Could your transaction be voided if you buy a property previously bought undervalue?

portway72

Thrugelmir said:

An administrator or liquidator has the power to apply to apply for a court order that would reverse the transaction, so restoring the situation to what it was if the sale or transfer had not taken place. That's written into Insolvency Law to stop the sale/transfer of company assets at under value. . 

Reply from vendor solicitor;
Further, if a  transaction at an undervalue has been disposed of at an undervalue to the detriment of creditors.  (or HMRC) Under Sections 339 to 342 Insolvency Act 1986 a transaction at an undervalue can be set aside by the Court if action is taken within two years of the bankruptcy being presented to the Court.    The risk is that if there is a transaction at an undervalue a Trustee in bankruptcy may apply to a court to have the transaction by a bankrupt made void.   In respect of your final point we do not consider relevant the funds were provided by company B

portway72

saajan_12 said:

I had something similar (except not at auction and with people not companies) and maybe you can try something similar
* Ask your vendor to write a statement of fact, stating they were gifted the property, name / address of the gifter
* Perform a bankruptcy / solvency search on the gifter
* Purchase indemnity insurance covering the value of the property, (that in the event that the gifter is insolvent and creditors claw back the property, you're paid out the value from the insurance)

Cost if the insurance came out ~0.1% of the purchase price. 

Because this Auction purchase and i am already in a binding contract the seller solicitors not responding quick, we have already ask your points but no response so i cant get indemnity.

portway72

portway72 said:

SaucySecrets said:

What’s your connection with company A? That’s the vital bit. 

No connection at all with company A

No connection with company A or B,  i have purchased from Auction 

Billy_B_North

It’s very likely that the property was given away to defraud people to whom company A owed money, and that company B is owned by the same (or a related) person.
You need proper legal advice here. There are other forms of transaction where the buyer ends up out of pocket (such as buying a stolen car) but I’ve no idea if the same can happen here.
Was this transfer revealed ahead of the auction? If not I’d be looking to see if it allows you to back out.

portway72

Billy_B_North said:

It’s very likely that the property was given away to defraud people to whom company A owed money, and that company B is owned by the same (or a related) person.
You need proper legal advice here. There are other forms of transaction where the buyer ends up out of pocket (such as buying a stolen car) but I’ve no idea if the same can happen here.
Was this transfer revealed ahead of the auction? If not I’d be looking to see if it allows you to back out.

Thank you, No it wasnt reveald in the auction, auction people said take leagal advise by your solicitors

portway72

portway72 said:

Billy_B_North said:

It’s very likely that the property was given away to defraud people to whom company A owed money, and that company B is owned by the same (or a related) person.
You need proper legal advice here. There are other forms of transaction where the buyer ends up out of pocket (such as buying a stolen car) but I’ve no idea if the same can happen here.
Was this transfer revealed ahead of the auction? If not I’d be looking to see if it allows you to back out.

Thank you, No it wasnt reveald in the auction, auction people said take leagal advise by your solicitors

sorry Billy, company B is not owned by same people

Billy_B_North

portway72 said:

portway72 said:

Billy_B_North said:

It’s very likely that the property was given away to defraud people to whom company A owed money, and that company B is owned by the same (or a related) person.
You need proper legal advice here. There are other forms of transaction where the buyer ends up out of pocket (such as buying a stolen car) but I’ve no idea if the same can happen here.
Was this transfer revealed ahead of the auction? If not I’d be looking to see if it allows you to back out.

Thank you, No it wasnt reveald in the auction, auction people said take leagal advise by your solicitors

sorry Billy, company B is not owned by same people

That’s very strange then. Why would a company simply give away a valuable asset?

portway72

Billy_B_North said:

portway72 said:

portway72 said:

Billy_B_North said:

It’s very likely that the property was given away to defraud people to whom company A owed money, and that company B is owned by the same (or a related) person.
You need proper legal advice here. There are other forms of transaction where the buyer ends up out of pocket (such as buying a stolen car) but I’ve no idea if the same can happen here.
Was this transfer revealed ahead of the auction? If not I’d be looking to see if it allows you to back out.

Thank you, No it wasnt reveald in the auction, auction people said take leagal advise by your solicitors

sorry Billy, company B is not owned by same people

That’s very strange then. Why would a company simply give away a valuable asset?

This is the reply from vendor solicitor :  

1. What was the reason for the transfer between company A to company B at Nil consideration?  That is a matter between the partied as you will note the funds were provided by company B

sheramber

portway72 said:

portway72 said:

Billy_B_North said:

It’s very likely that the property was given away to defraud people to whom company A owed money, and that company B is owned by the same (or a related) person.
You need proper legal advice here. There are other forms of transaction where the buyer ends up out of pocket (such as buying a stolen car) but I’ve no idea if the same can happen here.
Was this transfer revealed ahead of the auction? If not I’d be looking to see if it allows you to back out.

Thank you, No it wasnt reveald in the auction, auction people said take leagal advise by your solicitors

sorry Billy, company B is not owned by same people

But ar they connected in some way?

SDLT_Geek

portway72 said

This is the reply from vendor solicitor :  

1. What was the reason for the transfer between company A to company B at Nil consideration?  That is a matter between the partied as you will note the funds were provided by company B

Is the background here that at the time the property went into the name of the company A, all of the money was provided by company B, so that company A was acting as a bare trustee?  

If so, the transfer from company A to company B would be a transfer of the legal estate, without the beneficial ownership moving.

If this is the background, then there was no transfer at undervalue.