mortgage overage problems...

ryanha

HI everyone, I was hoping for some advice on a mortgage problem with overage as we're pretty stuck and feel like we're being help to ransom and are racking up solicitors fees.

Our situation is:

We purchased a house which had an overage which stated that if we ever get planning permission we have to pay one of the previous owners £50k for each additional dwelling created. We knew this when we purchased it and this was accepted. We then got planning, created an additional dwelling and paid the £50k. Everyone was happy. Subsequently we tried to get a mortgage on our house on the site (as we didn't have one) and we passed all of the mortgage checks and survey but then the bank (Santander) pulled out of the offer due to the Overage clause which ultimately means no changes/charges can be made to the deed without agreement from the previous owners solicotor approving them (i'm assuming this was a safeguard for them to know if additional planning has been granted on the site and therfore another payment was required). What this has done is stopped all of the top 5 lenders lending on this property as they are not happy with this clause.

What in hindsite should have happened (I believe) was when we paid the £50k we should have requested that the clause is removed as there is no more development opportunity on the site and we wouldn't be in this position.

Having spoken to the top 10 lenders none are happy to lend on this so we can not raise any finance, which is much needed to a) finish the project and b) the second property we created can not be sold to anyone needing a mortgage as we know they wont lend on it. So this puts us in an increadably difficult situation with two properties we cant sell/finance and mounting debts.

We are in the process of taking our solicitor who we purchased through to the legal ombudsmad as they didn't make us aware of this scenario when we purchased the property (despite there being emails internally discussing this) that were never passed to us but that doesn't help our scenario now.

We have contacted their solicitor and offered £500 per property to buy the clause out but this was rejected and the reply simply stated we had to significantly increase our offer. This tool 7 weeks to get this reply and we have to cover our solicitors and their solicitors costs. So to get this response cost us about £400.

So my question is, can this clause be used in the way, as this was never the true intention for this clause, more just a by product of the scenario and 100% feels were being help to ransom for an unknown number they won't tell us unless we continue to pay £400 per letter/response.

Any help would be greatly appreciated as we cannot continue like this.

Thrugelmir

ryanha wrote: »

What in hindsite should have happened (I believe) was when we paid the £50k we should have requested that the clause is removed as there is no more development opportunity on the site and we wouldn't be in this position.

In your post you refer to a second property. Isn't the overage payable on this to.

ryanha

HI, if we added additional dwellings yes but there is no further potential for development at all on either site. As stated by the council planning and the makeup of the site.

Mortgage_Adviser

I guess the most sensible thing for you now would be to see if you get any luck with your Ombudman complaint as if they rule in your favour may tell the solicitors to cover the costs of getting rid of the clause.

ryanha

Hi yes, I agree but the ombudsman process will take a minimum of another 6 months, by which time we won't be able to afford to stay here without getting a mortgage so we will have to sell both at a discount to someone who doesn't need a mortgage.

TomCollier

Hello ryanha,

There's an intermediary (broker) only lender called 'Together Money'. They can consider overage clauses on properties. I was just on the phone to them and noticed your post so thought I would ask them. It's a new one on me however I have previously used Together for cases with issues on title deeds such as section 106 clauses and they have been ok subject to circumstance. The case you have presented sounds perfectly reasonable to me, especially considering there's no scope to develope again.

Together Money and other specialist lenders will only be available via mortgage brokers so you will need to arrange this via a broker, ideally a whole of market broker.

Hope this is useful!
Tom

Mortgage_Adviser

So, what is the currentr set up? Two residential stand alone dwellings on one title?

ryanha

No, we split the original title, created the additional dwelling, paid the overage and then tried to put a mortgage on our property whilst planning to sell the second one we created.

ryanha

Thanks Tom, we have looked into other lenders who offer this but the rates are considerably higher than our Santander offer. Over the term of the mortgage the amount is huge and we feel the clause needs removal/amendment in the short term. However your suggestion could work short term until its fixed.