Cash loan to a friend,

Candyapple

MrBluesky wrote: »

Thank you for the interesting replies,

Had a chance to chat with my friend and they have explained they were recently contacted by their council and were told their windows and house colour had no planning permission (its a listed building in a conservation area) .
They purchased the property 11 years ago with the said windows and house colour,.it looks like the legal eagles have dropped a clanger,friend tells me they were doing ok with their renovations and on course to finish next month.
They think selling the property with no planning or conservation consent will be a problem to many buyers and put many off unless they drop the price,an estate agent has suggested they reduce the asking price by £50k.
So they need the extra cash to comply with planning permission and conservation rules.I have had a walk around their house and its in excellent condition and currently estimated on zoopla at £750k neighbouring house sold for £825k last month.
Were going to visit a solicitor on Monday re the loan,so should have more info then.

Thank you,again.

Just because an estate agent has suggested they drop the price by £50k doesn't mean that they have to. If your mate is asking you for £18k to do the works, then why not drop the asking price by £18k?

Is your mate's house actually on the market now, as we speak, or did he want to do it up first and then put it up for sale?

Also, if a neighbouring house sold for £825k last month, doesn't mean that your friend's would sell for a similar amount or even in a short space of time. Do you have a Rightmove link to this house?

Mogley

I agree with most on this issue but credit to the OP must be given for keeping this thread updated whilst dealing with a barrage of opinions warning them against the loan. I for one am interested to see how this ends up.


If the OP can afford to gamble £18k for a 6k return then they are going about it in the right way to try and minimise the gamble not paying off. The odds are seriously stacked against them though. Each to their own.

ScorpiondeRooftrouser

Seriously, this is nonsense. The house needs £18K of work to make it worth £50K more? Even if he is telling you the truth and the estate agent is telling him the truth (as he sees it), that's still a massive gamble. Add £10K to the cost of the works and drop £20K off the house price (that's 2.5% of the asking price) and it's not worth doing. Any more than that and you lose money by doing it.

It's an absurd thing to ask anyone. He would just sell the house as is, now, if this were the case.

adindas

MrBluesky wrote: »

Thank you for the advice,

My friend is retired and is unable to get funds from the usual outlets and have maxed out their credit cards.
I also believe there are several charges (apart from a mortgage provider) on their property,so if it went that far i would be low on the pecking list.
Their property is being sold after renovation (they are moving abroad and have a property abroad). friend has told me i will get my £18k back plus £6k when they sell although the £6k incentive is attractive,i have now decided to contact a solicitor when back from my holiday.
If ( when) the solicitor finds excessive charges on their property or any other negative information then i will my back out of the loan.

Thank you for the heads up.

I think you have not got the message here.
Unless you are
- like Ronnie and Reggie or you yourself is a ruthless debt collector, or
- You secure a collateral with the value of much more the value of the debt that could easily be sold, proceeded without the need of a lengthy court order. The example of this is gilts and you are adding the cost of valuation and saving this collateral in the vault of a bank. Then forget about the contract.

The people suggestion here are based on the view that this is an MSE forum as well as numerous previous stories of this kind. But hey it is your money so do you you want to do.

About the solicitor, I hope you are fully aware it is the solicitor interest to pave a way for you to sign a contract as he will get paid for this job. It is not his business if you end up with a bitter relationship or even fight with your friend, chasing a ghost debt with lengthy court procedure.

parking_question_chap

Who do you think they are going to pay back first? The banks who will be charging them money on their loans or an innocent friend?

Furthermore the property sale is not going to be plain sailing by the sounds of it.

They have demonstrated they are not good with money. This will not end well for you op, but it sounds like you are doing it anyway. If you see that money again I will be very surprised.

MrBluesky_2

Just a quick update following our meeting with the solicitor.

The solicitor has been in touch with their planning consultant and it has come to light my friends do not have to change their windows or repaint the entire outside of their house.
The front door needs to be repainted,only.
In brief,the windows and house colour are on a list of approved materials/colour which would have been acceptable in this conservation area during the time of alterations.

The Planning enforcement letter they received is also faulty and cannot be enforced for three reasons possibly four.

So they do not have spend £££'s and no longer need my loan.

I have agreed to provide the legal expense to prove the demand they received is out of scope and no further householder action is required,this is now 99% complete and not expected to cost me more than £650
My friend will repay me the above when they sell but i am not that bothered,just happy to help out friends.
The solicitor will do my friends conveyancing when needed and ensures there will be no problems.

Thank you for your replies,well the sensible ones who would help a friend out.

BrassicWoman

This sounds much safer for you, and I am glad

PeacefulWaters

MrBluesky wrote: »

Thank you for your replies,well the sensible ones who would help a friend out.

Sometimes saying no is far more sensible and far better for a friendship.

I thought that last line of yours was a bit unnecessary.

enthusiasticsaver

So if your solicitor had not got involved your friend would have taken the £18k loan off you and changed windows, doors etc unnecessarily with no guarantee of receiving sufficient in sale proceeds to cover outstanding charges and your proposed loan plus (£6k)?

I think the majority of people on this forum would suggest the sensible thing is not to mix friendship and money. It normally goes very badly wrong.

Well done on updating the thread though as it was interesting how it all turned out.

Murphybear

MrBluesky wrote: »

Thank you for the interesting replies,

Had a chance to chat with my friend and they have explained they were recently contacted by their council and were told their windows and house colour had no planning permission (its a listed building in a conservation area) .
They purchased the property 11 years ago with the said windows and house colour,.it looks like the legal eagles have dropped a clanger,friend tells me they were doing ok with their renovations and on course to finish next month.
They think selling the property with no planning or conservation consent will be a problem to many buyers and put many off unless they drop the price,an estate agent has suggested they reduce the asking price by £50k.
So they need the extra cash to comply with planning permission and conservation rules.I have had a walk around their house and its in excellent condition and currently estimated on zoopla at £750k neighbouring house sold for £825k last month.
Were going to visit a solicitor on Monday re the loan,so should have more info then.

Thank you,again.

It could be sold at auction. If you watch Homes under the Hammer (yes, I know:D) you will see that just about anything will sell and "fixer uppers" are very popular. Run down, falling down, bug ridden, short lease, flying freehold etc, they all sell.