Purchasing a new build, now offered to rent until deed can be split

JessJ23425

Hi,

We've been in the process of buying this new build house for 2.5 months now, offer accepted back in July. The last we heard was that as it's 1 plot with 2 new properties on, they needed to get the title deed split.
After quite some delays, today the vendor has told the sales progressor today that the title deed won't be split for 6~ months, and, as we need to leave our current rental imminently, would we be interested in renting the property until that's done, then picking up the sale after 6 months.

For us we're happy to do this, we need to leave our current rental and the rent is being offered at the rate of our mortgage.
My questions are:

- Is 6 months normal to have this done with the title deeds?
- Is it possible to get some guarantee that they will still sell in 6 months?

Thanks in advance

davidmcn

What's your solicitor's advice? I would have thought it normal for the title simply to be split when you register your purchase, not something you need to wait for the developer to do before you can complete.

JessJ23425

Our solicitor is away until Friday sadly.

We understand it's to do with the fact that 2 houses have been built on what is currently recognized as 1 plot and this needs to be split before a sale can progress we're told.

Richard_Webster

You would expect the builder to rpovide a TP1 (transfer of part) which is what all estate developers do.   If there is an estate of 100 houses on a single title that is what is normally done.   The buyer's solicitors register the transfer at the Land Registry who allocate a new title number to the part purchased.   It is not normal practice to obtain separate title numbers in advance for every plot on an estate - so this just doesn't make sense.
I wonder if this perhaps a plannning issue - builder got planning permission to build one house on the plot and has actually built two so he's gotto get retyrospective pallning approval for the change?

JessJ23425

Richard_Webster said:

You would expect the builder to rpovide a TP1 (transfer of part) which is what all estate developers do.   If there is an estate of 100 houses on a single title that is what is normally done.   The buyer's solicitors register the transfer at the Land Registry who allocate a new title number to the part purchased.   It is not normal practice to obtain separate title numbers in advance for every plot on an estate - so this just doesn't make sense.
I wonder if this perhaps a plannning issue - builder got planning permission to build one house on the plot and has actually built two so he's gotto get retyrospective pallning approval for the change?

We were wondering this too but I had a look at the planning permission at the LA and permission was granted a year ago to build 2 semi detached houses, the plot itself is listed as one on the boundaries too so that adds up to me.

I'm just shocked they're saying it's going to take 6 months from here? However I can't see any reason they'd be misleading us. We're thinking we will just go for the rental option and if nothings moved in 6 months we can look for another property, we really want out of our current one (which EA and vendor don't know!)

eddddy

If it's a small builder, my guess would be that it's some kind of dispute between stakeholders in the property - which the builder hopes will be resolved within 6 months. (Or perhaps the builder wants to get the sale into the next tax year.)

As you suggest, perhaps the main risk is that the builder changes their mind about selling it to you, or maybe increases the price during the next 6 months.  In theory, you can have legal agreements to stop that happening - like an option agreement or lock-out agreement - but you'd have to find terms that were acceptable to both you and the builder (plus a chunk of legal fees).

But perhaps the builder is taking the bigger risk. If you move in and rent, then change your mind about buying, the builder could have a hard time getting you out.

You mention that the rent would be the same as your mortgage payments. But mortgage payments are helping to pay off your mortgage - rent payments are 'lost' money, which potentially eats into your deposit. Arguably, you should ask the builder to reduce the selling price to counter the rent you're paying to them.

JessJ23425

eddddy said:

If it's a small builder, my guess would be that it's some kind of dispute between stakeholders in the property - which the builder hopes will be resolved within 6 months. (Or perhaps the builder wants to get the sale into the next tax year.)

But perhaps the builder is taking the bigger risk. If you move in and rent, then change your mind about buying, the builder could have a hard time getting you out.

Thanks, this was my thoughts too - I definitely don't think they're being fully transparent with the reason for the delay but I can't understand why they would push for us to rent until the sale can be completed if they had no intention of going through with it, and that really is the only worry we have.

Will get in touch with the EA tomorrow to see if we can get some more concrete information.
Thanks all

eddddy

JessJ23425 said:..
... but I can't understand why they would push for us to rent until the sale can be completed if they had no intention of going through with it, and that really is the only worry we have.

They may have the intention (or maybe the hope) of going through with it as of today, but things might change over the 6 months.

For example, if house prices increase over that time, they might decide they want an extra £25k. And if you won't pay the extra £25k, they'd want you out so that they can sell it somebody else who will pay it.