Documents regarding selling property

Plumbder

When originally buying a property we bought it on a special offer from barratt homes, my ex and I then split and when looking at selling the property prices wouldn't cover the mortgage plus what we owed barratts. Two years ago we contacted them about how the valuations do not cover both costs and have two letters from their finance director stating our first priority to pay is the mortgage and then any money left over (if any) we pay to them. We are 10 weeks into the sale of our property (after nearly two years on market) our solicitors contacted barratt to clarify the situation and they have responded stating they have changed policy since then and we now have to pay them the money.
Just wondering where we stand, can they just change their mind like this when we have two letters stating others wise and hAve received no information of changes since then?
Thanks

G_M

Have Barrats got a Charge registered on the property with the Land Registry?

If so, which is the first Charge- the mortgage or the Barrats debt?

Or is this just an unsecured debt to Barrats?

No buyer will Exchange/Complete unless you pay off the Charges.

If the debt is unsecured (not a Charge registered at LR), then you can sell without paying it off, but you will still owe it.

sarahlou10

G_M wrote: »

Have Barrats got a Charge registered on the property with the Land Registry?

If so, which is the first Charge- the mortgage or the Barrats debt?

Or is this just an unsecured debt to Barrats?

No buyer will Exchange/Complete unless you pay off the Charges.

If the debt is unsecured (not a Charge registered at LR), then you can sell without paying it off, but you will still owe it.

This is plumbder but for some reason it won't let me log in as that. I'm not sure if its registered with land registry to be honest how could I find this out? But I know the first charge is classed as the mortgage

tealady

Hi If you go onto the land registry website you can download the register for a small fee (about a fiver I think - the fees are clearly marked). That will show you charges on the property. Its a quick and simple process to do.

G_M

tealady wrote: »

Hi If you go onto the land registry website you can download the register for a small fee (about a fiver I think - the fees are clearly marked). That will show you charges on the property. Its a quick and simple process to do.

£3 here....

If it is a flat, or leasehold house, you need the Leasehold Title.

Otherwise you need the Freehold Title.

Then look at section 3 "Charges Register".

sarahlou10

I've just had a look through the documents I already have for land registry and can't find anything about a second charge on there

G_M

Then there is nothing stopping you from selling providing you payoff the (mortage) charge.

Whether you will still owe Barrets depends on the terms of the 'special offer'.

Was it some kind of guarantee about the property value (ie that if you sell for less than mortgage plus barret debt they write it off?)

kingstreet

Was this a shared equity purchase?

If it was, there should be a second charge over the property.

What Barratt told you may actually be true, but not particularly helpful. Your mortgage lender holds a first charge and it has priority in getting its money back in the event of a sale or repossession.

As a second charge holder, Barratt is entitled to any remaining monies from the sale towards the discharge of its debt, but you would then have to find a way to settle the remainder. Barratt can refuse to release its charge, preventing the sale, if you do not reach agreement on how the shortfall will be repaid.

It's worth bearing in mind, unlike the mortgage, shared equity works on a percentage of the value of the property, not on an absolute cash value. Therefore, if you had a 10% equity loan, you now owe them 10% of the sale price of the property, not 10% of the original purchase price. If the property value has fallen, so has the amount you have to pay back.

I suggest obtaining professional advice from the solicitor you have appointed to handle the sale, otherwise this could rapidly fall apart if not tackled promptly.

sarahlou10

The original offer was we get a mortgage for 75% and barratts "loan" us the 25% although it wasn't a loan it just ment at the time they take less for the property then either when we sell or in 10yrs we pay back 25% of current value. Me and my now ex split and for two years had to share the property as neither of us could afford it alone and valuations were two low. Then I contacted barratts explained situation and asked if anything we could do, they sent back two letters explaining first priority was to pay mortgage and then any money remaining if any would go to them so we put it up for sale as this was such a great life line, been on market nearly two years (so 4 yrs on I still share with my ex very awkward) and we are 10 weeks into the sale my solicitors have been trying to contact them for 4 weeks then finally got an answer yesterday which was that their policy has changed and that we have to pay that money

sarahlou10

And my solicitors don't seem to think much of this and aren't fighting my corner so I have a relative getting in contact with his solicitor friend for me

tim123456789

sarahlou10 wrote: »

The original offer was we get a mortgage for 75% and barratts "loan" us the 25% although it wasn't a loan it just ment at the time they take less for the property then either when we sell or in 10yrs we pay back 25% of current value. Me and my now ex split and for two years had to share the property as neither of us could afford it alone and valuations were two low. Then I contacted barratts explained situation and asked if anything we could do, they sent back two letters explaining first priority was to pay mortgage and then any money remaining if any would go to them so we put it up for sale as this was such a great life line, been on market nearly two years (so 4 yrs on I still share with my ex very awkward) and we are 10 weeks into the sale my solicitors have been trying to contact them for 4 weeks then finally got an answer yesterday which was that their policy has changed and that we have to pay that money

They can't change their "policy" and have it affect a contract retrospectively

Whatever the deal was when you bought still stands

So what was that deal?

Please don't tell me that you agreed to a loan of (say) 50 grand with no paperwork?

tim