanks very much to everybody that contributed, it turns out he was only a couple of hundred quid shy, & this has been sourced now. Panic over.

Great news, congratulations "

Thanks very much you seem very knowledgeable, unfortunately it’s on hold again as he’s asking for more money, the solicitors have never heard the like of it.

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By *ilkChocManMan
over a year ago

Sanderstead

For a couple of hundred quid - that's a headache of a day you really didn't need!!

But the solicitors should have have all this nailed as part of their financial reconciliation. Glad you got it sorted though

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By *ex-a-frolics OP   Couple
over a year ago

Brizzle


"For a couple of hundred quid - that's a headache of a day you really didn't need!!

But the solicitors should have have all this nailed as part of their financial reconciliation. Glad you got it sorted though "

Cheers we’re not sorted now sadly as he’s upped the price!

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By *om and JennieCouple
over a year ago

Chams or Socials


"For a couple of hundred quid - that's a headache of a day you really didn't need!!

But the solicitors should have have all this nailed as part of their financial reconciliation. Glad you got it sorted though

Cheers we’re not sorted now sadly as he’s upped the price!"

How can he do that when price is agreed & contracts exchanged?

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By *eoeclipseWoman
over a year ago

glasgow


"Thanks very much to everybody that contributed, it turns out he was only a couple of hundred quid shy, & this has been sourced now. Panic over.

Great news, congratulations

Thanks very much you seem very knowledgeable, unfortunately it’s on hold again as he’s asking for more money, the solicitors have never heard the like of it. "

so first this perosn was short on their obligations to be able to sell now the cheeky bugger wants more...no! if completion has been done, contacts signed etc he has already agreed to the price and any change opens up the whole contract again and can reset time frames.

he's agreed already in more than principle.

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By *rHotNottsMan
over a year ago

Dubai & Nottingham


"We were supposed to complete on a flat purchase today, with Covid & lots of hold ups it’s taken nearly 8 months.

Monies were sent yesterday & everything seemed ok until we had a call from our solicitor to say the sellers in negative equity.

What happens now, & more importantly who’s at fault for dropping this bombshell at the 11th hour, they’ve had 8 months to find this out?

To say we’re peed off is a major understatement.

TIA. "

I had a few of these in the past. When you signed and witnessed your draft, did you ask for a penalty clause in there ? I ask for 3-5% plus all costs , that way if they sign then pull out you can recover your survey, search , legals, ant product fee on mortgage

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By *rHotNottsMan
over a year ago

Dubai & Nottingham


"Thanks very much to everybody that contributed, it turns out he was only a couple of hundred quid shy, & this has been sourced now. Panic over.

Great news, congratulations

Thanks very much you seem very knowledgeable, unfortunately it’s on hold again as he’s asking for more money, the solicitors have never heard the like of it.

so first this perosn was short on their obligations to be able to sell now the cheeky bugger wants more...no! if completion has been done, contacts signed etc he has already agreed to the price and any change opens up the whole contract again and can reset time frames.

he's agreed already in more than principle.

"

Caveat emptor......

At the end of the day you use a decent trusted solicitor or go cheap and do the work yourself

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By *uliaChrisCouple
over a year ago

westerham

Jesus

Best wishes sounds a nightmare day

Hopefully it gets sorted and you can laugh about it tomorrow

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By *xfordshireCoupleMFCouple
over a year ago

Abingdon

Please keep us updated.

Lily x

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By *ex-a-frolics OP   Couple
over a year ago

Brizzle

Thanks again the whole thing has been called off now, the seller is no longer answering his phone, the pitfalls of exchanging & completing on the same day I suppose.

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