Buying a repossession - weird clause in contract

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Rebchappers wrote: »

I dont agree with this... we have been to purchase two repossessions now and this clause was not in either of the contracts

I have to say, I've not seen such a clause either when dealing with a repo. being sold by NatWest. They predominately used the 'Standard Conditions of Sale' and with some amendments.

neilmk

Hi Guys

Thanks for all the feedback. The exact wording is as follows...

"Inspection by the vendor"

The purchaser agrees to allow the vendor and /or its authorised representatives, surveyors and valuers to inspect both the interior and exterior of the property on not more ethan three occasions during a period of two years commencing with the completion date subject to the vendor or its authorised representative, surveyors, valuers or solicitors giving reasonable prior written notice to the purchaser. This clause shall not merge on completion.



The other worrying clause is as follows....

The buyer shall not be entitled to delay completion on the grounds that the seller's solicitors do not have in their possession a transfer sealed by the seller in escrow pending completion. In this event the Buyer shall accept an undertaking from the seller's solicitors to send the sealed transfer to the buyer's solicitor as soon as the seller's solicitor receive the same.


Surely our mortgage company will not be happy with this one? Our solicitor has written to our mortgage company today to ask this question but seeing as they have had the contract 2 weeks and we are just to exchange on wednesday I feel they have left this a little late!

Cheers

Neil

puddy

i wouldnt be happy with the second thing you've mentioned, seems to me they cant call the shots at the moment, its a buyers market, make them wait until you have everything you're happy with

Ilian2008

Hi, again i have seen this before. 2 years is a really long time though. it should really be max 3-6 months. It says they will give you reasonable notice but of course it shouldnt really affect you save for the invasion of privacy. You could think of it as being akin to buying a plot of land and the seller reserving a right to give you notice to access your land in order to get to a tricky bit of his property and repair it.

The clause regarding the transfer is a pain and is another example of lenders aggressive practices but they will want to mitigate their loss and get their money in a.s.a.p. Its unlikely they wont sign one of course and often any delay is potentially a signatory hasnt got round to signing one of the many thousands of transfers in front of him.

(I am a Solicitor but this information is for information purposes only and not to be exclusively relied upon nor is liability accepted for non-fee paying clients)

Ilian2008

P.S, an undertaking from the Sellers solicitors to send it when recieved gives some comfort. What you find is that a lot of lenders solicitors have evolved some aggressive terms in the contracts over the years especially after getting burnt. Its a bit like aution contract special conditions can be really gruelling and harsh

(I am a Solicitor but this information is for information purposes only and not to be exclusively relied upon nor is liability accepted for non-fee paying clients)

neilmk

Thanks Jenner, our problem is the 28 day deadline is up on Wednesday, and the contract states across the top in bold that NO AMENDMENTS WILL BE AGREED. So it seems we accept what they are saying or walk away.

This is the hardest decision of our lives at the moment as we love the house but everyone we have spoke to about all this has had a look on their face of 'hmmm im not quite sure'...

nixinix

Brought a repo 3 months ago our clause was if we wanted to sell within three months of purchase they had first refusal - in otherwords don't buy as a do-er upper and expect a quick profit! (Brought as long term family home so no issues for us!) We also had a strict deadline which we were due to meet and the the repo company slowed it down by insisting on an extra advert - they had to ensure they had done everything possilble to get best pos price or risk previous owners being sued! Unfortunately if you want that house they hold all the cards you either go for it or you don't = I'd ask for an explanation of the clause and an example of it would be enforced but I would not expect to get it removed.

Also re elec and gas and water - we were told buy as seen, no way allowed to check - surveyor is covering himself because he can't check and then you can't come back to him when it needs a new boiler!

HTH

puddy

neilmk wrote: »

Thanks Jenner, our problem is the 28 day deadline is up on Wednesday, and the contract states across the top in bold that NO AMENDMENTS WILL BE AGREED. So it seems we accept what they are saying or walk away.

This is the hardest decision of our lives at the moment as we love the house but everyone we have spoke to about all this has had a look on their face of 'hmmm im not quite sure'...

surely they havent got much of a choice, they either wait for another couple of weeks whilst they get the stuff to you that you need to ok it, or they waste another 4 - 6 weeks, plus the costs involved in already instructin their solicitors, plus paying whatever extra selling costs would be involved if they now took it to auction.
what would you do if you were the seller, you would just wait until the buyer had received the document they want and carry on??

i know what you mean though, you've seen this house, love it, want it, are thinking 'whats the worst that can happen on the documents', dont want to lose the property for the sake of these items. i would find it a very hard decision to make despite the advice ive given here, i would want to take the risk, but then wojld be too scared

GDB2222

I have bought about 10 repo properties in my lifetime, and I think I've seen it all.

On the whole, the contracts tend to throw everything in, including the kitchen sink. The criterion about 'no changes to the contract' is purely to save costs for the vendor. I wouldn't worry about negotiating contract terms, as they have gone far too far with you just to ignore you if you have a few reasonable concerns about the contract.

On the two contract terms you are worried about, I would not be concerned about the inspection clause, as long as you are expecting to be there for at least two years. In practice, they almost certainly won't inspect, but if they do, so what? The clause doesn't require you to make them tea or tidy up the place. It's all 'belt and braces' on the part of the vendors. (Once, they wished they had put this clause in, so they stick it in all future contracts, even though it's not needed.) If you sell in the next two years, it could be a problem, as your buyers might be upset by it.

On the part of the contract dealing with the completion, that is more of an issue. You need a stronger undertaking on the part of the vendors, ie that they will definitely supply the completed transfer within a reasonable time. I suspect that that is actually implied in the contract, and you could ask your own solicitor what he thinks about it. If you look at it from the vendor's point of view, it's actually not quite so ridiculous. they accept that they have to transfer the property to you, but it may need a board resolution, or the required officials may be away on holiday. they are just covering their butts again. In practice, it will all go swimmingly. You will get access to the property on completion, and the transfer document will probably turn up a few days late, which has no practical consequence - as long as it does turn up within a couple of weeks.

As I said, have a chat with your solicitor about this, but I wouldn't necessarily pull out over these contract terms. If you do have some clout in a buyer's market, i would use that to secure a reduction in price, not to argue about some (admittedly unreasonable) contract terms that are just in there as a long stop. Still, that's a commercial decision that you must make.

SouthCoast

Just a thought, but as the vendor is a subsiduary of a USA company are they bringing USA laws into the contract?