Lender not accepting payment for redemption

Dev_MK

Hello

Its been about 6 months since we moved to our new house ( completion in July 2021). We generally moved on assuming that its all done and sorted until now. Our conveyancer send us an email asking if we could let surveyor in to do another house valuation. Apparently sellers lender is not accepting their payment for redemption and would like to do another valuation. ( 6 months after completion??? ) According to zoopla valuation house is worth 35-40k more than it used to be when we purchased it. I do not understand why do we have to deal with this 6 months after we bought the house. It was a very long process (1.5 year ) and we are absolutely fed up with amount of problems it brought. Do we have to be dragged into this? I am honestly not sure if I'm being silly about this because of amount of frustration whole purchase was causing. Today we decided to check land registry documents online and 6 months after completion they are still in previous owner name. Could you please advise me on this matter? Could there be any possible problems arising for us?

Thank you very much for your help.

mrschaucer

Before getting involved with the seller's surveyor, ask your conveyancer why they have not yet dealt with your registration at the Land Registry and see what they say.  The buyer's solicitors usually rely on the undertaking of the vendor's solicitor to remove any charge over the property before allowing you to complete, but it sounds like this hasn't happened for some reason.  You need to know what's going on.

Dev_MK

Thank you for your response. I'm still waiting for my conveyancer to reply. They do take their time. I could be wrong about this by it seems to me like sellers probably used something like help to buy scheme and they need to repay their 20% of the house value. But there may be a disagreement how much that 20% is since house prices went up so much.

GDB2222

Oh dear! The sellers have guaranteed to clear off any charges on the property. Six months down the line, and they can't do that because of a dispute with their lenders. The house can't be registered in your names until the charge is cleared off, or at least you don't want to risk that.

You don't have to let the surveyor in, but the consequence may be that the dispute drags on for years, and the charge doesn't get cleared. That's not in your interests, even though you are the innocent party. 

saajan_12

Dev_MK said:

Hello

Its been about 6 months since we moved to our new house ( completion in July 2021). We generally moved on assuming that its all done and sorted until now. Our conveyancer send us an email asking if we could let surveyor in to do another house valuation. Apparently sellers lender is not accepting their payment for redemption and would like to do another valuation. ( 6 months after completion??? ) - did they have an equity release or some mortgage based on a % of the house value? Usually the valuation shouldn't make a difference to the seller's lender. 
According to zoopla valuation house is worth 35-40k more than it used to be when we purchased it.  - ignore this, the margin of error is too large to make this meaningful. 
I do not understand why do we have to deal with this 6 months after we bought the house. It was a very long process (1.5 year ) and we are absolutely fed up with amount of problems it brought. Do we have to be dragged into this? I am honestly not sure if I'm being silly about this because of amount of frustration whole purchase was causing. Today we decided to check land registry documents online and 6 months after completion they are still in previous owner name. - well this is the bit that affects you. Did the solictors give an undertaking to remove the charge and transfer the registration to your name? Were both of these done? 
Could you please advise me on this matter? Could there be any possible problems arising for us?

Thank you very much for your help.

Usually,
1. seller's solicitor obtains a redemption statement from the seller's lender for them to remove the charge
2. Solicitor gives undertaking to do (3) and (4) shortly after completion if they can't be done immediately
2. Charge removed (since the lender has received the amount stated in the redemption statement)
3. Land registry transferred to your name (per the completion agreement)

Was such an undertaking given, and were there conditions eg on another valuation? 
Ultimately your solicitor can answer, but I expect there might be no requirement on you to allow a valuation etc and legally you can force the transfer to your name or sue for any losses. However it might be easier to just allow it if that makes everyone more willing to do what they need to without court. 

Dev_MK

saajan_12 said:

Dev_MK said:

Hello

Its been about 6 months since we moved to our new house ( completion in July 2021). We generally moved on assuming that its all done and sorted until now. Our conveyancer send us an email asking if we could let surveyor in to do another house valuation. Apparently sellers lender is not accepting their payment for redemption and would like to do another valuation. ( 6 months after completion??? ) - did they have an equity release or some mortgage based on a % of the house value? Usually the valuation shouldn't make a difference to the seller's lender. 
According to zoopla valuation house is worth 35-40k more than it used to be when we purchased it.  - ignore this, the margin of error is too large to make this meaningful. 
I do not understand why do we have to deal with this 6 months after we bought the house. It was a very long process (1.5 year ) and we are absolutely fed up with amount of problems it brought. Do we have to be dragged into this? I am honestly not sure if I'm being silly about this because of amount of frustration whole purchase was causing. Today we decided to check land registry documents online and 6 months after completion they are still in previous owner name. - well this is the bit that affects you. Did the solictors give an undertaking to remove the charge and transfer the registration to your name? Were both of these done? 
Could you please advise me on this matter? Could there be any possible problems arising for us?

Thank you very much for your help.

Usually,
1. seller's solicitor obtains a redemption statement from the seller's lender for them to remove the charge
2. Solicitor gives undertaking to do (3) and (4) shortly after completion if they can't be done immediately
2. Charge removed (since the lender has received the amount stated in the redemption statement)
3. Land registry transferred to your name (per the completion agreement)

Was such an undertaking given, and were there conditions eg on another valuation? 
Ultimately your solicitor can answer, but I expect there might be no requirement on you to allow a valuation etc and legally you can force the transfer to your name or sue for any losses. However it might be easier to just allow it if that makes everyone more willing to do what they need to without court. 

Unfortunately I don't have any details regarding their mortgage. Will have to wait for my solicitor to explain that part. I can just allow survey to be done its not that big of a deal. A little annoying after 1.5 year of messing with the purchase but if it can speed up the whole process its probably the right thing to do. I was generally more concerned if there could be any serious problems or unexpected costs for us. My take from it so far is its mostly about another delay in transferring property to our name. I was thinking that after completion property is legally ours but not according to land registry ( for now ) ? Its all a bit confusing. I really appreciate your help. Thank you very much.

GDB2222

Dev_MK said:

saajan_12 said:

Dev_MK said:

Hello

Its been about 6 months since we moved to our new house ( completion in July 2021). We generally moved on assuming that its all done and sorted until now. Our conveyancer send us an email asking if we could let surveyor in to do another house valuation. Apparently sellers lender is not accepting their payment for redemption and would like to do another valuation. ( 6 months after completion??? ) - did they have an equity release or some mortgage based on a % of the house value? Usually the valuation shouldn't make a difference to the seller's lender. 
According to zoopla valuation house is worth 35-40k more than it used to be when we purchased it.  - ignore this, the margin of error is too large to make this meaningful. 
I do not understand why do we have to deal with this 6 months after we bought the house. It was a very long process (1.5 year ) and we are absolutely fed up with amount of problems it brought. Do we have to be dragged into this? I am honestly not sure if I'm being silly about this because of amount of frustration whole purchase was causing. Today we decided to check land registry documents online and 6 months after completion they are still in previous owner name. - well this is the bit that affects you. Did the solictors give an undertaking to remove the charge and transfer the registration to your name? Were both of these done? 
Could you please advise me on this matter? Could there be any possible problems arising for us?

Thank you very much for your help.

Usually,
1. seller's solicitor obtains a redemption statement from the seller's lender for them to remove the charge
2. Solicitor gives undertaking to do (3) and (4) shortly after completion if they can't be done immediately
2. Charge removed (since the lender has received the amount stated in the redemption statement)
3. Land registry transferred to your name (per the completion agreement)

Was such an undertaking given, and were there conditions eg on another valuation? 
Ultimately your solicitor can answer, but I expect there might be no requirement on you to allow a valuation etc and legally you can force the transfer to your name or sue for any losses. However it might be easier to just allow it if that makes everyone more willing to do what they need to without court. 

Unfortunately I don't have any details regarding their mortgage. Will have to wait for my solicitor to explain that part. I can just allow survey to be done its not that big of a deal. A little annoying after 1.5 year of messing with the purchase but if it can speed up the whole process its probably the right thing to do. I was generally more concerned if there could be any serious problems or unexpected costs for us. My take from it so far is its mostly about another delay in transferring property to our name. I was thinking that after completion property is legally ours but not according to land registry ( for now ) ? Its all a bit confusing. I really appreciate your help. Thank you very much.

I’m sure that you are right to go along with the survey. 

If you lose a day’s work for the survey, you can ask the vendors or their solicitors to reimburse you. 

Something has gone drastically wrong with the process, as Sajaan says, because it is normal for the seller’s solicitor to get a redemption statement for the mortgage before completion. So, what’s happening shouldn’t be. 

So, if you demand payment for letting the surveyor in, I expect someone will cough up.

Skylon

I wouldn’t be concerned that the land registry registration isn’t yet complete. There will be undertakings in place between the solicitors to deal with the seller’s charges.  

Did you buy from a mortgagee in possession?  That would explain the surveyor request, as it’s often a contract clause that the mortgagee’s surveyor is to be allowed access for a set period following completion.  Your report from your solicitor/conveyancer is likely to state whether it was a mortgagee sale. 

TBagpuss

This is a pain in the neck but it's likely to be resolved most quickly by allowing the survey. 
As others have said, your solicitors should have obtained an undertaking from the seller's solicitor to discharge the mortgage(s) and remove the charges. Assuming they di, then it is down to the seller and their solicitor to get things sorted out.
your solicitor will also have given an undertaking to your lender to register the transfer and your lender's change, o they have a strong incentive to get this sorted out as well.

Either way, while it is inconvenient it should not be a problem for you long term as long as the appropriate undertakings were received (and if your solicitor failed to obtain them then in the event that you suffered any losses you would likely have a claim against your solicitor) 

GDB2222

Skylon said:

I wouldn’t be concerned that the land registry registration isn’t yet complete. There will be undertakings in place between the solicitors to deal with the seller’s charges.  

Did you buy from a mortgagee in possession?  That would explain the surveyor request, as it’s often a contract clause that the mortgagee’s surveyor is to be allowed access for a set period following completion.  Your report from your solicitor/conveyancer is likely to state whether it was a mortgagee sale. 

I wouldn’t be so laid back about it. Yes, there are almost certainly solicitor’s undertakings in place, providing the vendors used a solicitor. But, for example the OP won’t be able to remortgage until this is sorted out. So, the OP is saddled with the consequences of a dispute he/she isn’t even party to.  

The sooner it’s sorted out, the better.

TripleH

Dev_MK, in a nutshell there is a problem that was not of your creating that you are stuck with (unfortunately). Irs a pain but yes, I would allow the surveyor in to do their bit as soon as is conveniently possible. I would also (chance my arm) ask that any extra legal costs you might incur be paid by your seller as it is their mess you are having to real with.