Weird one. Anyone come across this before?

rose_T

Hi

i will try and explain the best I can. 

We were due to complete Friday. Sent deposit etc and received this email from my solicitor pasted below. 

This property is a confirmation property ( probate)  and has been empty for almost 4 yrs and we have waited a whole year to get to this point. 


any advice is greatly appreciated 


************

Unfortunately we have across an issue.

I have received further correspondence from the sellers’ solicitor yesterday to advise that settlement will likely not go ahead this Friday unless we accept a Title Indemnity Policy in respect of the existing registered mortgage the seller has against the property. What this means is, that instead of confirming that they will have this old Security removed from the Title, they will put into place an Insurance Policy that would pay out should the bank try to make a claim for any unpaid sums in the future. The issue with this is that I am obliged by your Lender, Halifax, to secure a First Ranking Security over the property. I am not able to do this unless the sellers’ solicitor agrees to discharge this existing one. If you want to consider the Title Indemnity Policy to allow settlement to go ahead, then we would need to obtain the consent of Halifax, and there is no guarantee that we would receive this by Friday, if at all – and there is a good chance that they will say no. We have asked Halifax in the meantime.

It is my advice to you that we do not accept the Title Indemnity Policy and insist that the existing Security be discharged. Unfortunately, this means that settlement will not be able to go ahead on Friday as planned, as the sellers’ solicitor will have to contact the bank to have them track down the account, confirm it is repaid, and confirm that they will sign the Deed needed to remove the Security from the Title. The reason that this is my advice to you, is that when you come to sell the property, you will likely have this exact same issue, only then you will not have any option to arrange for the discharge of the old Security as the bank will not disclose information about someone else’s mortgage to you. It may make it very difficult to sell the property in the future.

Can you let me know whether you want to consider the Title Indemnity Policy in which case I will have a fax sent over to Halifax asap, or whether you are happy to take my advice and insist on the existing Security being removed from the Title, meaning settlement will be delayed?

RelievedSheff

My advice would be you want the existing security removing. I suspect Halifax will say the same.

rose_T

Yeah that’s what we want as well, the owner has passed away and it’s her children that are the executors. So the security would be years old. 

Would anyone know how long or even if they can remove that? 

jimbog

My advice would be to follow the advice of your solicitor and get the vendors to remove it. Odd that the title wasn't looked at until this late

AdrianC

rose_T said:

Hi

i will try and explain the best I can. 

We were due to complete Friday. Sent deposit etc and received this email from my solicitor pasted below. 

This property is a confirmation property ( probate)  and has been empty for almost 4 yrs and we have waited a whole year to get to this point. 

any advice is greatly appreciated 

************

Unfortunately we have across an issue.

I have received further correspondence from the sellers’ solicitor yesterday to advise that settlement will likely not go ahead this Friday unless we accept a Title Indemnity Policy in respect of the existing registered mortgage the seller has against the property. What this means is, that instead of confirming that they will have this old Security removed from the Title, they will put into place an Insurance Policy that would pay out should the bank try to make a claim for any unpaid sums in the future. The issue with this is that I am obliged by your Lender, Halifax, to secure a First Ranking Security over the property. I am not able to do this unless the sellers’ solicitor agrees to discharge this existing one. If you want to consider the Title Indemnity Policy to allow settlement to go ahead, then we would need to obtain the consent of Halifax, and there is no guarantee that we would receive this by Friday, if at all – and there is a good chance that they will say no. We have asked Halifax in the meantime.

It is my advice to you that we do not accept the Title Indemnity Policy and insist that the existing Security be discharged. Unfortunately, this means that settlement will not be able to go ahead on Friday as planned, as the sellers’ solicitor will have to contact the bank to have them track down the account, confirm it is repaid, and confirm that they will sign the Deed needed to remove the Security from the Title. The reason that this is my advice to you, is that when you come to sell the property, you will likely have this exact same issue, only then you will not have any option to arrange for the discharge of the old Security as the bank will not disclose information about someone else’s mortgage to you. It may make it very difficult to sell the property in the future.

Can you let me know whether you want to consider the Title Indemnity Policy in which case I will have a fax sent over to Halifax asap, or whether you are happy to take my advice and insist on the existing Security being removed from the Title, meaning settlement will be delayed?

"Confirmation" is, I believe, the Scottish equivalent to Probate. Can you confirm that the property is indeed in Scotland?

Have you concluded missives (or exchanged)?

The short version of your solicitor's message is that there is still a mortgage secured against the property, and that puts a big problem up for your own lender.
The seller is saying they cannot/will not get that security flag removed, which means the previous lender still has a claim.
They suggest an insurance policy in the event of problems.
Once you own the house, the previous lender will not talk to you, so that flag will remain potentially forever.
There is no guarantee your lender will accept this - and, if they don't, you don't get the money...

I wouldn't... Get this sorted first.

rose_T

AdrianC said:

rose_T said:

Hi

i will try and explain the best I can. 

We were due to complete Friday. Sent deposit etc and received this email from my solicitor pasted below. 

This property is a confirmation property ( probate)  and has been empty for almost 4 yrs and we have waited a whole year to get to this point. 

any advice is greatly appreciated 

************

Unfortunately we have across an issue.

I have received further correspondence from the sellers’ solicitor yesterday to advise that settlement will likely not go ahead this Friday unless we accept a Title Indemnity Policy in respect of the existing registered mortgage the seller has against the property. What this means is, that instead of confirming that they will have this old Security removed from the Title, they will put into place an Insurance Policy that would pay out should the bank try to make a claim for any unpaid sums in the future. The issue with this is that I am obliged by your Lender, Halifax, to secure a First Ranking Security over the property. I am not able to do this unless the sellers’ solicitor agrees to discharge this existing one. If you want to consider the Title Indemnity Policy to allow settlement to go ahead, then we would need to obtain the consent of Halifax, and there is no guarantee that we would receive this by Friday, if at all – and there is a good chance that they will say no. We have asked Halifax in the meantime.

It is my advice to you that we do not accept the Title Indemnity Policy and insist that the existing Security be discharged. Unfortunately, this means that settlement will not be able to go ahead on Friday as planned, as the sellers’ solicitor will have to contact the bank to have them track down the account, confirm it is repaid, and confirm that they will sign the Deed needed to remove the Security from the Title. The reason that this is my advice to you, is that when you come to sell the property, you will likely have this exact same issue, only then you will not have any option to arrange for the discharge of the old Security as the bank will not disclose information about someone else’s mortgage to you. It may make it very difficult to sell the property in the future.

Can you let me know whether you want to consider the Title Indemnity Policy in which case I will have a fax sent over to Halifax asap, or whether you are happy to take my advice and insist on the existing Security being removed from the Title, meaning settlement will be delayed?

"Confirmation" is, I believe, the Scottish equivalent to Probate. Can you confirm that the property is indeed in Scotland?

Have you concluded missives (or exchanged)?

The short version of your solicitor's message is that there is still a mortgage secured against the property, and that puts a big problem up for your own lender.
The seller is saying they cannot/will not get that security flag removed, which means the previous lender still has a claim.
They suggest an insurance policy in the event of problems.
Once you own the house, the previous lender will not talk to you, so that flag will remain potentially forever.
There is no guarantee your lender will accept this - and, if they don't, you don't get the money...

I wouldn't... Get this sorted first.

Yes, we want this removed before we proceed. And yes it’s Scotland. 

I know 100% the previous mortgage is paid off but they didn’t go down the road of getting it legally signed off. 

My problem now would the executors have trouble trying to get this signed off? 

We are happy to wait for it to be done but would like a rough time frame of how long it can take for sellers solicitor to get this done 

user1977

It's not that weird for there to be a delay while a lender tracks down an old account (or convinces themselves that they've got no good reason to retain the security), bit weirder for a seller to expect the buyer to accept insurance instead. Bit annoying for it to be brought up at the last minute though, I'd have expected the executors to have checked for any existing securities at a much earlier stage. Have you concluded missives? 

rose_T

I think we have concluded missives I am not 100% sure. 

user1977

rose_T said:

I think we have concluded missives I am not 100% sure. 

It won't have happened without your solicitor telling you. 

AdrianC

rose_T said:

Yes, we want this removed before we proceed. And yes it’s Scotland. 

I know 100% the previous mortgage is paid off but they didn’t go down the road of getting it legally signed off.

How do you know this "100%"...?

My problem now would the executors have trouble trying to get this signed off?

That depends on how much paperwork they have for this old mortgage, and probably also who the lender is.

We are happy to wait for it to be done but would like a rough time frame of how long it can take for sellers solicitor to get this done

How long is a piece of string?

It might be a day or two. It might be near-impossible with the paperwork available. The mortgage may yet turn out to have an outstanding balance.

rose_T

AdrianC said:

rose_T said:

Yes, we want this removed before we proceed. And yes it’s Scotland. 

I know 100% the previous mortgage is paid off but they didn’t go down the road of getting it legally signed off.

How do you know this "100%"...?

My problem now would the executors have trouble trying to get this signed off?

That depends on how much paperwork they have for this old mortgage, and probably also who the lender is.

We are happy to wait for it to be done but would like a rough time frame of how long it can take for sellers solicitor to get this done

How long is a piece of string?

It might be a day or two. It might be near-impossible with the paperwork available. The mortgage may yet turn out to have an outstanding balance.

We are buying a property that is next door to a family member, who have known the people selling the property. Obviously they were more friendly with the lady who passed than her children. This is how I know it’s paid off.