Unilateral Notice - Removal

John_Berry

My solicitor's spoken to the banks solicitors and the 2003 buyer refuses to remove the unilateral notice and still wants the property. The bank will not accept his claim on the property and will not pay him any money.

It was a criminal inhabitation notice under the 1988 justice act not to dispose the property made in august 2003 (estate agent informally says due to illegal activities taking place in the house) but theres no mentions of it being lifted since then. No further money money was lent since the 1998 mortgage lent to buy the property. I think DvardysShadow might be right and the inhibition notice might have not allowed the sale to take place. I don't understand why the buyer didn't try and sue the seller for his deposit when he has had 7 years to get his deposit back. If the inhibition notice did cause the vendor to not proceed then isn't this a frustration of the contract caused by a legal order of the court?

This won't bare any weight but my opinion that i am forming after digging around is the seller wanted a very quick sale in 2003 before the courts made an order on his assets. The buyer agreed to a quick sale and exchanged contract and gave deposit. He then had difficulty getting finance and couldn't complete in the short 2-3 week time scale and before it could be resolved the courts put an inhibition notice on the property and the vendor could not sell and being the crook he was he kept his deposit. I get the feeling the 2003 buyer sees who ever buys the property now to be a weak entity and wants to get the property by forcing the 2003 contracts as legally enforceable clause. He dosen't want to take the banks on and the previous owner is no longer around.

silvercar

Well he may not want to take on the bank, but the bank won't be able to sell until the 2003 buyer is removed from the deeds, so the bank will end up taking the 2003 buyer on!

Just had another thought on the bankruptcy - if the 2003 buyer has interest in the property ( and noting this on the deeds in 2007 suggests he probably has), then there is no equity for the official receiver to take; so the lender should be able to buyout the official receiver for just the legal costs. Though I do wonder in the 2003 buyer could also try to buy out the beneficial interest.

maria6259

1. November 1998 - Vendor buys property. Lender provides funds under mortgage.
2. May 2003 - Vendor agrees sale and accepts deposit. Buyer can't complete in time
3. July 2003 - Court places order so vendor can not dispose of property.
4. Court Order lifted [or not]
5. Lender possibly provides further advance???
6. January 2007 - Vendor declared bankrupt.
7. August 2007 - Unilateral notice in breach of 2003 contract of sale placed in register
8. June 2009 - Vendor left country
9. March 2010 - Property repossessed

I also found this very interesting, and probably dont understand it all!

However, could it be that the Vendor and Buyer (in 2003) exchanged contracts, but between exchange and completion a court order was placed on the house inhibiting the Vendor from selling, therefore rendering him unable to complete.

"The estate agents reckon the buyers mortgage didn't come through in time and the seller refused to give the deposit back"

Surely this would only delay completion by a few days and incur extra interest charges to the buyer, not scupper the purchase/sale completely?
It sounds more likely that the seller failed to complete.

Just a thought and probably way off the mark!

John_Berry

The banks are willing to sell but initial contract of exchange sent for signing had no disclosures. My solicitor phoned them up to confirm that all the notices and charges would be removed on completion. Half an hour later and my solicitor had received a revised contract of exchange with a disclosure of unilateral interest mentioned on it.

At this stage we decided to look deeper into this situation and how the notice would effect us as buyers. We have decided not to exchange contracts till we know how much deposit was paid in 2003 and what right to claim he has and if that claim is still valid and whether his unilateral notice will carry any weight in court. It doesn't help that we have no documents or proofs or contracts for 2003.

He does seem to have a good case for contract being breached by previous seller, but the seller didn't complete and was unable to complete because of a court order and subsequently declared bankrupt and property taken into receivership and passed onto the banks.

The banks don't except his claim of contract but are unable to have the unilateral notice removed without taking him to court. Silvercar you mention the banks can't sell the property without removing the unilateral notice. Is it a legal requirement or just becuase potential buyers will stay clear of the property?

Ulfar

Its a legal requirement, the whole point of these notices is to prevent the sale of the property.

In this case the bank have repossessed and become the owner, they not you will have to sort out this third party. Until they do then the house cannot be sold. If I was you I would walk away.

John_Berry

It seems a fault of both. buyer delayed by lack of funds maybe 1-2 weeks and the seller was unable to complete due to court order preventing dispossession of title after he entered into contract. The blame would be more on the seller particularly as he kept the deposit. But how will this effect me as a new buyer buying under repossession from the banks receivers and the fact the contract could not exchange due to order of court. The buyer should have taken the seller to court in 2003.

Ulfar

What should have happened is I am afraid irrelevant, the bank is now the owner and it is their mess to sort out.

Until they do this property is unsellable.

DVardysShadow

John_Berry wrote: »

I get the feeling the 2003 buyer sees who ever buys the property now to be a weak entity and wants to get the property by forcing the 2003 contracts as legally enforceable clause. He dosen't want to take the banks on and the previous owner is no longer around.

That is about the size of it.

The buyer had a claim against the seller. When the seller went bankrupt, his claim was against the seller's Official Receiver. Now the buyer is trying to make out a claim against the lender, because the lender has a responsibility to the bankrupt estate. It is a 3rd hand claim now and he is looking at taking on the buyer of the property - 4th hand.

It is too messy for you to deal with. The buyer won't take it to court - it looks to me like £1,500,000 in legal fees to get an answer from a court [to pluck a figure out of the air]. You don't have the legal standing to deal with it until you buy - but you need to get it sorted out before going further.

Ultimately, I think the lender will have to deal with it, perhaps by buying him off, perhaps by going to court to get the notice struck down. Unless they can dupe someone into taking it on.

John_Berry

DVardysShadow, you have pretty much summed it up into a manageable understanding of the situation. That is pretty much how it is in plain English without adding the legal and technical jargon to the problem. It could be a case that could go on for along time being bounced around.

DVardysShadow

John_Berry wrote: »

The Bank ... advice that we must after purchasing resolve this by negotiating or taking the other party to court to get them to cancel the notice. What we are unsure of is if we go to court and we have no documents or paperwork or proof of what contract was exchanged with the previous owner and we where never the recipients of the deposit.

My solicitor says the other party will be set to make 2/3 times the price he was going to pay in 2003 so he will definitely take you to court to try and win the property back. This guy is being such a bully and a menace.

I don't regard the guy as a bully and a menace. Looking at it from his POV, he has lost a deposit and has lost the gain he could have made on the property. We have not talked about the value of the house, but if I had put down a deposit of 10% on a house at the time I bought my second house - and then lost it, while it would not have ruined me, I would not be in my present position, over 20 years later. He has suffered a life blighting loss.

The unilateral notice is the only asset he has left out of this, and it is a shame that he did not put it on the property before the bankruptcy. My overnight thought is that I am actually on his side to play this for whatever he can get - obviously not against you - but you should stand aside for the bank to sort it out with him.

John_Berry wrote: »

DVardysShadow, you have pretty much summed it up into a manageable understanding of the situation. That is pretty much how it is in plain English without adding the legal and technical jargon to the problem. It could be a case that could go on for along time being bounced around.

OK, to qualify what I said, the former buyer probably will not take on the lender in court, but may well take on anyone who buys the repo - possibly with pre legal action such as solicitor's letters - possibly with a nuisance court action designed to make the repo buyer back down and pay them off.

Now the question I have is how much should or would he settle for. I think the right answer is something like

[deposit * house price index 2010] / house price index 2003

ie the same percentage of the current house value as the original deposit was in 2003.

In your position, my first reaction would be to drop the property like a hot potato. But after reflecting that the guy may be a paper tiger with a legitimate grievance, you might agree with me that he and you are probably punching at the same weight as far as court action is concerned - ie neither of you really wouldn't want to go there.

So you could contact him and try and negotiate a possible settlement, while you are still not the owner. The advantage of doing this before you buy is that the guy has no grounds to be adversarial with you - you would be an ally in him getting what he feels he has lost. That would change the instant you bought the house.

Of course, the guy may not see it this way and there could be no deal to be done, in which case you would have to walk away from buying the property. My bet is that even if you get an initial hostile reaction, he will reflect and may be come back to you, possibly after 6 or 8 weeks.

If he would settle along the lines I suggest, then you could adjust your offer to the bank, or you could insist that the bank settle with him and indicate the terms. Obviously, if you were to settle with him, you would have to budget for higher legal expenses to get him bound in legally, but the legals should be far cheaper than an adversarial settlement.

It may be that he wants far more, in which case this will no be settled within a reasonable time span for your purchase.