Outstanding charge on plot

GT-R

I'm seeking opinion or information please about a situation that has arisen with a house purchase.


The purchase is in cash, no mortgage, no chain, a tenant moving into a completed and vacant freehold new build.


In the process of going through the searches it has come to light that there is an outstanding charge on the plot registered to a named lender who financed the purchase of the plot in the first instance.


The borrower is the builder (a limited co.) who is selling the property to me, I have advised my solicitor that there needs to be some sort of binding assurance this charge over the plot will cease on completion of the sale. I don't really know what I'm doing in truth.



The money is with the solicitor and I am ready to complete.


What I don't know is what effect, legally, an outstanding charge on the plot could have on me as the buyer of said plot from the builder (borrower).


Am I worrying about something and nothing or is this a very serious matter that needs to be resolved?


I have sight of the registered charge pdf document via companies house which details the terms, conditions and consequences of the charge between lender and borrower. Reading it is heavy going for me as not well versed in legal terms and I still don't know how this charge would affect me as a buyer of said plot.


Is this just normal new build practice and nothing to be concerned about?



My fear is that I complete and then something happens between the builder (borrower) and the name registered on the charge (lender) which then causes the plot I have bought to become fair game.



Is that an unfounded fear?


anything that can shed some light will be very well received. thanks

AdrianC

It's perfectly normal for there to be charges against property during the run-up to a purchase... Every single mortgaged property has a charge placed by the lender.

Yes, it's totally standard for the charge to be removed by the lender during completion - usually by the borrower using your money to redeem the loan.

G_M

Normal pracice.

Around 70% of home owners have mortgages, so they all have Charges registered on their properties. When they come to sell, those Charges need to be removed.

In most cases, the seller can't get them removed before receiving the sale money and paying off the mortgage, so their solicitor gives a 'solicitor's undertaking' that they will pay off the mortgage and get the Charge removed before passing any excess sale money to the seller.


This is no different.

GT-R

That's fine, thanks very much.


It's the vendor's solicitor that needs to provide this undertaking then.


Hopefully everything resolves this week.