Potential for property fraud

blinko

Hi All,

I was hoping to seek some thoughts on the following scenario.

I'm going through a property purchase and the property has been on the market for a while (Jan 15) too long in today's day and age.

I think there is problem with the property not structurally as there are 4 flats within the same building but with the title. I will be using a proper qualified solicitor and surveyor etc.

I'm concerned about the other side using potentially defrauding somehow.

Now it could be simply a distressed seller that has say gone through a divorce and thus the property was unable to be disposed of while assets were being split.

I'm not sure what questions to ask to protect and prevent buying a dodgy flat?

thanks in advance,

B

davidmcn

Not sure from what you've said why you are concerned about fraud. Depending on the type of property and area, on the market since January may be perfectly normal. I would expect your solicitor or surveyor to pick up any signs of fraud.

blinko

Thanks unfortunately I will be approximately £1,000 down in fees by the time the solicitor gets involved (£100-£200 for mortgage booking fee, £500 surveyor and £350 solicitor non refundable engagement fee)

I have downloaded a copy of the land registry and there appear to be a couple of charges against the property and most importantly the lease appears shorter than that which the agent has quoted to me!

Would a new lease extension appear on land registry?

eddddy

I suspect you don't really mean fraud in the legal sense - but perhaps more that there are problems which the vendor and EA haven't told you about.

It's worth asking the EA and vendor questions like "Why has the property been on the market so long?" and "Have there been any other offers which have fallen through?".

You can also ask the vendor lots of informal questions in advance of instructing your solicitor ("What are the neighbours like?", "What's the management co like?","Are any major works planned?) and check online for any planning proposals nearby.

You can't rely on the vendor's answers - you would have to get your solicitor to repeat them as pre-contract enquiries - but you might uncover some issues.

(Obviously, the vendor might lie to you during informal discussions, and realistically you won't have any recourse - but it might be worth trying anyway.)

davidmcn

And you don't need to pay £1000 (or even £350) to get some initial legal advice about the title.

blinko

Thanks Eddy and David, on second thought I think you are right in where my direction of thought was heading. Less towards an actual fraud and more towards there is something not right here.

Yes the EA has been BS'ing me but I'm aware of this so I did ask the questions eg why has it been on the market so long etc but I know that his answers are unreliable and use them only as glancing reference. I feel the only truth he has told is that the vendor is a she (which has been confirmed with the Land Registry Title document I have downloaded)

I have obtained the title register and there is a nice and scary charge

(02.02.2015) RESTRICTION: No disposition of the registered estate,
other than a disposition by the proprietor of any registered charge
registered before the entry of this restriction, is to be registered
without a certificate signed by the applicant for registration or their
conveyancer that written notice of the disposition was given to XXX

Or is this simply the end of the legal proceedings now that the charge has been registered the property is free to be disposed of by the current owner

Land_Registry

blinko - is xxx the Management Company/Residents Assoc/Freeholder perhaps? - if it is then the restriction is quite normal and is simply a means of ensuring that they know that a sale is happening for example.

If xxx is someone else then they presumably have an 'interest' in the title, financial or otherwise, so the seller would deal with that as part of the conveyancing process.

Such a restriction should not imply that the sale is 'not right' although it does imply some additional work may be needed to satisfy the restriction and/or have it removed on sale for example.

ellie27

I am buying a house that has been on the market for over a year.

I have wondered why has it not sold, but it was really overpriced (ridiculous home report valuation!) and over the last year it has dropped in price twice. It has been under offer twice and fell through. We were disappointed when it went under offer the second time as we had just recently viewed it and loved it. 7 days later it was back on the market and we swooped in!

My home went on market mid-August and it was mid-April we sold (in that time we also had a sale fall through and then with winter/christmas the market as dead!) There is absolutely nothing wrong with our house, just unfortunate that after the early sale fell through it looked like it was on the market ages!!

Good luck

blinko

Thanks Land Registry Rep and Ellie, I've dug a little deeper and the charge appears to be applied by the husband. Ironically the estate agent appears to be telling the truth that there was some legal wrangling over the property with some sort of divorce settlement. Who knows but there is definitely a charge over the house from a male sharing the same surname as her.

So do you think before I spend any money on the property I should ask for the charge to be removed from land registry...

Land_Registry

blinko - you should rely on your conveyancer's advice here to understand what is involved

As far as the restriction alone is concerned it is quite clear what is required in so far as notifying xxx of the sale - the restriction's purpose is I suspect to enable xxx and the seller to then resolve any remaining issues around the property/divorce?

As xxx's interest is presumably reliant on the seller selling there will be an order to how things are dealt with and removing the restriction would not happen until much further on in your buying process.

With the majority of such interests the buyer will seek an undertaking from the seller to do what is necessary to have the interest/restriction/charge removed at the appropriate time

blinko

Land_Registry_representative wrote: »

blinko - you should rely on your conveyancer's advice here to understand what is involved

As far as the restriction alone is concerned it is quite clear what is required in so far as notifying xxx of the sale - the restriction's purpose is I suspect to enable xxx and the seller to then resolve any remaining issues around the property/divorce?

As xxx's interest is presumably reliant on the seller selling there will be an order to how things are dealt with and removing the restriction would not happen until much further on in your buying process.

With the majority of such interests the buyer will seek an undertaking from the seller to do what is necessary to have the interest/restriction/charge removed at the appropriate time

Thanks LR, I'm pretty sure what has happened is she tried to sell the property without his knowledge hence he put the notification charge on the property. Is there any way I can protect myself from racking up a legal bill only to find out that he isn't happy to sell.