Seller restrictions

Legacy_user

Hello all,

Currently purchasing an auction property. 14 day completion. Buying cash.

Seller’s solicitors have a restriction whereby the purchaser cannot sell/ remortgage the property for minimum four months.

I understand why, and also that many lenders won’t lend in the first six months anyway, but wondered if any had encountered this, or got around this, and if so how?

My solicitor has asked for consent to sell/ remortgage within the period from the sellers and is awaiting reply. I understand they may allow and there may be a fee.

What are others’ experiences of this.

Regards,

PasturesNew

You'd not sell in four months in any case (except in exceptional/unusual circumstances)...

You're paying cash ...

So what's the problem?

Slithery

The vendors can put that in the contract if they wish, when it comes to auction properties nearly anything goes.


You either agree to their terms or don't buy the property.

G_M

ritfor wrote: »

Hello all,

Currently purchasing an auction property. 14 day completion. Buying cash.

So you have bid and won? Or just considering this at a future auction?

System

I have bid and won, and am buying with full knowledge of the restrictions.

I will refurb and either let/ sell.

This usually takes approx four months. I’m just thinking that if the stars align and my tradesmen get a good run at it and finish the work quickly, plus my mortgage broker and lender knows this is a blueprint of previous lets, I may well be ready sooner. Just don’t want to be sat on my hands for too long before I can get my money back out.

Hope that helps.

davidmcn

Never heard of it before. I expect you will be able to figure out for yourself how much it might be worth offering (if and when the time comes) to discharge the condition.

PasturesNew

So, if you got the work done super fast you'd be marketing it, not selling it.



Does the contract disallow marketing?

System

Focusing on letting. I would let it within four months if allowed.

borkid

ritfor wrote: »

I have bid and won, and am buying with full knowledge of the restrictions.

I will refurb and either let/ sell.

This usually takes approx four months. I’m just thinking that if the stars align and my tradesmen get a good run at it and finish the work quickly, plus my mortgage broker and lender knows this is a blueprint of previous lets, I may well be ready sooner. Just don’t want to be sat on my hands for too long before I can get my money back out.

Hope that helps.

I might be a bit dumb here but how can you be buying for cash if you need a mortgage?



Do you mean you have no chain?

System

Here is the wording from panel 12 of the TR2

12.1 In this transfer if the Transferee comprises two or more persons then any covenants given by the Transferee shall be joint and several.
12.2 The Transferee hereby agrees to serve notice on the Transferors solicitors in the event of their transferring the Property within four months of the date hereof such notice specifying the price the Transferees name and address and details of any agents involved in the transfer of the property
12.3 The Transferor and the Transferee apply to the Chief Land Registrar for the registration of a Restriction in the following terms:-
Until , no disposition of the registered estate (other than a charge) by the proprietor of the registered estate is to be registered without a certificate signed by Mortgage Express of Croft Road Crossflats Bingley West Yorkshire BD16 2UA or their conveyancer that the provisions of clause 12.2 of the Transfer dated and made between Mortgage Express (1) and have been complied with.

Now, how does the seller - Mortgage express benefit from this restriction?

davidmcn

ritfor wrote: »

Now, how does the seller - Mortgage express benefit from this restriction?

It gives them some protection against their borrower claiming that they've sold at undervalue (i.e. if the property is resold immediately after completion).