House purchase fallen through on completion day...

Tsj90s

Hi all, FTB here. Was in the process of buying my first home. Simultaneous exchange and completion was due today. Everything in place ready to go, and my solicitor was doing his final checks and noticed a clause on the rentcharge on the property (estate charge). It basically says something along the lines of a right of re-entry exercisable on breach of the covenants. (The vendor claims to know nothing about the rentcharge of a mere 8 pounds a year, hes owned for 10 years and not paid it). The vendor took out an immendenity policy a few weeks ago for the lack of payment but this clause has just come to light on completion day. (Dont ask me why, I dont want to think about how this hasnt been noticed sooner). 
Anyway solicitor has basically said that the mortgage provider will probably not lend on this property due to this, hes discussed with the vendors solicitor and has asked for them to contact the rentcharge owner and redeem it and also sought advice from the lender. I'm literally stuck, I know this redemption could take forever, and also that looking for an alternative property could take even longer and leave me quite considerably out of pocket. But the way I see it is it's completely out of my hands, if the mortgage provider withdraws their offer, I'm not willing to apply to another lender for this property. 
Would I be able to choose a new property and ask for my mortgage offer to be transferred to the new property or is it a whole new application? How do you pick yourself up and move on when something like this happens? I have a 5 month old, I had a traumatic birth and various health issues with my baby since birth which obviously hasn't helped my mood and general wellbeing and this feels like the icing on the cake. We currently live with my parents so I'll never be homeless which I should be thankful for but I just wanted a home for us as a family. I'm not sure I could deal with the whole process again! How do you pick yourself up and carry on? 

[Deleted User]

You just celebrate at the fact that exchange and completion were on the same day. Otherwise you'd be paying everyone else a LOT of money.

See what happens with this property. If no one will lend on it (though I'm not sure why you would refuse to find out if anyone would), then you've had a lucky escape and find a new property.

hazyjo

It won't take "forever" to sort. Try not to think the worst. It doesn't sound like it's fallen through to me, just that you don't want to wait.

It will be a new application for another property.

Ask your solicitor how long this is all likely to take.

Sounds like it's maybe not great timing to be moving anyway. Perhaps enjoy your time with your family and look again in a year or so?

One in two or three purchases falls through. It's a shame this has happened on the day you were due to exchange and complete. Absolutely nothing is in stone until exchange sadly. That's if it even has fallen through.

Try to stay positive. I know its hard.

Good luck.

Tsj90s

Deleted_User said:

You just celebrate at the fact that exchange and completion were on the same day. Otherwise you'd be paying everyone else a LOT of money.

See what happens with this property. If no one will lend on it (though I'm not sure why you would refuse to find out if anyone would), then you've had a lucky escape and find a new property.

My solicitor said in the email its very difficult to find a lender that would lend in this position and it's very difficult to secure funds where this type of rentcharge is in place. I just wish this was noticed sooner😪

Tsj90s

hazyjo said:

It won't take "forever" to sort. Try not to think the worst. It doesn't sound like it's fallen through to me, just that you don't want to wait.

It will be a new application for another property.

Ask your solicitor how long this is all likely to take.

Sounds like it's maybe not great timing to be moving anyway. Perhaps enjoy your time with your family and look again in a year or so?

One in two or three purchases falls through. It's a shame this has happened on the day you were due to exchange and complete. Absolutely nothing is in stone until exchange sadly. That's if it even has fallen through.

Try to stay positive. I know its hard.

Good luck.

Thank you, I will ask all the question tomorrow, he just seemed very panicked on the phone this afternoon.. he didnt fill me with much confidence.

I wanted to get the purchase out of the way before I returned to work later this year, plus space is a massive factor. 

Thanks again, I'm hoping this can be resolved and we can move on 🙂

Irishpearce26

Rentcharge will be abolished in 2037 which means you can pay it off in one payment which for you at £8 per year would be £127. Im guessing you would lose a lot more to walk away? Even with the last 10 years outstanding its max £250 which im sure the vendor would pay to get the sale done.

greatcrested

House purchase fallen through on completion day..

No. Fortunately for you the reality is

House purchase fallen through on exchange day..

NibblyPig

Pretty sure someone just coughs up £100 or less for an indemnity and that's that.
I didn't pay the rent charge on my house and the solicitor just said ok we need to pay about £80 for an indemnity policy while selling it, I said put it on the bill, that was the end of it.

Tsj90s

NibblyPig said:

Pretty sure someone just coughs up £100 or less for an indemnity and that's that.
I didn't pay the rent charge on my house and the solicitor just said ok we need to pay about £80 for an indemnity policy while selling it, I said put it on the bill, that was the end of it.

Yes they did do that which previously thought would resolve the issue, however this clause basically throws that out the window as they can re possess the land due to the breach. Apprently it's a different type of charge used to a standard rentcharge

princeofpounds

They can redeem the rent charge for ~16x the annual payment. It will take a few weeks, but it doesn't need to stop anything.

Your mortgage lender may still be ok with it as long as the indemnity is in place, but that will need checking. That could be faster, a couple of weeks perhaps.

Let us know how it goes.

GDB2222

Tsj90s said:

Deleted_User said:

You just celebrate at the fact that exchange and completion were on the same day. Otherwise you'd be paying everyone else a LOT of money.

See what happens with this property. If no one will lend on it (though I'm not sure why you would refuse to find out if anyone would), then you've had a lucky escape and find a new property.

My solicitor said in the email its very difficult to find a lender that would lend in this position and it's very difficult to secure funds where this type of rentcharge is in place. I just wish this was noticed sooner😪

Do NOT try hard to find a new lender. If mainstream lenders won’t lend, you will have enormous trouble selling the property later. It may be a cash buyer only property, sold at a big discount, and you don’t want to be paying full price.

Lucky escape you have had, although the timing could have been better. I hope you are celebrating?