shortfall in house sale and a restriction

besswales

We have had an offer on our house and intend renting privately. Not the price we had hoped for but needs must.
There is enough to pay off the mortgage and a secured loan but a shortfall of £3000 on a restriction my husband received a while back.What happens now? We were hoping to pay £100 a month off this. If they block the sale the house gets repossessed and we will end up owing a lot more.can't phone solicitor until Monday so its going to be a worrying week-end.

rizla_king

A restriction does not not prevent you selling. You just have to give notice to the folder of the restriction that is all. Even many solicitors get it wrong and think a restriction can block a sale.

https://forums.moneysavingexpert.com/discussion/1839539

besswales

thanks very much will have a look at the link now. was worried because we had mail today from our solicitor with the restriction info attached and the companies bank details asking for the payment before they lift the restriction

rizla_king

Good, because as said, even most solicitors seem to get this wrong. You have to give notice to the holder that there is a sale, not payment.

Land Registry posts on that thread.

eggbox

The Restriction holders have no legal power to block the sale and, as rizla king states, the terms of the Restriction (which is usuallly only that notification has been given that a sale is proceeding) is all that is required to remove the Restrictions.


But as rizla king also states there a lot of solicitors who don't understand this and you will, usually, get resistance from the BUYERS solicitor who will say they want the Restrictions removed.


The Restriction holder is also only entitled to any equity left from your HUSBAND'S share and NOT yours (of which your Husband has no legal obligation to pay at the time of the sale)


There is also nothing stopping you from voluntarily handing back the keys to the mortgage lender as, without any property, your creditors will become less interested in you. You already have CCJ's so there is nothing further they can do.

besswales

thanks very much . we are willing to pay this debt but as i've said we can only afford 100 a month so hoping this will be enough to satisfy them until we can afford more. we don't want it hanging over us longer than necessary.

eggbox

I think if you explain to them that you understand the Restriction will be overreached (as the buyers interests take priority) and will therefore be removed by the Land Registry when you sell the house (ie; they will get nothing); you may find they may well be, shall we say, more responsive to a Full and Final settlement offer for a lot less than you owe.

CKhalvashi

eggbox wrote: »

I think if you explain to them that you understand the Restriction will be overreached (as the buyers interests take priority) and will therefore be removed by the Land Registry when you sell the house (ie; they will get nothing); you may find they may well be, shall we say, more responsive to a Full and Final settlement offer for a lot less than you owe.

This would be my first thought, too.

It may be worth offering what is left between them, and seeing how you get on.

JasmineStocks

Hi Besswales, my mum was in the same position with an £8,000 shortfall. I wrote to the restriction owners' solicitors and sent them the draft financial statement from our conveyancer to show there wasn't enough money. They wrote saying that they would settle for what was left so in effect they wiped out the £8,000 shortfall. I don't know if it was different to your case because my step dad (the restriction was in his name) had died and had no other assets but it might be worth trying to negotiate. I wouldn't leave it to the conveyancer to sort out as they are generally useless. Good luck.

besswales

morning all--have spent the morning getting no-where being passed backwards and forwards from one solicitor to the other. All saying that the sale will be blocked by the buyers solicitor or the firm who has the restriction. very much as expected after reading the advice given on this thread. will not be giving up and will keep on trying watch this space!!

eggbox

besswales

As I explained to JasmineStocks, just explain to the Restriction holder that if they don't agree to remove their Restriction for the sale to proceed you will be handing back the keys to the mortgage lender for voluntary repossesion.

Then explain if that happens that their Restriction will automatically be removed under the power of sale the mortgage lender will have anyway. So they have a choice of your partners remaining equity or nothing.