Vendor doesn’t actually own their garage…

Morble93

Hi all

I’m looking for advice please.

I am 5 months into a house purchase (offer accepted in April 2022). I’ve had a mortgage offer and am going through the conveyancing process now. I have already paid out a fair amount of money for Solicitors etc. 

The house is terraced and was advertised to also come with a garage, situated a few metres down the road in a row of terraced garages, each belonging to one of the terraced houses joining mine. 

My solicitors have discovered that my house doesn’t actually come with the garage. The vendors thought they owned it, but it’s become apparent that they do not. There is no paperwork to suggest ownership. The house is ex-council (Birmingham City Council), sold to private homeowners in 1992, and there is no historic record of a garage being sold. However, the owners have had sole use of this garage since they bought it from the original owners (they bought it in 2015) and have never paid any form of rent for it. They genuinely thought they owned it (a definite oversight on their part).

Since discovering they do not outright own the garage, the sellers have been in touch with both their previous solicitors and Birmingham City Council. The solicitors have said it was not their responsibility to register a garage as they were not told to. The sellers were handed over a garage key when they moved in though, from the previous owners. Clearly the ownership of the garage was not picked up on during their purchase in 2015. The council have recently found out they own it and are now saying that in order to sell the garage to me, the sellers will have to buy it from them.

The sellers are waiting on a price from the Council, but have said they are not willing to buy it for me (fair enough I suppose) but are also not willing to drop the price of the house by more than £2,000. I am already paying £10k over the asking price as there were several offers put to them (I’m a first time buyer).

My thoughts are to ask the sellers to knock off the price of the garage (once confirmed from the Council) from the house, but I’m anticipating they won’t accept if it’s over £2k. 

I don’t really know what to do here. If I’m already paying over the asking price, I worry that I’ll be massively in overpaying for this house if I can’t sell it on myself to include the garage in a few years time. However, I can’t afford to buy the garage from the council if it’s a ridiculous asking price. I think it’s really cheeky of the council to suddenly ask for money for the garage seeing as though they didn’t even realise they still owned it!

What would you do in this circumstance?

housebuyer143

Morble93 said:

Hi all

I’m looking for advice please.

I am 5 months into a house purchase (offer accepted in April 2022). I’ve had a mortgage offer and am going through the conveyancing process now. I have already paid out a fair amount of money for Solicitors etc. 

The house is terraced and was advertised to also come with a garage, situated a few metres down the road in a row of terraced garages, each belonging to one of the terraced houses joining mine. 

My solicitors have discovered that my house doesn’t actually come with the garage. The vendors thought they owned it, but it’s become apparent that they do not. There is no paperwork to suggest ownership. The house is ex-council (Birmingham City Council), sold to private homeowners in 1992, and there is no historic record of a garage being sold. However, the owners have had sole use of this garage since they bought it from the original owners (they bought it in 2015) and have never paid any form of rent for it. They genuinely thought they owned it (a definite oversight on their part).

Since discovering they do not outright own the garage, the sellers have been in touch with both their previous solicitors and Birmingham City Council. The solicitors have said it was not their responsibility to register a garage as they were not told to. The sellers were handed over a garage key when they moved in though, from the previous owners. Clearly the ownership of the garage was not picked up on during their purchase in 2015. The council have recently found out they own it and are now saying that in order to sell the garage to me, the sellers will have to buy it from them.

The sellers are waiting on a price from the Council, but have said they are not willing to buy it for me (fair enough I suppose) but are also not willing to drop the price of the house by more than £2,000. I am already paying £10k over the asking price as there were several offers put to them (I’m a first time buyer).

My thoughts are to ask the sellers to knock off the price of the garage (once confirmed from the Council) from the house, but I’m anticipating they won’t accept if it’s over £2k. 

I don’t really know what to do here. If I’m already paying over the asking price, I worry that I’ll be massively in overpaying for this house if I can’t sell it on myself to include the garage in a few years time. However, I can’t afford to buy the garage from the council if it’s a ridiculous asking price. I think it’s really cheeky of the council to suddenly ask for money for the garage seeing as though they didn’t even realise they still owned it!

What would you do in this circumstance?

Wait for the price and go from there. . The issue is if the seller registers it, it will cause long delays as they will have to get the land registry updated also. 
My mate bought 3 parking spaces from the council and it was £2k so it might but be that much, however the council will likely expect you to pay your own and their legal fees. It ended up costing £4k. They also expected my friend to get a surveyor to value to land, they didn't just decide a price. 

Whatever you do, it could be an issue which causes a lot of delays. 
You have to really decide if you want it without the garage and if not, push them on the price or walk away. 

user1977

Not cheeky of the council if nobody has previously paid them for the garage! Doesn't sound like they had.

If you were buying the house without the garage, what would be the difference in value? That's what's relevant, rather than what it would cost to add on the garage.

silvercar

"Since discovering they do not outright own the garage, the sellers have been in touch with both their previous solicitors and Birmingham City Council. The solicitors have said it was not their responsibility to register a garage as they were not told to. The sellers were handed over a garage key when they moved in though, from the previous owners. Clearly the ownership of the garage was not picked up on during their purchase in 2015. The council have recently found out they own it and are now saying that in order to sell the garage to me, the sellers will have to buy it from them."

Totally the seller's responsibility here. All solicitors tell their clients to check the documents against what they were expecting. If they were expecting a garage and it wasn't on the paperwork they should have queried it at the time of their purchase.
Now they have a problem and they need to sort it. Ideally they could get in touch with the people that sold to them and see if they have proof of purchasing the garage. If they do need to buy it from the council they need to sort that for themselves. 

From your point of view, would you want the house without the garage? If you would then you are looking for a reduction in price on the difference between the house value with and without the garage.

GixerKate

Wait and find out what the price of the garage is before making any decisions.

How much do you want the garage?  Is it a must have or a nice to have?  For us a garage was an absolute must have so for me if the house doesn't come with a garage I'd be walking away, especially as the price agreed included the garage.  

Are the sellers in a hurry to move and is it in a chain?  They may not want to drop the price but they also may not want to risk their onward purchase.  Genuine oversight or not, the right thing to do would be to drop the agreed asking price by the value of the garage so that you can then buy the garage from the council.

Exodi

Logically, if they believed they owned the garage and accepted a price based on the property including the garage - they should either purchase the garage or reduce their price by the equivelant amount.

It's not reasonable to try and maintain the same price, now the know that the garage is technically not included.

Unfortuantely, I'd expect they've already spent the money in their head (perhaps in calculations for their onward purchase).

Morble93 said:

I think it’s really cheeky of the council to suddenly ask for money for the garage seeing as though they didn’t even realise they still owned it!

I think personifying the council in this way is a tad strange. It's not as if they have an army of people whose sole job is to constantly scan through all the title deeds and regularly drive out to ensure no-one is using their land in an unagreed way.

They've been alerted to it now, which is all that matters. It's not unreasonable to charge for land they own - if anything the previous seller should be thanking their lucky stars they got many years out of it without being noticed.

kirtondm

Another strand is your solicitors will have to inform the mortgage company and they may revalue the purchase - this might give you an idea of the difference in valuation.

I can't see a garage being worth only 2K - The vendors are not now selling a house with a garage and if they are unwilling to renegotiate it looks like the sale will fall though.

Schwarzwald

agree with sentiment. vendor's fault and issue.
if they were reasonable, they would reduce the price by the value of the garage and you try to buy it directly from the council.

ultimately up to you as other said if you wanted the house at this price minus maybe 2k without a garage?

obv issues for the vendors in the next sale is that they would need to market the house without the garage now and it can be doubted if they were to achieve the same price over asking price but ex garage.

wait for the valuation of the garage, then request a reduction and hope they realize that remarketing is unlikely to get them your offer again in the current environment, otherwise walk

Morble93

Thank you all so much for your comments - all so helpful! I’m going to see what the valuation of the garage is and go from there.

Grumpy_chap

I know the OP is in Birmingham and I am not, but I fear that considerations of the value of the garage at £2k or £10k will be far lower than the value ends up at.

It is also quite possible that the LA never sold any of the garages and this has now come to their attention so there will be an attempt to recover / sell all the garages and / or sell the whole block of garages as a development site.  That will be a slow process.

The vendors may try to claim the garage under adverse possession - that will also be a slow process.

The OP may need to start to think and decide whether they will go ahead with the house purchase and at what value if there is no garage.

Morble93

Grumpy_chap said:

I know the OP is in Birmingham and I am not, but I fear that considerations of the value of the garage at £2k or £10k will be far lower than the value ends up at.

It is also quite possible that the LA never sold any of the garages and this has now come to their attention so there will be an attempt to recover / sell all the garages and / or sell the whole block of garages as a development site.  That will be a slow process.

The vendors may try to claim the garage under adverse possession - that will also be a slow process.

The OP may need to start to think and decide whether they will go ahead with the house purchase and at what value if there is no garage.

That is a very good point. The good thing is that the other garages do belong to the neighbours - I checked the land registry.