Reposession

lindadi

I'm in the process to buy a repo and I got the contract yesterday there are so many amends the selector seller had done t the standard contract and one of them id that I have to give them permission to get in the property for 12 months and I take the property with encumbrances. Has someone bought a property and have similar conditions in his contract . Is anybody can help about understand the process

DannyboyMidlands

I had the 12 month thing in mine. I believe it allows for a possible future valuation on behalf of the repossesed person. Considering that they owe the difference between sale price and outstanding debt, they might want to challenge the sale price with the lender.

What are the encumbrances? What does your solicitor say?

[Deleted User]

In the contract for the repossession I've just exchanged on it states that if I decide to sell I must offer it to the bank first within the first year.

kingstreet

lindadi wrote: »

I'm in the process to buy a repo and I got the contract yesterday there are so many amends the selector seller had done t the standard contract and one of them id that I have to give them permission to get in the property for 12 months and I take the property with encumbrances. Has someone bought a property and have similar conditions in his contract . Is anybody can help about understand the process

What does your solicitor advise?

lindadi

I don't know what are the encumbrances and my solicitor says that The Contract terms are typical of a lender selling in such circumstances in particular reflecting the fact that the Society has limited knowledge of the property as mortgagee having never “occupied” the property.
At the outset the Solicitors acting for the Society indicated that their clients would not agree to any amendments to the terms and conditions – they are non-negotiable.
The contract is pretty much about the responsibility is our for all the encumbrances ( without knowing exactly what they are) and we assume responsibility for any rent charge liability arose prior to the date of completion. they was also another statement about if the money we pay for the property will not cover the debt we are responsible for the payment. Did you have something similar in yours?

GDB2222

Are you saying that you do not understand the contract?

billybear1

I hav just completed on a repossession and had no such clauses outlined in my contract. The main point the solicitor raised was that it was sold as seen, that is all.

billybear1

lindadi wrote: »

The contract is pretty much about the responsibility is our for all the encumbrances ( without knowing exactly what they are) and we assume responsibility for any rent charge liability arose prior to the date of completion. they was also another statement about if the money we pay for the property will not cover the debt we are responsible for the payment. Did you have something similar in yours?

There is no way I would accept this, this means, as I interperet it, that any shortfall on the first persons mortgage is to be covered by YOU! So you would be paying off their negative equity and potentially (if they had say a 120% mortgage) above market value. Your solicitor needs to check the outstanding balance on their mortgage. May also give you an opportunity to renegotiate.

marleyboy

Reminds me of a time my Sister bought a property near the Lake District, she made a £90.000 clear profit on her old property and invested it all into buying what she was planning to turn into a lakeside coffee house.

Having NOT looked into the deal thoroughly enough, it turned out she had also bought the debt that came with it, she lost all her money and equity almost overnight as a result.

GDB2222

billybear1 wrote: »

There is no way I would accept this, this means, as I interperet it, that any shortfall on the first persons mortgage is to be covered by YOU! So you would be paying off their negative equity and potentially (if they had say a 120% mortgage) above market value. Your solicitor needs to check the outstanding balance on their mortgage. May also give you an opportunity to renegotiate.

I think that you are interpreting it far, far too literally. I am sure that the OP's solicitor will ensure that the mortgage charge is removed. Mortgagees in possession tend to put these all-embracing clauses in, but often they have little practical effect.

For example, rentcharges are very rare. Even if they do exist, they will show up in the Land Registry, so you will know about them if they apply to your property. The annual amount tends to be quite small, and in any case they will be extinguished completely by 2037. The problem for the vendors is that often it is quite difficult to trace who owns the rent charge, and so it is difficult to get a receipt to show that all the payments have been made up to date. The OP should check with his/her solicitor whether a rent charge does apply to the property and, if so, how much the annual amount is.

Richard_Webster

I am sure that the OP's solicitor will ensure that the mortgage charge is removed.

If the mortgage lender is a first mortgagee selling under its power of sale then the mere fact of transfer using a TR2 removes the mortgage.

Mortgagee's solicitors get fed up with ignorant buyers' solicitors asking them to provide a discharge for their lender client's mortgage.

If the mortgagee is a second or subsequent mortgagee then they must pay off prior mortgages to pass a good title free of existing mortgages and in that case the buyer's solicitor does need to make sure they will be paid off and should seek an undertaking from the seller's solicitor to do this. If he won't give the undertaking then I wouldn't advise my buyer client to proceed.