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    • karljt2013
    • By karljt2013 20th Apr 17, 12:22 PM
    • 56Posts
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    karljt2013
    What does this legal term mean?
    • #1
    • 20th Apr 17, 12:22 PM
    What does this legal term mean? 20th Apr 17 at 12:22 PM
    A good friend sold me a house 10 years ago with a relatively basic loan agreement to be paid back over 25 years. Unfortunately he died a few years ago and obviously his son is not happy about the agreement we made. It seems to be a very unorhodox agreement because we were good friends. He has just sent me (though his solicitors) a much more draconian agreement which he wants me to sign. I am listed on the title deed as the owner and I think he wants that removed. Do i legally have to sign this form? One paragraph in particular is worrying. What does it mean? I have had to take a photograph of the paragraph. Can somebody please look at it and tell me what it means. Compared to his father this son is an A*****le and I don't want to enter into any agreement with him.

    Image of the paragraph below



    If anyone can help thanks
    Last edited by karljt2013; 23-04-2017 at 1:36 PM.
Page 1
    • Victor the Gink
    • By Victor the Gink 20th Apr 17, 12:29 PM
    • 153 Posts
    • 287 Thanks
    Victor the Gink
    • #2
    • 20th Apr 17, 12:29 PM
    • #2
    • 20th Apr 17, 12:29 PM
    This forum is (obviously) open to the public - I would remove the reference to SJG immediately!


    You need urgent legal advice - do not sign any thing until you have taken some.
    • anselld
    • By anselld 20th Apr 17, 12:32 PM
    • 5,213 Posts
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    anselld
    • #3
    • 20th Apr 17, 12:32 PM
    • #3
    • 20th Apr 17, 12:32 PM
    What does the original agreement state will happen on death of the lender?
    If the original agreement continues then you are not obliged to sign any new agreement.
    • Miss Samantha
    • By Miss Samantha 20th Apr 17, 12:36 PM
    • 1,177 Posts
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    Miss Samantha
    • #4
    • 20th Apr 17, 12:36 PM
    • #4
    • 20th Apr 17, 12:36 PM
    You are never obliged to sign a new agreement, only to abide by the terms of the existing agreement.

    You are the property owner and he cannot change that, nor does he propose to change that.

    He wants a charge added to prevent you from selling the house without paying the debt. Basically the loan would be secured against the property, which would turn it into a mortgage.

    Since you have no obligation to agree and that is not in your interest you can just politely decline.
    Last edited by Miss Samantha; 20-04-2017 at 12:39 PM.
    • steampowered
    • By steampowered 20th Apr 17, 12:56 PM
    • 1,396 Posts
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    steampowered
    • #5
    • 20th Apr 17, 12:56 PM
    • #5
    • 20th Apr 17, 12:56 PM
    The extract you posted suggests that the son wants to have a 'charge' registered against the property.

    This would secure the debt - just like a mortgage. It would mean the son could seek a court order that the house is sold, if you fail to pay the debt. It would also prevent you from selling the house unless the debt is paid off at the same time.

    I can see why the son wants to have a charge. Certainly many people would insist on having a charge in place in your friend's position. But as the agreement is already in place I don't see why you should agree to put a charge on the property.
    • ThePants999
    • By ThePants999 20th Apr 17, 12:57 PM
    • 710 Posts
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    ThePants999
    • #6
    • 20th Apr 17, 12:57 PM
    • #6
    • 20th Apr 17, 12:57 PM
    Essentially, you currently have an unsecured loan. The lender has no direct influence over you - their only recourse is to take you to court if you don't adhere to the terms of the contract between you.

    They now want to change it to effectively be a secured loan, where they can prevent you from selling the house without repaying the loan in full. You'd still be the owner, but you wouldn't be allowed to transfer ownership without their consent, which they'd only provide in return for loan repayment.

    What they're asking is reasonable, and is the way your friend should have set it up in the first place. It matches the way mortgages are set up. However, it is strictly worse for you, and there's no reason you need to agree. I'd be making a counteroffer that has something for both of you, e.g. a reduction in any interest you're paying.
    • stator
    • By stator 20th Apr 17, 1:02 PM
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    stator
    • #7
    • 20th Apr 17, 1:02 PM
    • #7
    • 20th Apr 17, 1:02 PM
    Does he have anything you want?
    Why would you negotiate with him?
    Tell him you are happy with the existing agreement and will continue to make the payments as originally agreed.

    If you think he has some legal grounds for making a request then you need to see a solicitor.
    Changing the world, one sarcastic comment at a time.
    • ReadingTim
    • By ReadingTim 20th Apr 17, 1:17 PM
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    ReadingTim
    • #8
    • 20th Apr 17, 1:17 PM
    • #8
    • 20th Apr 17, 1:17 PM
    Since you have no obligation to agree and that is not in your interest you can just politely decline.
    Originally posted by Miss Samantha
    ...at which point the lender (or their estate) may find a way to terminate the agreement and the OP has to pay the money back, which may cause a problem if they have to sell the house to do so.

    OP - while your mate's son might want your name off the title deeds, he can't do that. However, he can, in exactly the same way as a bank or building society does, put a charge over the property to ensure that he gets his money back when you come to sell it (it you haven't repaid the loan beforehand). This isn't unreasonable, whatever you might think of him personally.
    • jbainbridge
    • By jbainbridge 20th Apr 17, 1:26 PM
    • 1,697 Posts
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    jbainbridge
    • #9
    • 20th Apr 17, 1:26 PM
    • #9
    • 20th Apr 17, 1:26 PM
    ...at which point the lender (or their estate) may find a way to terminate the agreement and the OP has to pay the money back, which may cause a problem if they have to sell the house to do so.

    OP - while your mate's son might want your name off the title deeds, he can't do that. However, he can, in exactly the same way as a bank or building society does, put a charge over the property to ensure that he gets his money back when you come to sell it (it you haven't repaid the loan beforehand). This isn't unreasonable, whatever you might think of him personally.
    Originally posted by ReadingTim
    Indeed. The OP needs to carefully read the original agreement and see where he stands.

    On face value the OP's friend seems to have trusted him greatly!
    • Miss Samantha
    • By Miss Samantha 20th Apr 17, 1:28 PM
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    Miss Samantha
    ...at which point the lender (or their estate) may find a way to terminate the agreement and the OP has to pay the money back, which may cause a problem if they have to sell the house to do so.
    Originally posted by ReadingTim
    Only if they are allowed to call the loan according to the existing agreement, which seems unlikely.

    You'll note that I wrote that OP is only obliged to abide by the terms of the current agreement, which, I suppose, OP has carefully read.
    Last edited by Miss Samantha; 20-04-2017 at 1:31 PM.
    • mrginge
    • By mrginge 20th Apr 17, 1:41 PM
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    mrginge
    ...at which point the lender (or their estate) may find a way to terminate the agreement and the OP has to pay the money back, which may cause a problem if they have to sell the house to do so.

    OP - while your mate's son might want your name off the title deeds, he can't do that. However, he can, in exactly the same way as a bank or building society does, put a charge over the property to ensure that he gets his money back when you come to sell it (it you haven't repaid the loan beforehand). This isn't unreasonable, whatever you might think of him personally.
    Originally posted by ReadingTim
    Personally I think it's totally unreasonable for one party to demand a change of contract terms without offering something in return.
    • stator
    • By stator 20th Apr 17, 2:35 PM
    • 5,619 Posts
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    stator
    ...at which point the lender (or their estate) may find a way to terminate the agreement and the OP has to pay the money back, which may cause a problem if they have to sell the house to do so.

    OP - while your mate's son might want your name off the title deeds, he can't do that. However, he can, in exactly the same way as a bank or building society does, put a charge over the property to ensure that he gets his money back when you come to sell it (it you haven't repaid the loan beforehand). This isn't unreasonable, whatever you might think of him personally.
    Originally posted by ReadingTim
    He can only put a charge on the property if the loan agreement says he can.
    All mortgage agreements say in the T&C that you will allow them to put a charge on the property.
    With this informal agreement I doubt it says anything at all about a charge, so he can't apply for one.

    It may be a 'reasonable request' to put one in a NEW loan agreement for a NEW loan. But it's not reasonable to retrospectively and unilaterially change a loan agreement that is already in effect.
    Changing the world, one sarcastic comment at a time.
    • ReadingTim
    • By ReadingTim 20th Apr 17, 3:11 PM
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    ReadingTim
    Personally I think it's totally unreasonable for one party to demand a change of contract terms without offering something in return.
    Originally posted by mrginge
    I suspect the "something in return" is the chance, here and now, to repay the full outstanding amount if the OP doesn't like the new terms, rarther than slowly over the next 15 years as originally set out.

    None of us have seen the "relatively basic loan agreement" which was agreed between the OP and his mate a decade ago, but I would suggest it's pretty niave to think one can simply rely on that agreement running its course, especially as the estate of one party to it is no longer in agreement with it (as it were). The status quo is extremely unlikely to continue.

    The OP therefore needs to seek specialist, paid for legal advice, from a solicitor, not a random freebie forum "off of the internet"; but ultimately realise that their choices are limited to either accepting the charge, or repaying the loan now. And it will be entirely "legal".
    • Miss Samantha
    • By Miss Samantha 20th Apr 17, 4:17 PM
    • 1,177 Posts
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    Miss Samantha
    but ultimately realise that their choices are limited to either accepting the charge, or repaying the loan now. And it will be entirely "legal".
    Originally posted by ReadingTim
    No, as said if the agreement does not allow the creditor to call on the loan then he has no right to do so and OP can just continue to pay as agreed.

    This may sour the relation with the friend's son, but contracts exist to prevent one party from moving the goal posts as they please.
    • Cheeky_Monkey
    • By Cheeky_Monkey 20th Apr 17, 4:56 PM
    • 1,205 Posts
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    Cheeky_Monkey
    OP - have you continued to make the loan repayments since your friend's death? If so, who have you been paying the money to?

    Or, as I suspect, you have not and it's enabled you to buy a flat with cash as per your previous thread.
    • xylophone
    • By xylophone 20th Apr 17, 5:08 PM
    • 22,001 Posts
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    xylophone
    If the OP does default, presumably the son could ask the court for a charging order?

    https://www.citizensadvice.org.uk/debt-and-money/action-your-creditor-can-take/charging-orders/
    • jimbog
    • By jimbog 20th Apr 17, 5:18 PM
    • 563 Posts
    • 907 Thanks
    jimbog
    In the words of that 80's icon Zamo - 'just say no'
    https://www.youtube.com/watch?v=jCLs0jv_Efk
    The problem with quotations on the internet is that you can never verify their authenticity - Abraham Lincoln
    • Hoploz
    • By Hoploz 20th Apr 17, 5:36 PM
    • 3,544 Posts
    • 3,120 Thanks
    Hoploz
    You need to show the original agreement to a solicitor for advice. Many solicitors will give some basic info for no payment in an initial meeting. Then you can decide whether you wish to proceed with them representing your interests in defence of the son's claim, or whatever. I would think even if you had to pay, some legal advice would be vital in this instance.
    • mrginge
    • By mrginge 20th Apr 17, 6:52 PM
    • 4,039 Posts
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    mrginge
    I suspect the "something in return" is the chance, here and now, to repay the full outstanding amount if the OP doesn't like the new terms, rarther than slowly over the next 15 years as originally set out.

    None of us have seen the "relatively basic loan agreement" which was agreed between the OP and his mate a decade ago, but I would suggest it's pretty niave to think one can simply rely on that agreement running its course, especially as the estate of one party to it is no longer in agreement with it (as it were). The status quo is extremely unlikely to continue.
    Originally posted by ReadingTim
    I would be pretty confident that the status quo would continue, since that is presumably what the legal agreement is and law of contract is fairly well defined.

    I would also be pretty confident that if the other party felt they had the right to add a charging order then they wouldn't be asking for permission to do so.

    And I would also be pretty confident that if the option was sign or settle which you seem to be suggesting, then that would be written in very large letters on the document from the solicitor.
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