Buying flat conversions

Vetyver

I understand that if a seller does not have enough capital to pay off the rest of their mortgage loan, the mortgage lender will not agree to let them sell their asset for less than the loan value.

What if the seller has converted their mortgaged property into two self-contained flats, and is selling them separately? Does the seller 100% need to sell both flats at the same time to satisfy the lender, if selling just one won't cover the loan value on its own?

I'm asking because, frustratingly, my purchase is being held up indefinitely, as the buyer of the other flat has had a change of circumstances...

Vetyver

Anyone? No-one?

cattie

First & very important, has the vendor notified the mortgage lender about splitting the house into 2 separate flats & had their permission to do so?

Flats normally have a lease, so do these 2 flats have a lease & who is the freeholder?

camptownraces

Vetyver wrote: »

I understand that if a seller does not have enough capital to pay off the rest of their mortgage loan, the mortgage lender will not agree to let them sell their asset for less than the loan value.

What if the seller has converted their mortgaged property into two self-contained flats, and is selling them separately? Does the seller 100% need to sell both flats at the same time to satisfy the lender, if selling just one won't cover the loan value on its own?

I'm asking because, frustratingly, my purchase is being held up indefinitely, as the buyer of the other flat has had a change of circumstances...

You can't "just" convert a house into two flats without planning permission. If you did do that, and even if the local planning authority never discovered what had happened, you would not be able to sell either flat for at least four years, because no buyer would touch it without a certificate of lawful existing development from the planning authority.

(Apologies OP if it's not "you" who's consdering this option)

Vetyver

cattie wrote: »

First & very important, has the vendor notified the mortgage lender about splitting the house into 2 separate flats & had their permission to do so?

Flats normally have a lease, so do these 2 flats have a lease & who is the freeholder?

Ooh. Not sure about the first. The vendor has been renting out the two flats separately for 9 years already though.

As for the lease, the vendor is the freeholder and has just extended both leases; he wishes to sell both buyers the share of freehold after completion, as he is moving abroad and wants to give up all ties and responsibilities in the UK.

Vetyver

camptownraces wrote: »

You can't "just" convert a house into two flats without planning permission. If you did do that, and even if the local planning authority never discovered what had happened, you would not be able to sell either flat for at least four years, because no buyer would touch it without a certificate of lawful existing development from the planning authority.

(Apologies OP if it's not "you" who's consdering this option)

I'm not considering it, I'm buying it! The house was converted 9 years ago, so next year I could apply for a certificate of lawful existing development. Meanwhile my mortgage company is happy with the indemnity policy that the vendor has provided in lieu of planning permission.

camptownraces

Vetyver wrote: »

I'm not considering it, I'm buying it! The house was converted 9 years ago, so next year I could apply for a certificate of lawful existing development. Meanwhile my mortgage company is happy with the indemnity policy that the vendor has provided in lieu of planning permission.

Ah - that makes it clearer.

The answer to your original question depends on the size of the outstanding mortgage, and whether selling only part of the property would clear that sum. Vendor probably hasn't disclosed these amounts. Also, to sell part and retain part of the property would entail legal work for vendor to remortgage the remaining part.

How old is the house? A big caution with a conversions, especially conversions of Victorian places. Also, does the conversion meet building regulations? these are for your safety, and long term protection. A thorough survey is needed to ensure that the work been done properly.

Vetyver

camptownraces wrote: »

Ah - that makes it clearer.

The answer to your original question depends on the size of the outstanding mortgage, and whether selling only part of the property would clear that sum. Vendor probably hasn't disclosed these amounts. Also, to sell part and retain part of the property would entail legal work for vendor to remortgage the remaining part.

How old is the house? A big caution with a conversions, especially conversions of Victorian places. Also, does the conversion meet building regulations? these are for your safety, and long term protection. A thorough survey is needed to ensure that the work been done properly.

Oh, I see. No, no idea on exact amounts; only that selling my flat alone will not clear the remainder owed. Crud, guess this means I'm still stuck waiting until they can sort out the other flat...

The house is Edwardian, and my solicitor has been sent Building Reg certification, so it should be safe