Selling a property on a shared lane

GlendaGaston

Hi everyone 
Looking for advice regarding selling my house on a shared lane. I live in Northern Ireland. My buyers mortgage lender will not give them a mortgage unless there is a maintenance schedule in place for the shared lane.  When I purchased the property approximately 14 years, the mortgage lender did not request a maintenance schedule and I have never any bother with the lane. If a pothole would appear on the 600m lane, it would be fixed by users in turn with no problems. The lane is owned by 4 farmers who have property and land on either side of the lane and I know that it would be impossible to ask these people to sign a maintenance contract as they would never agree to it and neither would I. No one would be willing to sign a legally binding contract.
I feel I am in a situation now that I will not be able to sell my property. If this is a new stipulation with all mortgage lenders, it has a detrimental effect on me moving forward and I am sure with many people with property on a shared lane. I honestly don’t know what to do. Would anyone know of a way round this? 
Thank you for reading and look forward to hearing from anyone who would have a suggestion. 

warwick2001

Do you know for certain if other mortgage lender's will insist on this, or might they be more lenient towards any legal contract in place on the maintenance issue? I'm assuming you managed to get the mortgage when you bought your home with no problems, maybe its just the buyers preferred mortgage lender that's not playing ball? Could you speak to local branches of the big banks, see if they all share the same conditions? Maybe even speak to a mortgage broker, see what they say. However, all this is moot if you can't convince prospective buyers to use the mortgage lenders you recommend. Either that or hope for an outright cash buyer.

Basically, if all the mortgage lenders insist on this legal contract, then I don't see how it can be circumnavigated. You would have to get the contract in place before you can sell. But I'm more than happy to be corrected by those who have more knowledge about these sort of things than me.

eddddy

warwick2001 said:

Do you know for certain if other mortgage lender's will insist on this, or might they be more lenient towards any legal contract in place on the maintenance issue? 

I'm not sure this is really a mortgage lender issue.

Usually, the buyer's solicitor also acts as the mortgage lender's solicitor.  So it's likely to be the buyer's solicitor who has advised the mortgage lender that the lane is a problem.

If the same buyer tries a different lender, their solicitor will probably advise the new lender that the lane is a problem.

What does your own solicitor say about the issue? Do they agree that it's a problem? Or do they think the buyer is overreacting?




You might have more luck by finding a different buyer with a different solicitor, who doesn't feel that the lane is a problem.

(However, consumer protection legislation means that the EA should tell any future buyer that your current buyer pulled-out because of the Lane problem - which might scare some future buyers away.)

user1977

I think it's more likely to be a decision by the lender than the solicitor. Here are the answers to the relevant question in the UK Lenders Handbook (i.e. the standard instructions which solicitors work to) for each lender:

https://lendershandbook.ukfinance.org.uk/lenders-handbook/northernireland/question-list/3007/

Generally it's "ask us about it", none are definitely a problem, and note that e.g. the Nationwide say they don't even need to know about it.

Gavin83

eddddy said:

warwick2001 said:

Do you know for certain if other mortgage lender's will insist on this, or might they be more lenient towards any legal contract in place on the maintenance issue? 

(However, consumer protection legislation means that the EA should tell any future buyer that your current buyer pulled-out because of the Lane problem - which might scare some future buyers away.)

Get a new estate agent.

eddddy

Gavin83 said:

eddddy said:

warwick2001 said:

Do you know for certain if other mortgage lender's will insist on this, or might they be more lenient towards any legal contract in place on the maintenance issue? 

(However, consumer protection legislation means that the EA should tell any future buyer that your current buyer pulled-out because of the Lane problem - which might scare some future buyers away.)

Get a new estate agent.

But then the new estate agent has a duty to ask the seller about previous failed sales.

Obviously, the seller could lie to the new estate agent...

Or the seller could use a 'dodgy' new estate agent - who doesn't ask too many questions, and maybe doesn't mind crossing the line of the law 'a bit'.




FWIW, the National Association of Estate Agents recommends that EAs ask sellers to fill in a standard  'Property Information Questionnaire' before they start marketing their property. Their version says:

This form is required to ensure that the Consumer Protection from Unfair Trading Regulations 2008 are complied with during the marketing of the property and must be completed as accurately as possible. Under the Consumer Protection from Unfair Trading Regulations 2008 it is important to disclose anything that would materially affect the transactional decision of the average consumer.

And one of the questions is:

11.6 Have there been any failed purchase transactions on the property within the last 12 months?

Link: https://www.propertymark.co.uk/resource/property-information-questionnaire-sales.html

user1977

eddddy said:

Gavin83 said:

eddddy said:

warwick2001 said:

Do you know for certain if other mortgage lender's will insist on this, or might they be more lenient towards any legal contract in place on the maintenance issue? 

(However, consumer protection legislation means that the EA should tell any future buyer that your current buyer pulled-out because of the Lane problem - which might scare some future buyers away.)

Get a new estate agent.

But then the new estate agent has a duty to ask the seller about previous failed sales.

Obviously, the seller could lie to the new estate agent...

Or the seller could use a 'dodgy' new estate agent - who doesn't ask too many questions, and maybe doesn't mind crossing the line of the law 'a bit'.




FWIW, the National Association of Estate Agents recommends that EAs ask sellers to fill in a standard  'Property Information Questionnaire' before they start marketing their property. Their version says:

This form is required to ensure that the Consumer Protection from Unfair Trading Regulations 2008 are complied with during the marketing of the property and must be completed as accurately as possible. Under the Consumer Protection from Unfair Trading Regulations 2008 it is important to disclose anything that would materially affect the transactional decision of the average consumer.

And one of the questions is:

11.6 Have there been any failed purchase transactions on the property within the last 12 months?

Technically correct, though I expect the fact the property is on a private lane with no regular maintenance scheme in place is going to be obvious from an initial glance - it's not in the same league as hiding something only revealed by a survey. I don't think you need to disclose "prospective buyer's lender had an unusually strict criterion".

Gavin83

I agree. It's not exactly a secret. Everyone will know it's on a private lane and everyone knows the maintenance responsibility of the private lane lies with the land owners. I don't see why they need a formal agreement. Were I the OP I think my response would be along the lines of unrealistic requirements from the previous buyer.

OP, I think the only realistic options are to either ask the buyer to find another lender or pull out and find another buyer. You can of course ask the farmers but I'd be amazed if they even considered this.

eddddy

user1977 said:

Technically correct, though I expect the fact the property is on a private lane with no regular maintenance scheme in place is going to be obvious from an initial glance - it's not in the same league as hiding something only revealed by a survey. I don't think you need to disclose "prospective buyer's lender had an unusually strict criterion".

But even if an average buyer sees at a glance that a "property is on a private lane with no regular maintenance scheme" - would an average buyer understand that might restrict their choice of mortgage lenders?


And if the buyer happened to choose the same lender, or another equally strict lender - they might lose hundreds of pounds in fees unnecessarily.

I'm really not sure that the Property Ombudsman would agree with you.



Here's an example where the EA failed to mention to prospective buyers that a house of concrete construction would have a restricted choice of mortgage lenders. The Ombudsman ordered the EA to pay compensation.

Link: https://www.tpos.co.uk/news-media-and-press-releases/case-studies/item/consumer-protection-from-unfair-trading-regulations-2008-cprs


Maybe according to your argument, perhaps it should have been obvious at a glance to the buyers that all the houses on the development were concrete (I'm sure it would have been obvious to many people), so the buyers should have known that might be a problem for some mortgage lenders. But the Ombudsman disagrees.

user1977

eddddy said:

user1977 said:

Technically correct, though I expect the fact the property is on a private lane with no regular maintenance scheme in place is going to be obvious from an initial glance - it's not in the same league as hiding something only revealed by a survey. I don't think you need to disclose "prospective buyer's lender had an unusually strict criterion".

But even if an average buyer sees at a glance that a "property is on a private lane with no regular maintenance scheme" - would an average buyer understand that might restrict their choice of mortgage lenders?


And if the buyer happened to choose the same lender, or another equally strict lender - they might lose hundreds of pounds in fees unnecessarily.

I'm really not sure that the Property Ombudsman would agree with you.



Here's an example where the EA failed to mention to prospective buyers that a house of concrete construction would have a restricted choice of mortgage lenders. The Ombudsman ordered the EA to pay compensation.

Link: https://www.tpos.co.uk/news-media-and-press-releases/case-studies/item/consumer-protection-from-unfair-trading-regulations-2008-cprs


Maybe according to your argument, perhaps it should have been obvious at a glance to the buyers that all the houses on the development were concrete (I'm sure it would have been obvious to many people), so the buyers should have known that might be a problem for some mortgage lenders. But the Ombudsman disagrees.

Non-standard construction is something which will materially affect the mortgageability, and often isn't self-evident. Like I said above, being on a private lane is not any sort of widespread issue to lenders, and I'm surprised any lender is taking the stance described by the OP. You don't need to start adding disclaimers just because some lenders have weird policies.

eddddy

user1977 said:

eddddy said:

user1977 said:

Technically correct, though I expect the fact the property is on a private lane with no regular maintenance scheme in place is going to be obvious from an initial glance - it's not in the same league as hiding something only revealed by a survey. I don't think you need to disclose "prospective buyer's lender had an unusually strict criterion".

But even if an average buyer sees at a glance that a "property is on a private lane with no regular maintenance scheme" - would an average buyer understand that might restrict their choice of mortgage lenders?


And if the buyer happened to choose the same lender, or another equally strict lender - they might lose hundreds of pounds in fees unnecessarily.

I'm really not sure that the Property Ombudsman would agree with you.



Here's an example where the EA failed to mention to prospective buyers that a house of concrete construction would have a restricted choice of mortgage lenders. The Ombudsman ordered the EA to pay compensation.

Link: https://www.tpos.co.uk/news-media-and-press-releases/case-studies/item/consumer-protection-from-unfair-trading-regulations-2008-cprs


Maybe according to your argument, perhaps it should have been obvious at a glance to the buyers that all the houses on the development were concrete (I'm sure it would have been obvious to many people), so the buyers should have known that might be a problem for some mortgage lenders. But the Ombudsman disagrees.

Non-standard construction is something which will materially affect the mortgageability, and often isn't self-evident. Like I said above, being on a private lane is not any sort of widespread issue to lenders, and I'm surprised any lender is taking the stance described by the OP. You don't need to start adding disclaimers just because some lenders have weird policies.

You're not applying the relevant legal test, Dave.


The legal test is whether the "commercial practice omits material information" where "material information means  the information which the average consumer needs, according to the context, to take an informed transactional decision".


I think the previous refusal of a mortgage is a material fact that is likely to impact the purchasing decision of an average consumer. (Some consumers might decide to go ahead anyway, but some might not.)


And if the EA failed to disclose it to a prospective buyer, and that prospective buyer happened to have a mortgage refused for the same reason - the Ombudsman would almost certainly order the EA to pay compensation. So it's in the EA's interests to disclose it.



It's really not difficult for an EA to say to a prospective buyer "A previous buyer had their mortgage refused by ABC Bank because of the lane situation. In our opinion, ABC Bank have weird policies, and other lenders will be fine.  But perhaps you should explain the situation to your mortgage lender and/or ask your solicitor's advice before paying for a mortgage application and searches etc."


Just like a conveyancing solicitor might report to the same thing to their client, during the conveyancing process.