anyone had this happen to them!

hannahsmummy1

Hi All

I will try to keep as brief as poss.. We were due to exchange and complete on 20th May- we got to new destination (we were moving quite a distance) on said date and find out we cant exchange as people we are buying off owe 14K to builders for the extension that has been built. Nothing up to this point had been relayed to anyone that this money was outstanding. The couple have been summoned to court on 6th June and we have to wait until then to find out what is happening- we have conditionally exchanged contracts but this is subject to this court thing on 6th June. We are living in the house but im petrified that the court date will come and the couple will decide not to sell or something else will go wrong. I should add that the couple are no longer together and are in the process of divorcing. What I want to know is has anyone had this happen to them and if so what was the outcome- The other point which is what I dont understand- is that if this money is owed- how is that our problem? ie how has that stopped us moving in- sorry to sound thick.... :rotfl:The solicitor has told us that once the house is sold there is more than enough to pay builder but not sure where that leaves us tbh.

PasturesNew

If the money is owed and the sale falls through, that's your problem as you can't buy it any more.

As you're in the house you've now got "rights" - so they can't turf you out immediately.

This could all get very very messy .....

ILW

Sounds like creditor has put a charge on the property.

hannahsmummy1

Thanks thats what im afraid of happening- when you say sale falling through- what do you mean by that- Im sorry to ask questions but my head is done in at the moment. We assumed that they want to sell as they owe money to the builder- but maybe not the case?! A ''contract'' was drawn up that stated that we can stay here until the 19th July if it all goes wrong- so I have been looking at other properties as I have no faith what so ever that this will go our way (I will be amazed if it does)

ILW

Why dd you elact for exchange ond competion on the same day?

PasturesNew

If they owe the builder £14k and he puts a charge on the property - when it is sold he's paid from the proceeds.

The problem comes when there isn't enough 'profit' from the sale of the house, after the mortgage is settled, to pay out any charges.

Without him being able to get his £14k back he's in a position to be able to block the sale.

It all comes down to the figures.

If there is enough money in selling the house to settle the £14k bill it'd have gone straight through. Therefore, there must be a shortfall.

hannahsmummy1

thanks for that its made it a bit clearer- im no good with legal jargon that my husband relays to me about whats happening. We wanted to exchange weeks before completion but there was a hold up with some paperwork coming from their solicitors

pararct

Not looking good, if you want to stay there you only have the one option of trying to strike a deal with the builder who has levied the charge. Does your solicitor know what the shortfall is?
I know it sounds perverse that you have to settle a debt for the person you have bought from but this is why solicitors strongly advise against exchange and complete on the same day.
Sadly for you this may be the only way you can progress this to a sale.

In the legal sense there is no such thing as conditionally exchanged, you either have or you have not. Not sure how this leaves you in relation to you have taking up residence in the property, I suppose the easiest way is you are squatting but then squatters have rights anyway.

You need to be talking to your solicitor to get this sorted out........

hannahsmummy1

our solicitor told us that there is enough money to pay the builder after the sale goes through- but apparently nothing can be done until this court date on 6th June- the couple split up ages ago and apparently had not been picking up mail and the court summons had not been picked up until the EA gave a wad of mail to them a couple of weeks back.

hannahsmummy1

sorry meant to add that we have been talking to solicitor who said nothing more can be done until the outcome of going to court is known- and I dont know what possible outcome could be- it does sound bad and am trying to look on positive side but slowly slipping away!!

silvercar

So the builders are taking the seller to court to ensure they get their money. In the mean time it sounds like they have put a charge on the property (or some sort of interim block) to prevent it being sold in the mean time.

On the court date, either the sellers will appeal the charge and the amount they owe the builders or they will pay off the builders at the court door or they will get a charge put on the property.

If there is enough equity in the property, then the charge can be cleared and the property sold.

The only problem is if the couple decide they don't want to sell due to them getting back less money than they thought, though if you have conditionally exchanged subject to the charge being lifted or the interim block removed, then this scenario looks not to be possible.

Ask your solicitor exactly what the conditional exchange means.