Charge on property further up the chain

wheldcj

We purchased a property back in March and the sellers decided they would downsize to a 2 bedroom apartment with no chain - it seemed a relatively simple transaction, we were going to rent out our property out so it was a hopefully straightforward 2 chain situation.

Fast forward to today and what was hopefully the week of exchange. It now turns out the owner at the flat at the top of the chain has a charge on his property from Bank of Scotland which appears to relate the a loan he took out for a business he had with two other partners.

The story is that the charge was paid and cleared - however the partner did not sign the paperwork. He has since died and his son is now refusing to sign the required documentation for the land registry.

I am assuming there is much more to this story then we, at the end of the chain are party to. However the upshot now appears to be the seller of the apartment has to litigate to force the son into signing the charge off.

Without this charge being removed our vendor cannot complete the purchase and have threaten to collapse the whole chain.

I just wondered whether anyone has had a similar experience, knowledge of how these charges work when they appear to have been paid and cleared and most importantly if litigated how long this may take to resolve.

Thanks to everyone for helping!

G_M

The Charge could be removed within 24 hours.

Or it might take 6months.

wheldcj

I am guessing the 24 hour bit would be if the son decides to be honourable and the 6 months timescale is if he feels his deceased dad's ex business partner should be strung along to make his life painful...

_Andy_

"I just wondered whether anyone has had a similar experience, knowledge of how these charges work when they appear to have been paid and cleared and most importantly if litigated how long this may take to resolve."

What has your solicitor said?

eddddy

Hi wheldcj

I guess it depends on the son's underlying reasons for refusing to sign-off the charge.

For example, if the son is holding his father's ex-business partner to ransom in a dispute over money, I guess it could take years for them to reach an agreement. (It depends how bloody-minded/desperate/conciliatory each party is.)

Best to find out as much as you can about the reasons and make a judgement about whether to stick with it or walk away.

Thrugelmir

wheldcj wrote: »

The story is that the charge was paid and cleared - however the partner did not sign the paperwork. He has since died and his son is now refusing to sign the required documentation for the land registry.

If the loan has been repaid then the bank will remove the charge.

Sounds as if there's still a debt that requires settling. Possibly the bank was repaid it's debt when the other partner died. The son is now seeking due recompense possibly.

wheldcj

Our estate agent was clear in saying that the seller had paid his charge and that it why I couldn't understand why the former business partner (or rather his son) would have to sign anything.

Surely if you want to borrow off a bank to fund a business then it would only be the bank who would/could sign the charge off.

I will speak with my own solicitor for advice but as you can see I trust your views rather that his. Also as this is a transaction if further up the chain I wasn't sure what he could do except offer general advice.

If this seller knew before he started that he had a charge on the property which would effectively prevent the sale would there be any legal recourse we would have against him given we could be in excess of £1,000 (big mortgage application fee) worse off if the sale falls through? It was a fait accompli that the transaction would never be possible.

Thrugelmir

wheldcj wrote: »

I will speak with my own solicitor for advice but as you can see I trust your views rather that his. Also as this is a transaction if further up the chain I wasn't sure what he could do except offer general advice.

Without the full story than any opinion is mere speculation. Out of your hands as well.

Maybe the fact that they are downsizing is a further clue to a more complex situation.

<sebb>

If you trust the views of some random strangers on an Internet forum more than your solicitor then you have the wrong solicitor.

I am in a similar position and could almost have written the original post, in my case it's a court of protection order outstanding on the house my vendors want to move into.

The only reason we haven't pulled out is because we haven't even seen a single house we want to view on rightmove but I'm checking every day. If we do, and find something else we like we'll buy that instead.

There's nothing you can do if your vendors won't break the chain.

wheldcj

Sebb

Thanks. Our solicitor is the archetypal every second counts merchant! Hence the gratitude I have for random strangers!!

Best of luck with your endeavours, we could write a book on our problems over the last year or so.

Land_Registry

Thrugelmir and <sebb> give good advice and as they suggest without the full facts it is very difficult to add anything to the thread.

The key from a registration perspective is knowing how the charge is actually protected on the register - if it is registered as a legal charge then as you suggest the lender is the one who would release it

If it is registered as a restriction for example and in favour of a third party then other requirements exist.

Either way though it would appear from what you have posted that the business aspects remain in play in some way