Second charge on property to a deceased friend

springmagpie

                                 

getmore4less

What records are there that prove the debt has been repaid?

The executors of the friends estate may not have known about the debt so would never have investigated or  included it in the administration. 

£12k, 20% interest compounded 30 years is going to be a shock and probably more than the property is worth.

Sea_Shell

Are there any "statute barred" timescales with regards money owed TO and estate, rather than BY an estate?

If the money's owed to the estate have not been followed up and the estate is now wound up, can the money still be pursued?

Without any proof of repayments, it's going to be almost impossible to calculate what is owing, if it is still owed.


Have you tried punching the numbers into a compound interest calculator?

Sea_Shell

£12,000 at 20% interest, over 30 years comes to...


£4,600,000 give or take a few £££

Assuming no repayments ever made (documented).

Sea_Shell

springmagpie said:

Not sure he has a spare £4.6 mil laying around! 
Does this mean he will lose his house??

I honestly don't know.

I would have thought it depends on two things.   

Is there ANY proof of any repayments over the years?

If the charge is still enforcible, 7 years after the death of the lender?

Sea_Shell

Just notice you've said 2nd charge...is there also a mortgage lender in the mix too?

In what format had the agreement been drawn up?.   Signed by both?  Witnessed?

getmore4less

springmagpie said:

Very little records, they aren't the record keeping types. It was all done in cash, and cars!
Yeah that's what we are fearing. My uncle certainly won't have understood the interest terms.

Organised enough at the time to get the charge put on so there were some records.
Any more details on the terms of the debt.

Sea_Shell

getmore4less said:

springmagpie said:

Very little records, they aren't the record keeping types. It was all done in cash, and cars!
Yeah that's what we are fearing. My uncle certainly won't have understood the interest terms.

Organised enough at the time to get the charge put on so there were some records.
Any more details on the terms of the debt.

Maybe the friend was the canny one!  Protecting their position @ 20% interest!!!

It would be in his interest to NOT have received any repayments!!   

Sea_Shell

From what I can see.  In normal circumstances, the friend should have completed form DS1 which is submitted to land registry, confirming discharge of the loan.   The charge can then be removed.

Obviously this can't now be done.   His executor could probably have completed this form on the deceased behalf, but that would alert them to the existence of the loan and could open a whole can of worms.

It could, if enforceable, result in IHT being due on the friends estate!!

I think your Uncle is going to have to see a solicitor.


Please keep us updated as to what happens, as this is a pretty unique situation...but may become more of an issue for others as more people put private charges on properties for monies lent.

Good luck.

Land_Registry

The charge forms part of the deceased’s estate. You will need the deceased’s executors, as named in probate, to discharge it. So you have no choice but to approach the family but worth checking to see if probate was granted. If it was then at least you know who to contact. 

In the circumstances as explained you might wish to consider getting a solicitor to make contact depending on what level of contact/ relationship you have with the family/executor.  At the very least it’s worth chatting it through with a solicitor 

xylophone

We can go back and get bank statements to show the cash withdrawals and show the transfer for cars from my uncle to his friend.

Much better than nothing!