Auction conveyancing

Thrugelmir

eddddy said:

london21 said:

user1977 said:

Also, I'm not sure what you're asking which hasn't already been answered on your other threads.

My solicitor is refusing to continue so was asking if anyone has had a similar experience and what they did going forward. I have tried to delete but only has edit options. 

From your other thread, it sounds like your solicitor didn't have the specialist knowledge required.

Solicitor isn't here to give their side of the story, too easy to simply lay the blame elsewhere. 

london21

Thrugelmir said:

eddddy said:

london21 said:

user1977 said:

Also, I'm not sure what you're asking which hasn't already been answered on your other threads.

My solicitor is refusing to continue so was asking if anyone has had a similar experience and what they did going forward. I have tried to delete but only has edit options. 

From your other thread, it sounds like your solicitor didn't have the specialist knowledge required.

Solicitor isn't here to give their side of the story, too easy to simply lay the blame elsewhere. 

There is no blame here. I just want to complete in order not to lose my deposit etc. The solicitor did say that prior to winning the auction should have seeked legal advice but thats lesson learnt. My solicitor is not familiar with auction property, back to back sale etc but because of the time scale and how busy the conveyancing industry are at present time is not on my side.I went with current solicitor because of there positive reviews, responsiveness etc.

Tiglet2

london21 said:

Hi All, does anyone have experience with auction back to back sale conveyancing.
I bought a property on acution and upon recieving the contract realised the vendor's name is not on the land registry.
My solicitor has asked the seller's solicitor to provide "Please provide evidence of the transfer from the current registered proprietor to your client and the Stamp Duty return."

seller's solicitor has stated " please note our client’s purchase of the property is to coincide with its sale which is to take place simultaneously." 

Is this common with back to back auction sale transactions because the property is unregistered I am havin to buy cash.

Extra special conditions states:
1. The seller is selling as the contractual purchaser of the Property. The buyer acknowledges that the seller is only the contractual purchaser and shall not be entitled to raise any requisition arising from the seller not being the registered proprietor of the Property and the buyer shall not be entitled to refuse to complete for this reason.
2. The seller shall, in addition to the Transfer Deed provide to the buyer:
a) The Transfer Deed from the registered proprietor to the seller
b) SDLT5 Certificate in respect of the Transfer to the seller
c) Fom AP1 in respect of the transfer to the seller

3. If the buyer shall refuse to complete until the seller is the registered proprietor of the Property the buyer shall on the contractual completion date pay to the seller the balance of the purchase price to be held by the seller’s solicitors until completion and on completion the buyer shall pay to the seller in addition to the purchase price the stamp duty land tax payable by the seller in respect of the Transfer to the seller as a result of the buyer’s refusal to complete on the completion date

Reading the above, I think your solicitor doesn't want to act for you as there are going to be complications when they make their application to the Land Registry to register you as the new owner.  The seller's solicitor has made it clear above that they will not assist your solicitor, nor must your solicitor ask for help, as they will not be "entitled".

While the seller's solicitor is stating that they will provide the documentation regarding the transfer from the registered proprietor to the "contractual purchaser", it seems that they want your solicitor to deal with it.  Your solicitor did not act for the contractual purchaser and will know nothing about that transaction from the registered proprietor, so it is understandable that your solicitor is reluctant to take on this responsibility.

Did the seller only purchase this property recently and this is why the register has not been updated?  If so, I would wonder why they are selling again so quickly (and quite possibly at a loss).

london21

Tiglet2 said:

london21 said:

Hi All, does anyone have experience with auction back to back sale conveyancing.
I bought a property on acution and upon recieving the contract realised the vendor's name is not on the land registry.
My solicitor has asked the seller's solicitor to provide "Please provide evidence of the transfer from the current registered proprietor to your client and the Stamp Duty return."

seller's solicitor has stated " please note our client’s purchase of the property is to coincide with its sale which is to take place simultaneously." 

Is this common with back to back auction sale transactions because the property is unregistered I am havin to buy cash.

Extra special conditions states:
1. The seller is selling as the contractual purchaser of the Property. The buyer acknowledges that the seller is only the contractual purchaser and shall not be entitled to raise any requisition arising from the seller not being the registered proprietor of the Property and the buyer shall not be entitled to refuse to complete for this reason.
2. The seller shall, in addition to the Transfer Deed provide to the buyer:
a) The Transfer Deed from the registered proprietor to the seller
b) SDLT5 Certificate in respect of the Transfer to the seller
c) Fom AP1 in respect of the transfer to the seller

3. If the buyer shall refuse to complete until the seller is the registered proprietor of the Property the buyer shall on the contractual completion date pay to the seller the balance of the purchase price to be held by the seller’s solicitors until completion and on completion the buyer shall pay to the seller in addition to the purchase price the stamp duty land tax payable by the seller in respect of the Transfer to the seller as a result of the buyer’s refusal to complete on the completion date

Reading the above, I think your solicitor doesn't want to act for you as there are going to be complications when they make their application to the Land Registry to register you as the new owner.  The seller's solicitor has made it clear above that they will not assist your solicitor, nor must your solicitor ask for help, as they will not be "entitled".

While the seller's solicitor is stating that they will provide the documentation regarding the transfer from the registered proprietor to the "contractual purchaser", it seems that they want your solicitor to deal with it.  Your solicitor did not act for the contractual purchaser and will know nothing about that transaction from the registered proprietor, so it is understandable that your solicitor is reluctant to take on this responsibility.

Did the seller only purchase this property recently and this is why the register has not been updated?  If so, I would wonder why they are selling again so quickly (and quite possibly at a loss).

The vendor bought it from the person on land registry and is selling it on. 

The seller’s solicitor and my solicitor will handle the registration I think because my solicitor sent him draft TR1.
I called the auctioneers and they said quite common with back to back sale and that they have done due diligence. If the person selling it does not have right to won’t be with a solicitor etc they would have done checks. 

I checked the seller’s company on companies house and seems to have done a few think he buys it and then sells on. 

Will also call the conveyancing company the auctioneer’s said is familiar with them on Monday to get their input and quote. 

SDLT_Geek

london21 said:

Hi All, does anyone have experience with auction back to back sale conveyancing.
I bought a property on acution and upon recieving the contract realised the vendor's name is not on the land registry.
My solicitor has asked the seller's solicitor to provide "Please provide evidence of the transfer from the current registered proprietor to your client and the Stamp Duty return."

seller's solicitor has stated " please note our client’s purchase of the property is to coincide with its sale which is to take place simultaneously." 

Is this common with back to back auction sale transactions because the property is unregistered I am havin to buy cash.

Extra special conditions states:
1. The seller is selling as the contractual purchaser of the Property. The buyer acknowledges that the seller is only the contractual purchaser and shall not be entitled to raise any requisition arising from the seller not being the registered proprietor of the Property and the buyer shall not be entitled to refuse to complete for this reason.

2. The seller shall, in addition to the Transfer Deed provide to the buyer:
a) The Transfer Deed from the registered proprietor to the seller
b) SDLT5 Certificate in respect of the Transfer to the seller
c) Fom AP1 in respect of the transfer to the seller

You might find it helpful to read the HMRC guidance here https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm21580 as to what is required for the Land Registry to register the new ownership in a subsale case.  In reading this, note that:

A is the present registered proprietor of the property.

B is your seller.  B contracted to buy the property from A, but has not yet take a transfer.  B is to take a transfer from A on the same day that you complete.

C is you.  You have contracted at auction to buy the property from B.

Here is part of what SDLTM21580 says:

SDLTM21580 - Registration of interest in land

FA03/S79 prevents the registration of land acquired in most notifiable land transactions unless the person applying to have their interest registered produces a certificate (in practice the SDLT5) showing they have met their SDLT obligations.

In a subsale, there will generally be two transfers of the land: A to B and B to C.

If B does not wish to register its interest in the land, C will need to produce C’s SDLT5, its application for registration and the transfers from A to B and B to C. With its application for registration, C should also either:

1. confirm in writing that B acquired the land from A and transferred it to C in pursuance of a ‘free-standing transfer’ for the purposes of Schedule 2A to the Finance Act 2003, or
2. produce written confirmation from B (or B’s agent) that B acquired the land from A and transferred it to C in pursuance of a ‘free-standing transfer’ for the purposes of Schedule 2A to the Finance Act 2003.

eddddy

london21 said:

I checked the seller’s company on companies house and seems to have done a few think he buys it and then sells on. 

This question won't help your situation - but out of interest, can you tell what kind of company it is?  This sounds similar to the type of strategy that "we buy any house" companies use.


Essentially, they would tell a 'financially distressed' seller that they'll buy their house for £x.

What they don't mention, is that they'll be selling the house 'back-to-back' on the same day (maybe at auction) for, say, £x + £20k


So the "we buy any house" company can make tens of thousands, without even needing a penny in their bank account.


And this would be particularly harsh on the original seller - the auction price would be low anyway, but the original seller would be getting thousands less than that.

london21

SDLT_Geek said:

london21 said:

Hi All, does anyone have experience with auction back to back sale conveyancing.
I bought a property on acution and upon recieving the contract realised the vendor's name is not on the land registry.
My solicitor has asked the seller's solicitor to provide "Please provide evidence of the transfer from the current registered proprietor to your client and the Stamp Duty return."

seller's solicitor has stated " please note our client’s purchase of the property is to coincide with its sale which is to take place simultaneously." 

Is this common with back to back auction sale transactions because the property is unregistered I am havin to buy cash.

Extra special conditions states:
1. The seller is selling as the contractual purchaser of the Property. The buyer acknowledges that the seller is only the contractual purchaser and shall not be entitled to raise any requisition arising from the seller not being the registered proprietor of the Property and the buyer shall not be entitled to refuse to complete for this reason.

2. The seller shall, in addition to the Transfer Deed provide to the buyer:
a) The Transfer Deed from the registered proprietor to the seller
b) SDLT5 Certificate in respect of the Transfer to the seller
c) Fom AP1 in respect of the transfer to the seller

You might find it helpful to read the HMRC guidance here https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm21580 as to what is required for the Land Registry to register the new ownership in a subsale case.  In reading this, note that:

A is the present registered proprietor of the property.

B is your seller.  B contracted to buy the property from A, but has not yet take a transfer.  B is to take a transfer from A on the same day that you complete.

C is you.  You have contracted at auction to buy the property from B.

Here is part of what SDLTM21580 says:

SDLTM21580 - Registration of interest in land

FA03/S79 prevents the registration of land acquired in most notifiable land transactions unless the person applying to have their interest registered produces a certificate (in practice the SDLT5) showing they have met their SDLT obligations.

In a subsale, there will generally be two transfers of the land: A to B and B to C.

If B does not wish to register its interest in the land, C will need to produce C’s SDLT5, its application for registration and the transfers from A to B and B to C. With its application for registration, C should also either:

1. confirm in writing that B acquired the land from A and transferred it to C in pursuance of a ‘free-standing transfer’ for the purposes of Schedule 2A to the Finance Act 2003, or
2. produce written confirmation from B (or B’s agent) that B acquired the land from A and transferred it to C in pursuance of a ‘free-standing transfer’ for the purposes of Schedule 2A to the Finance Act 2003.

Thank you. Think the vendor wants to do A to C. Will have to call my solicitor first thing tomorrow and ask what is pending on my side. The condition implies that if I want the property registered from A to B first will be liable for their stamp duty.

“If there is only one transfer of the land - A to C - then C will only need to produce its SDLT5, its application for registration and the transfer from A to C.

In an assignment of rights, there will be just one transfer of the land: A to C. In this case, C can register its interest in the normal way. Although the notional land transaction between A and B is notifiable for SDLT purposes, FA03/S79 does not apply to the notional transaction. There is no need for a letter confirming an assignment of rights. Only C’s SDLT5 is needed.”

london21

eddddy said:

london21 said:

I checked the seller’s company on companies house and seems to have done a few think he buys it and then sells on. 

This question won't help your situation - but out of interest, can you tell what kind of company it is?  This sounds similar to the type of strategy that "we buy any house" companies use.


Essentially, they would tell a 'financially distressed' seller that they'll buy their house for £x.

What they don't mention, is that they'll be selling the house 'back-to-back' on the same day (maybe at auction) for, say, £x + £20k


So the "we buy any house" company can make tens of thousands, without even needing a penny in their bank account.


And this would be particularly harsh on the original seller - the auction price would be low anyway, but the original seller would be getting thousands less than tha

Yeah think its what this is. That’s why they put on auction. 
mortgage is impossible with this strategy.
The area has seen growth due to the upcoming crossrail.
The nature of business on company.s house 

• 68100 - Buying and selling of own real estate

SDLT_Geek

london21 said:

SDLT_Geek said:

Thank you. Think the vendor wants to do A to C. Will have to call my solicitor first thing tomorrow and ask what is pending on my side. The condition implies that if I want the property registered from A to B first will be liable for their stamp duty.

“If there is only one transfer of the land - A to C - then C will only need to produce its SDLT5, its application for registration and the transfer from A to C.

In an assignment of rights, there will be just one transfer of the land: A to C. In this case, C can register its interest in the normal way. Although the notional land transaction between A and B is notifiable for SDLT purposes, FA03/S79 does not apply to the notional transaction. There is no need for a letter confirming an assignment of rights. Only C’s SDLT5 is needed.”

It does not seem the seller wants to do an A to C transfer when the extracts you have posted from auction contract make it clear the intention is that there will be A to B and then B to C transfers. 

GDB2222

SDLT_Geek said:

london21 said:

SDLT_Geek said:

Thank you. Think the vendor wants to do A to C. Will have to call my solicitor first thing tomorrow and ask what is pending on my side. The condition implies that if I want the property registered from A to B first will be liable for their stamp duty.

“If there is only one transfer of the land - A to C - then C will only need to produce its SDLT5, its application for registration and the transfer from A to C.

In an assignment of rights, there will be just one transfer of the land: A to C. In this case, C can register its interest in the normal way. Although the notional land transaction between A and B is notifiable for SDLT purposes, FA03/S79 does not apply to the notional transaction. There is no need for a letter confirming an assignment of rights. Only C’s SDLT5 is needed.”

It does not seem the seller wants to do an A to C transfer when the extracts you have posted from auction contract make it clear the intention is that there will be A to B and then B to C transfers. 

I haven’t reread everything in this thread, but my strong impression was that the seller does want to do an A to C transfer, but will do the two stage transfer if the buyer insists and also pays the extra duty.