Previous owner appealing reposession after I've exchanged contracts!

poet123

I don't think you have much redress, until completion a repo can be offered on again, taken off the market, other issues occur. Exchange of contracts is not legally binding.

Straight choice, wait or walk away.

They won't insure the property either, but the bank will be the ones with keys, not the previous "owner". All services will be off and it will have been sold as seen.

If you are not desperate to move I would wait rather than lose survey fees and solicitors fees which will still be payable I am afraid.

jamesd

poet123 wrote: »

until completion a repo can be offered on again, taken off the market, other issues occur. Exchange of contracts is not legally binding.

Really? Got any references for that? Exchange is what creates both a legally binding contract and a practical requirement for the buyer to have insurance for the property.

FirstTimeBuyer99

moneyistooshorttomention wrote: »

Personally, I'm focusing on the fact that you used the word "asked" and not the word "told" or "informed".

If I was "asked" to choose one of two options, then I'd say "I note your request, but I don't wish to grant your REQUEST, so I wont".

If they've TOLD you you MUST choose one of those two options, then you have to do so.

So, is the word "asked" what they actually used? In which case...surely you can refuse the "request".

So "Dear Bank...I note your REQUEST....but I am not prepared to agree with this request. Both options you present are unacceptable to me and I insist the contract we have made is adhered to" (with a hint of a threat to head off to the newspapers if they try to force you into choosing an option).

Thank you. The exact words are (in a fax to my solicitor) 'Please confirm whether your client will agree to....' either rescind or postpone the contract.
My solicitor offered the third option, sueing them for breach of contract but didn't recommend this. They did not tell me that it is an option to try to force them to complete.

jamesd

You're going to need to discuss with your solicitor whether the nature of the pending legal action is one that allows or doesn't allow you to seek specific performance - completing the sale - or not. If a court is barring them from selling then they definitely won't be able to complete and it's unlikely to be their fault.

This is a pretty unusual situation so use care with all replies, including mine, unless Richard Webster or some other actual expert chooses to comment.

However, given your concern about being able to buy later, it seems that your best interest here is to continue with the purchase process and accept a delay, but seek your actual increased costs from the selling lender. Because that exchange does mean that you get that price. Under normal processes a seller who doesn't complete is even liable for the higher purchase price a buyer might have to pay on another property as a result of a failure to complete by the seller.

FirstTimeBuyer99

poet123 wrote: »

I don't think you have much redress, until completion a repo can be offered on again, taken off the market, other issues occur. Exchange of contracts is not legally binding.

Straight choice, wait or walk away.

They won't insure the property either, but the bank will be the ones with keys, not the previous "owner". All services will be off and it will have been sold as seen.

If you are not desperate to move I would wait rather than lose survey fees and solicitors fees which will still be payable I am afraid.

Thank you for your help. This makes me very nervous. I thought the exchange of contracts is legally binding. I was told by my solicitor (because someone also tried to gazump me!) that I'm safe after exchange and that they can't accept any other offers.
Thank you for your advice. It's not the cost or the inconvenience of postponing that concerns me so much as the possibility of waiting another 3 months and still losing the property, by which time -with the London property market going barmy- prices will have rocketed further and I will end up buying a place that's nowhere near as nice. Plus the idea of starting all over again is just too depressing for words!!

jamesd

Barring something really unusual in the contract you are safe and entitled to either the property or the value difference between this and what you have to buy. Getting the money out of them would be the problem.

If they and your solicitor are both confident that they have title and can sell then proceeding with the purchase is an option, assuming any mortgage lender that you're borrowing from will agree - they may not. The selling lender then gets to deal with unwinding things or compensating their customer if they find that the repossession was overturned. But there's a very high chance that your own lender would refuse to provide the money and you'd definitely need to discus with them.

You'll also need to consider the limitations of where you're living now. If you're on a statutory periodic contract and haven't given notice life is easy. If you've given notice you'd need to see whether your landlord is willing to keep you a a tenant for longer, though they will know that if you refused to leave they would not be able to force you out for months because that's how long the process takes to do that.

In theory another option might be to let the place you're buying to you and delay completion. That's an approach that could minimise losses for you if the selling lender is sufficiently confident that they will eventually be able to complete the sale. This has the advantage of avoiding issues with your mortgage lender, since they won't have to advance any money to you while there is uncertainty about how things will proceed.

mystic_trev

poet123 wrote: »

I don't think you have much redress, until completion a repo can be offered on again, taken off the market, other issues occur. Exchange of contracts is not legally binding.

Wrong,Exchange of Contracts are legally binding, otherwise they'd be no point in a Contract.

Thrugelmir

FirstTimeBuyer99 wrote: »

Thank you. The exact words are (in a fax to my solicitor) 'Please confirm whether your client will agree to....' either rescind or postpone the contract.
My solicitor offered the third option, sueing them for breach of contract but didn't recommend this. They did not tell me that it is an option to try to force them to complete.

The lender concerned will decline to complete as there's a pending court case!

jamesd

They may well want to decline to complete but that's what a notice to complete with specific performance request is for... unless there is something that blocks that in this case. I'm more worried about the buyer's lender refusing to advance money, which seems highly likely to happen. The buyer's lender isn't committed until completion.

If the buyer's lender won't agree to advance the money anyway then the buyer can't prudently serve a notice to complete because a notice to complete would make them liable for the seller's costs if they didn't actually manage to complete for some reason. Notice to complete isn't a one way obligation.

Letting or agreement over costs incurred and accepting a delay in completion is likely to be the most practical solution. Say a six month AST on the property being purchased.

Strapped

The vendor (bank) is unable to complete as their ownership of the house is under dispute. IF (and it's a big if) the possession order is set aside in the court case, then the exchange of contracts also becomes worthless, because the vendor never owned the property.

Sadly, I am currently helping a friend fighting repossession - she is filing tomorrow to have a possession order set aside. And sorry for all you people shouting "don't worry, will never happen" - it can, and it does. There are several grounds for it and I suggest that the OP asks the bank for the paperwork from the case to see what grounds the repossessed former owner is claiming. Although I would add, in this case, it seems unusual that the former owner has filed at this point, having already left the property.