2nd Charge on a Property

silvercar

goldiewil wrote:

We have actually exchanged. We understand that the charge was put on the property recently and therefore the seller himself may not have been aware of it.

This is the crucial bit, exchange hasn't happened and presumably won't happen until this second charge is sorted. So forget ideas of suing solicitors.

pboae

You might also be interested in this thread http://forums.moneysavingexpert.com/showthread.html?t=244553 from last week.

Bossyboots

silvercar wrote:

This is the crucial bit, exchange hasn't happened and presumably won't happen until this second charge is sorted. So forget ideas of suing solicitors.

You read that wrong. Even the bit you quoted says that they HAVE exchanged.

Debt_Free_Chick

missk_ensington wrote:

Bossyboots- the OP's soliciots is at fault 100% as they have been negligent in their enquiries.

I don't think we know that for sure. The 2nd charge went on after exchange and the OP wrote

Two days before completion we were informed by our solicitor that following the final searchs, a 2nd charge had been put ont he property

So it looks like the solicitor did a further search prior to completion.

I could be wrong but .. .what should the solicitor have done differently?

missk_ensington

It all depends on whether the Buyer was informed of the first charge! And on discovering the second charge, whether the solicitor advised and explained all the implications before allowing exchange. There are a lot of 'If's' in this situation.

If the OP knew what was going on, knew about all the charges and what they meant and that they couldn't complete, but still went ahead then they could be at fault.

DFC- They say the solicitor informed them 2 days before completion, by this time they would already have Exchanged contracts. Solicitor should have made these enquiries before exchange, not after it.

The next 'If' factor is did the Vendor know about these charges but deliberately not declare them? If so that is misrepresentation and you should have a form somewhere with all the particulars on it, and questions answered by the Vendor.

goldiewil

thank you all for the advise, its been really helpful.
when our solicitor carried out the initial searches -early Many 2006 there was no 2nd charge on the property. The only charge on it was the sellers mortgage lender. He then carried out the final seraches between exchange and completion, that is when he found the 2nd charge.

We are not getting anywhere with our solicitor now as he says its up to the seller to sort this out and therefore cannot chase. We do not even know if the seller is truly trying to resolve this as we only have the estate agents word that he is!

AMILLIONDOLLARS

Why would a solicitor do TWO Searches? and is this normal practise?

Debt_Free_Chick

missk_ensington wrote:

DFC- They say the solicitor informed them 2 days before completion, by this time they would already have Exchanged contracts. Solicitor should have made these enquiries before exchange, not after it.

But ....

goldiewil wrote:

We have actually exchanged. We understand that the charge was put on the property recently and therefore the seller himself may not have been aware of it.

I take this to mean that the search was done, OP exchanged, solicitor did final searches and then found that since exchange and after the first search, that a second charge had been placed on the property.

I don't want to get into an argument but I think the OP should be cautious about thinking that her solicitor was negligent, as that doesn't seem to be the case.

The next 'If' factor is did the Vendor know about these charges but deliberately not declare them? If so that is misrepresentation and you should have a form somewhere with all the particulars on it, and questions answered by the Vendor.

Yes - the vendor will have known. A charge can only be placed on a property for a debt by an application to the Court. Once the lender applied to the Court, the vendor will have been asked if he/she wanted to appear at Court or reply by post. Anyway, before the charge can be placed, the vendor will have first had a CCJ and then defaulted on it.

The Vendor will have completed the seller's information form and handed it over to the buyer (via solicitors) before exchange. He may well have known about the CCJ by then, but might not have known that the lender would go for a charge.

All that said .... the Vendor knew about the charge at some point. He should have told his solicitor as soon as he received the Court papers. But it sounds like he has serious debt problems and telling his solicitor - when he is desperate to sell to repay his debts - possibly did not occur to him. Perhaps I'm too flexible and understanding? He could just have been trying to pull a fast one or simply hoped that the property sale would complete before the lender had a chance to register the charge.

As you say .... "too many ifs ..."

goldiewil

i have just downloaded the charge document from the Land registry website and found out that the charge was put on the property on 8th June 2006, although the initial court order to pay the outstanding amount was in March 2006.
There are actually two charge amounts of appprox £4K and £10k.

As the initial searches were done early in May and we exchanged on 17th July, is our solicitor right in allowing us to exchange almost 2 1/2 months after the searches were done?

AMILLIONDOLLARS

I think some as already asked this question, who has the deposit money, your solicitors or his? and surely it would be in the best interests of his lenders to see the sale go through, to get back some of their money, rather than none!!