Wow! Have you ever heard of anything like this? Advice please

silvercar

The "seller" may be able to assign the original contract to you.

steampowered

What do you mean "he cannot sell until he has owned the flat for a minimum of 6 months"?

And what do you mean "the seller doesn't even own the property"?

You need to be more specific as to what the legal situation actually is.

This sounds like an "off-plan" property where what your friend is buying is actually a contract with the developer, rather than a property, but your post doesn't make this clear.

The estate agent doesn't have any responsibility here. However I would have thought the buyer's solicitors would have done searches and checks.

If the seller has exchanged but can't complete, you could consider suing him for breach of contract to make him pay your fees.

Mr.Generous

Unless it has gone up in value substantially somehow I don't see what the first buyer hopes to gain, he will have paid two lots of fees, and all associated costs, hassled with lenders maybe, and for what?

I also don't understand the problem with flipping, if someone bought it, gutted it, renovated it and re sold it why is that a problem? If it took them 3 months it's flipping and somehow wrong, if it took 7 months from purchase to completion its good?

Unless its a rising market or you can work very fast its hard to make a profit on a quick refurbishment. You have to find a property selling for about £25k or more LESS than the value it will sell for done up, spend £8k on costs and materials about £1k on legals, £500 on an agent and the rest is for labour and a profit. Trouble is finding one that fits the bill where it doesn't need a new roof or boiler or riddled with damp etc. All these things take time and cost money.

AnotherJoe

Mr.Generous wrote: »

I also don't understand the problem with flipping, if someone bought it, gutted it, renovated it and re sold it why is that a problem? If it took them 3 months it's flipping and somehow wrong, if it took 7 months from purchase to completion its good?

A few years back there was a series of mortgage frauds to do with buying and selling properties in short order. As a usual over reaction to anything, the six month rule was brought in by most lenders since its easier for them to implement one dumb rule than have a set of detailed nuances which might be open to fraud and will be complex (read costly) to implement. How much easier just to say "less than 6 months? No".

Obviously, some "innocent" people get caught in the crossfire when a blanket rule is applied.

There's no actual prohibition in law about the six months, a cash buyer could buy a house from you the day after you bought it.

G_M

I don't understand.

There is nothing to stop an owner from selling within the 1st 6 months.

However, there are difficulties for the buyer in that few mortgage lenders will grant a mortgage within 6 months of the seller's purchase. But that is the buyer's probem, not the seller's. The buyer can pay cash and the seller can sell. The buyer's financial arrangements are not the seller's problem.

So it appears that your mortgage lender has declined your mortgage, and you are the one failing to Complete???

However you also say the seller "doesn't even own the property". That is entirely separate. Obviously no one can sell a property they do not own.

However, if the Completion date for his purchase is earlier than, or the same date as, the Completion date of your purchase from him, then he will own the property when he sells to you.

So what date is he planning to Complete his purchase?
And what date do you plan to Complete your purchase?
And how do you plan to pay?

da_rule

I would also question why this is only coming out now. It is usual practice for your solicitor to investigate the title and check the seller has authority to sell the property prior to exchange. There can be overruns for small, niggling enquiries, but I'd question why your solicitor allowed you to exchange with a party who did not own the property without explaining it.

As G_M said, the seller only needs to own the property on the day they complete with you. But this should have been picked up earlier in the process.

davidmcn

getmore4less wrote: »

Find out who really owns it, they are probably still keen to sell.

They can't sell to someone else while they're in a contract to sell to the middleman. Not clear whether/how long that's enforceable for though.

kinger101 wrote: »

EA should have checked land registry details early on.

Should they? On what basis are they required to do this? As we know from other threads here, title deeds aren't always particularly clear to the layperson, so how far would this duty extend - would the EA need to seek independent legal advice to confirm the extent of the property and the ownership?

davidmcn

steampowered wrote: »

If the seller has exchanged but can't complete, you could consider suing him for breach of contract to make him pay your fees.

G_M wrote: »

it appears that your mortgage lender has declined your mortgage, and you are the one failing to Complete???

The OP doesn't say that the OP's friend's child's partner's mate down the pub (or whoever the hell it is who actually has this problem) has exchanged - I presume their solicitor would have checked the period of ownership before allowing that to happen (given that the six month rule is a standard CML Handbook requirement of the main lenders).

AnotherJoe

G_M wrote: »

I don't understand.

There is nothing to stop an owner from selling within the 1st 6 months.

However, there are difficulties for the buyer in that few mortgage lenders will grant a mortgage within 6 months of the seller's purchase. But that is the buyer's probem, not the seller's. The buyer can pay cash and the seller can sell. The buyer's financial arrangements are not the seller's problem.

So it appears that your mortgage lender has declined your mortgage, and you are the one failing to Complete???

However you also say the seller "doesn't even own the property". That is entirely separate. Obviously no one can sell a property they do not own.

However, if the Completion date for his purchase is earlier than, or the same date as, the Completion date of your purchase from him, then he will own the property when he sells to you.

So what date is he planning to Complete his purchase?
And what date do you plan to Complete your purchase?
And how do you plan to pay?

G_M, the OP is not involved, its their friends daughter so its already two steps removed before it got here!

So the OP wont know any of the answers to your questions, and in any case there will be a lot of half truths and most likely incorrect statements in the OP. Even as posted it makes no sense. In one sentence they dont own it in the next they cant sell it for six months - how can they ever sell it if they dont own it?

Chinese whispers going on here.

da_rule

Even though we are playing Chinese whispers what G_M says is completely on point, assuming that the friends of the OP are buying with a mortgage.

Most mortgage companies will not lend if the transaction is a sub-sale (owned for less than 6 months), or a back to back sale.

What the seller is doing is completely legal (they maybe should have made it clearer) and the estate agent should probably have asked "do you actually own the property?" before putting it on the market.