Help my friend - I've NEVER heard of this before, is it legal?

micky007

No

Hi,

Just to clear a few things up:

1 - Yes im lending them cash for the deposit and im not charging them any interest nor do i care how long it takes them to give it me back if at all.
2 - Yes they can afford their own place, they've been renting for many years and the monthly mortgage repayments are actually cheaper then what they are paying in rent.
3 - The money was given to my friends mother who put it straight into her bank account. It is legal for blood relatives to transfer money to them as a gift for the mortgage.
4 - Its not a flat or appartment they are buying, its a house.

Update: my friend just rang me after speaking with the solicitors and there going to ring the current owner and ask them if they've ever had any inspections. Their solicitor also stated that its very common to have those restrictions when purchasing a property with a lease hold. I mean iv purchased a new build property this year and dont have anything like thise restrictions.

AdrianC

micky007 wrote: »

1 - Yes im borrowing them cash for the deposit

<grits teeth>
No, you are not.

They are borrowing money from you.
You are lending them money.

AnotherJoe

No

Its "lending" them the money for goodness sake !! Your friends are borrowing it, you are lending it.

So, when the solicitor asks them for the source of the money, your friends will be committing mortgage fraud by stating its their money as a gift from a relative then? Or have they already done this? If you dont care whether they pay it back why didn't you just give it to them in the first place?

If you thought it was illegal to give someone money if you arent a relative you are wrong, and if you thought the fact it was a relative meant it didn't matter if it was a loan, you were wrong. The fact there is a money trail between you a relative and them makes it look even dodgier than it is. If it comes to light, your friends can forget getting a mortgage for a long time.

As for the rest of it, whatever the owner of the lease may or may not do regards inspections in practice, and whatever happened regards the current owner being inspected, there's no way in a million years I'd ever buy anything that had such a clause, both because of what might happen to me regarding inspections, and what any sane future buyer would make of such a clause..

Guest101

micky007 wrote: »

Hi,

My best friend is buying a house and I've borrowed - lent* them the cash to pay for the deposit to help them buy their own place. They have been really excited after putting in an offer and it being accepted, today they went to the solicitors to sign the contract and just before they signed they was told a few restirctions that was on the leasehold - restrictions placed by who? . Now this is shocking and really need some advice as i want to help them out. Heres just a few restrictions that i have NEVER seen/heard of before and question if its even legal:

1. There has to be an inspection by the leaseholder- do you mean freeholder? your friend is the leaseholder. every year who MUST be able to enter the property, if they dont like the look of anything they then can tell the OWNER of the property to decorate and have it completed within a certain time frame. - Exact wording please.
2. There has to be an inspection of the gardens by the leaseholder do you mean freeholder? your friend is the leaseholder. every year, if they dont like the look of the garden or somthing they they can tell the OWNER of the property to make changes to it and have it completed within a certain time frame. - Exact wording please.
3. There cant be a sky satellite at the front of the house or the side of the house. - Quite common
4. Only cars are allowed, even on the drive, no vans. - quite common

There are a few other weird and not right restrictions in place but the first 2 are the most weird and alarming restrictions. Can someone tell me if that is even legal? - perfectly


I just dont understand what gives the right for the leaseholder - freeholder, otherwise it makes no sense (hence exact wording) to come into your house and tell you what something needs to be decorated because its not to their taste etc.. - because it's a lease. It just doesnt seem right at all. My friend call me at 10pm as both him and his wife was panicing and didnt know what to do. I've told them to ring their solicitor first thing in the morning and tell them not to process the signed contract just yet whilst they think this over. - that's sensible.


I've told them if im being totally honest dont buy it, as they would technically just become a tenant - a tenant owns a lease, they own a lease, it's the same thing if you buy a leasehold property in their own home being told to make changes etc... and not only that if they come to sell the property then they will struggle to sell it due to these restrictions. They are first time buyers and obvisouly very excited but are now worrying after processing the restirctions, one thing im a bit annoyed of is their solicitor, they went in all excited as they was told they are ready to sign the contracts, just before they signed their solicitor then told them about the restrictions which i feel is very unprofessional - should he have told them after they signed? , as why was this the first time they was only being told this. Obviously not fully on planet earth with them being excited on signing the contracts they signed the contract still and are now worrying/regretting it after what they was told has sunk in - well then don't exchange. . Their solicitor is supposed to be their client - no, they are the solicitors client. (which is why terminology is vitally important) and looking after them, however i feel the solicitor has neglected them and hasnt done their job properly and just want the house completed so they can be paid - They'll be paid regardless. As knowing they are first time buyers and obviously going to be excited when told to come to their office to sign the contracts i feel the solicitors have miss-sold them the property - WHAT?! your joking! and have shown negligence in their duty to look after their client. As surely they should of been told that information in advance to process it/go through it, not being told a few mins before they sign?


Anyway iv told them to make sure they ring the solicitors first thing in the morning and tell them not to process the contrat just yet. I'm going to show this post to my friends so please guys if you can give any sort of advice and also let me know how you would feel if you was in this position, would you buy the house? what would you think?

I want to try and give them as much information as possible before going through wit the house which myself personally feel its not a good idea to do.


Thank you everyone in advance!

Look


1: exact wording
2: who does the covenant relate to (typically it's the developer, who actually wont care)
3: theyre buying a leasehold, so they own a lease, not a property.

marksoton

micky007 wrote: »

Hi,

Just to clear a few things up:

1 - Yes im lending them cash for the deposit and im not charging them any interest nor do i care how long it takes them to give it me back if at all. No you're not. And more fool you.
2 - Yes they can afford their own place, they've been renting for many years and the monthly mortgage repayments are actually cheaper then what they are paying in rent. Home owning has costs above renting
3 - The money was given to my friends mother who put it straight into her bank account. It is legal for blood relatives to transfer money to them as a gift for the mortgage. Is that via your friends mothers goldfish's owners dog?
4 - Its not a flat or appartment they are buying, its a house.
What's your point?
Update: my friend just rang me after speaking with the solicitors and there going to ring the current owner and ask them if they've ever had any inspections. Their solicitor also stated that its very common to have those restrictions when purchasing a property with a lease hold. I mean iv purchased a new build property this year and dont have anything like thise restrictions.

I highly doubt you've ever purchased property.

Guest101

micky007 wrote: »

Hi,

Just to clear a few things up:

1 - Yes im lending them cash for the deposit and im not charging them any interest nor do i care how long it takes them to give it me back if at all.
2 - Yes they can afford their own place, they've been renting for many years and the monthly mortgage repayments are actually cheaper then what they are paying in rent.
3 - The money was given to my friends mother who put it straight into her bank account. It is legal for blood relatives to transfer money to them as a gift for the mortgage. - Where the .... are you reading this nonsense. it's legal for anyone to gift them the money.
4 - Its not a flat or appartment they are buying, its a house. - It's a lease theyre buying!

Update: my friend just rang me after speaking with the solicitors and there going to ring the current owner and ask them if they've ever had any inspections. Their solicitor also stated that its very common to have those restrictions when purchasing a property with a lease hold. I mean iv purchased a new build property this year and dont have anything like thise restrictions.

did you perhaps buy freehold?

davidmcn

Guest101 wrote: »

did you perhaps buy freehold?

Even if it was a freehold property, as a newbuild it probably came with similar conditions about satellite dishes, use of driveway, keeping it properly maintained, etc.

Guest101

davidmcn wrote: »

Even if it was a freehold property, as a newbuild it probably came with similar conditions about satellite dishes, use of driveway, keeping it properly maintained, etc.

Yes that's possible, though not always the case.

fairy_lights

micky007 wrote: »

3 - The money was given to my friends mother who put it straight into her bank account. It is legal for blood relatives to transfer money to them as a gift for the mortgage.

What??
Why are you giving it to them via their mother, why is she being involved at all?
Is this a gift or a loan?

PasturesNew

1&2 are most likely to be an issue with lower earners, or people whose situation changes. While they've got enough money to maintain the house and garden, nobody will ask for the inspection - I suspect it's there in case it falls into disrepair (which could be due to loss of earnings/income, or becoming unable/elderly).

That's when it becomes a problem and when somebody might knock on the door and say "You live like a pig, I want to inspect".

It's a form of gentrification. "We're all terribly nice here and we'll NOT sit and be unable to force you to do something if/when you start to let the side down".