Cousin wants a charge over my property

lrr_2

As there is nothing on paper I would think there is not much they could do. The house is up for sale, you cant force someone to buy it. They will just have to wait like everyone else trying to sell.

Jowo_2

jakeyboyne wrote: »

The property's been on the market for about 5 months now, and I've had 2 viewings, 1 offer. Which my cousin told me to reject (Offer of £95,000)

Did you offer and did she reject a proposal to accept that sum and your solicitors draw up an 'IOU' for the outstanding sum, plus agreed interest?

Because getting 95% of the loan back (albeit with additional conveyancing fees), plus a legal agreement that compels you to pay back the outstanding amount, plus interest, might be your only chance in a flat market.

Voyager2002

lrr wrote: »

As there is nothing on paper I would think there is not much they could do. The house is up for sale, you cant force someone to buy it. They will just have to wait like everyone else trying to sell.

That may or may not be the case. Clearly there was an agreement (contract) between these two people, and if the situation was discussed with others who could confirm what was agreed, then it might be possible to enforce the contract. Having something written down does not make it "legal" but simply is an easy way to confirm what was agreed.

Anyway, the cousin was obviously very kind and very trusting, and I hope that this goodness will not be abused. If the house really will not sell then the cousin's ownership could be legally recorded, and perhaps the OP could start paying rent.

Of course, the simplest solution would be to deal with the debt on the OP's credit record. If it has not yet been paid, then paying it off now would do a lot to improve the situation. Alternatively, how old is it? After six years it is likely to disappear from the record.

pinkshoes

If the £100k was paid in cash for the house, then presumably over the last 6 months you've saved money from living mortgage free?

By saying "there was nothing down on paper" won't get you far, as you had a verbal agreement.

Could you offer her £415 a month for the loan, which is the equivalent of the interest she would be getting on the money at 5%?

bristol_pilot

You could tell your cousin that, if she tries to get the money back, then you will simply claim that the money was a gift. There appears to be no evidence of a contract, oral or written, in place and even if there were such contract it would be very unlikely to conform to every aspect of the Consumer Credit Act. Your cousin has been a bit foolish really as it is nigh on impossible in the UK to get money back from someone you have lent it to (see multiple threads on this forum by people who have lent money to relatives and now can't get it back).

silvercar

Your cousin could get a charging order on the property, either by you agreeing or going to court. A charging order means you can't sell without her/his agreement to release you from the charge. Exaclty the same as a mortgage. So when you sell you would need to get the cousin's acceptance that the charge is lifted - either because you have repaid in full or because cousin agrees you can pay most back and owe the rest.

With a charging order and you not making payments, the cousin could persuade a court to allow to repossess the property, though with no written proof of a repayment plan this is less likely.

dopester

Voyager2002 wrote: »

Anyway, the cousin was obviously very kind and very trusting, and I hope that this goodness will not be abused.

Or the lending cousin was very very stupid. Nothing on paper. The money lent could be claimed as a gift if the OP wanted to be nasty about it - not that I'm suggesting that. Just showing how stupid the lending cousin has been.

It sounds like the lending cousin thought he/she was cleverly lending to buy at the bottom of the market with the £100K. Then he/she expected the cousin who accepted the money to remortgage when natural HPI returned and the banks restarted joyfully handing money out again to all askers... house prices doubling every seven years as per normal, giving his/her money back.

Well here is the news... it wasn't and isn't the bottom of the market when this super £100K idea went ahead.

Anyway if borrowing cousin is on the title deeds, and lending cousin is not, and has no paperwork... then lending cousin could be in difficulty. These arrangements without paperwork can be very hard to prove. Lending cousin would need an expensive commercial litigation solicitor imo, to get anywhere.

I've seen instances where they've lost, or when those who've lent have had to accept a lower settlement - for their chances were not good before it reached court. The OP is in a quandary, and may even feel guilty, but it is not all of their own making.

Basically, my cousin lend me some cash last year, to purchase a house, with the agreement I would mortgage it in about 6 - 7 months to repay her. At the time it was when banks froze lending and house prices reduced a little.

Long story short, loan amount £100,000 .... nothing written on paper about loan length.

OP - how much encouragement did the lending cousin give you to proceed with this arrangement? Were you the one who was pushing for it, or was it all your cousin's idea?

Britwife

I wouldn't really be worrying about what she can do legally as this is a lot of money she has loaned to you. Stupid or not, there was a strong trust with you and that's why she loaned you the money.

Have you paid any of it back to her or used the money living mortgage free to save up as a down payment towards the mortgage in your name? That might be a good way to at least get the ball rolling in giving some of her money back to her.

The bottom line is, you made an agreement with her, why put her in a position that she has to pay more money to get back what she is rightfully owed. I would have a chat with her and be very humble about coming to another agreement. I would have countered the offer at say 98 grand and then worked on paying back the other 2 grand. It sounds like you took on a house you couldn't afford, if you couldn't get a mortgage to buy the house, then how were you planning on getting a mortgage half a year later?

I don't mean to be harsh but you have to put yourself in her shoes. I hope you guys can come to an agreement and you don't have to sell the house.

Lance

Rather than bother with a chargeing order while your already trying to sell why not sign the house over to her and she can try and get full price for it and pay all the legal expences on top. You both made the agreement but she is the one who didn't, apparently, check out your credit record or get legal advice / written agreement.

Jowo_2

pinkshoes wrote: »

If the £100k was paid in cash for the house, then presumably over the last 6 months you've saved money from living mortgage free?

In an earlier post, the OP confirmed that he had no savings...