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Option agreement when property mortgaged
oz0707
Posts: 914 Forumite
Two part question here. Background- have agreed an amount to buy a piece of ground for subject to planning. We have 2 prices depending on if permission is granted for 1/2 dwellings.
Firstly is it wise to get my regular conveyancer to draw this up or are the online templates the exact same? Keep in mind 2 prices and 2 scenarios
Secondly I understand this agreement should be registered with land registry. Is this 100% nessecary or is it to prevent it being sold underneath me? As I understand the agreement would need me to sue other party if they breached anyway. Also the property has a mortgage on at present. What is to say they would agree to split title for our agreed price? Although the agreed amount would probably clear 75% or mortgage balance and leave them with around 40k mortgage on property that would still value at 240k+
Firstly is it wise to get my regular conveyancer to draw this up or are the online templates the exact same? Keep in mind 2 prices and 2 scenarios
Secondly I understand this agreement should be registered with land registry. Is this 100% nessecary or is it to prevent it being sold underneath me? As I understand the agreement would need me to sue other party if they breached anyway. Also the property has a mortgage on at present. What is to say they would agree to split title for our agreed price? Although the agreed amount would probably clear 75% or mortgage balance and leave them with around 40k mortgage on property that would still value at 240k+
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Comments
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Ps thanks in advance for all replies0
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These types of option agreements are usually very long and complex - I would have thought that both parties would want to take advice from a suitably experienced specialist solicitor, rather than a general conveyancing solicitor.
Regarding the seller's mortgage - would the seller be selling the entire property to you, or just part of it?
If it's just part of their property, the seller would be mad to sign an option agreement without their lender's consent/involvement.
The lender might refuse to allow the relevant part of the property to be released - then the seller would be in breach of contract.0
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