Not sure what to do. Mortgage offer expires before Adverse Possession claim will be complete

SprostonGreenHead

I'm incredibly stressed after learning this morning that our lender (Coventry BS) requires us to have an adverse possession claim (for a small strip of land in the garden) complete before they will lend, and they won't entertain lending on just the land and property without the extra land.

I'm going to quote the explanation I made on the Land Registry thread:

SprostonGreenHead said:

We are currently in the process of buying a home where the seller extended her lawn into developer-owned shrubland buffer between other houses and fenced it up. She has used the land this way for 25 years and kept it very well maintained. As a buyer we requested they go through adverse possession as the claim seemed straightforward and almost a given they'd get it. A neighbour has apparently been through the process and got theirs. The land itself isn't really usable for the developer to build other houses.

Unfortunately, on the EAs advice (perhaps poorly communicated) the seller applied directly to LR without a solicitor handling it for them. Managed to fill out the wrong form entirely. It took 2 months for them and us to learn this. Meanwhile, we got the mortgage and really efficient solicitor lined up. We were getting worried when 2 months in no draft contracts or ability to review anything else while we awaited the outcome.

So in the end, seller's solicitors, who TBF to them once the error of their client became apparent jumped on it and re-applied and immediately asked for it to be expedited. This was granted and a survey was conducted, but LR still have to give the paper title holder 65 *working* days to respond and object (or approve).

All during this time, mortgage rates shot up and our existing rented home situation has become unsustainable. We'd secured a rate of 3.35% 5yr fixed with 75% LTV. I asked seller solicitors to identify the date that the statutory notice expired. This was to be just two days before our decent mortgage offer expired. Lender wouldn't talk about extensions to the offer until we were within 30 days of expiry. I doubt they'd grant one in the current climate. On today's rates, the same mortgage product is >£600 a month more.

Due to this, we then opted to buy the property without the land, but disappointingly our lender is now refusing to lend unless and until the AP claim is complete and either the seller or buyer is possessory title holder on completion. A survey showed that this land would make little to no difference to value but the lender calls the shots.

Is there anything I can do? Should we line up another mortgage offer (probably a 2 yr tracker) while we can? Should I suggest seller's solicitors contact the developer who owns the land (Redrow) and try get them to state no interest? That's a risk because it might prompt them to object where they ordinarily might miss the notification.

Honestly I'm so deflated today at the prospect this might not go through. Twin kids almost 7 months old and soon need their own room which we don't have. Two full size cots won't fit in our sole bedroom. Neighbours above us who moved in bang around 12 hours a day so can't work or relax. If this falls through it will almost certainly end up costing us a load more in mortgage interest for either this or another property. 18 months and counting now since we started looking for a home to buy. I felt like we were really close to the end, and then this

user1977

Have you tried escalating it with the lenders? It's not a decision which makes a great deal of sense, unless somebody has misread the situation.

Doozergirl

Have you expedited it with the Land Registry? 

SprostonGreenHead

user1977 said:

Have you tried escalating it with the lenders? It's not a decision which makes a great deal of sense, unless somebody has misread the situation.

Yea, I did wonder that. I was hesitant when our solicitor said she needed their approval to proceed. We want to buy what the seller has to sell, which the banks valuer has valued at within 2k of what we're paying (on a 75% LTV). I didn't expect this to be an issue.

I've emailed our broker to get her advice. Hopefully she can speak with the lender and clarify that they understand the situation correctly.

SprostonGreenHead

Doozergirl said:

Have you expedited it with the Land Registry? 

The seller's solicitor upon the 2nd claim (ignoring the bogus one the seller made herself) requested it to be expedited, and it was approved for expedition. A site survey has already been done, however the statutory notice must be served and either responded to or expired before anything else can happen. That does at least mean that if everything else is in order it should only be a few weeks after our offer expires, but this all seems very tight, and would still rely on Coventry BS granting an extension. I really don't fancy our chances given how much the product rate has increased.

SprostonGreenHead

SprostonGreenHead said:

user1977 said:

Have you tried escalating it with the lenders? It's not a decision which makes a great deal of sense, unless somebody has misread the situation.

Yea, I did wonder that. I was hesitant when our solicitor said she needed their approval to proceed. We want to buy what the seller has to sell, which the banks valuer has valued at within 2k of what we're paying (on a 75% LTV). I didn't expect this to be an issue.

I've emailed our broker to get her advice. Hopefully she can speak with the lender and clarify that they understand the situation correctly.

Update: Our solicitor has clarified the reasoning somewhat: The issue is apparently that the land in question is contained within the "boundary" of the property. I guess this means physical boundary as it's obviously not the legal boundary. I've suggested / enquired as to if the seller could/should erect a temporary fence at the end of her legal boundary. The awkward point with that though is that in theory it could affect the AP claim itself if I'm not mistaken.

silvercar

If the 65 working days expires 2 days before your mortgage offer, your case is expedited at the Land Registry and everything else is in order, then it still could happen.

we had a similar case, waiting on a over arching lease holder to object to a car park space purchase before they had bought the lease. The LR had given them 15 working days to respond. The seller managed to track them down and they approved quickly. You could try persuading the seller to contact the land owner to approve. 

SprostonGreenHead

silvercar said:

If the 65 working days expires 2 days before your mortgage offer, your case is expedited at the Land Registry and everything else is in order, then it still could happen.

we had a similar case, waiting on a over arching lease holder to object to a car park space purchase before they had bought the lease. The LR had given them 15 working days to respond. The seller managed to track them down and they approved quickly. You could try persuading the seller to contact the land owner to approve. 

Yea, this thought did cross my mind. There is a risk involved though that bringing their attention to it might prompt them to act negatively where initially they might not respond at all.

Given that the sale will likely fall through without the claim being successful, I guess we as the buyers have little to lose by attempting this. I'm going to make the suggestion to the seller's solicitors. 

silvercar

SprostonGreenHead said:

silvercar said:

If the 65 working days expires 2 days before your mortgage offer, your case is expedited at the Land Registry and everything else is in order, then it still could happen.

we had a similar case, waiting on a over arching lease holder to object to a car park space purchase before they had bought the lease. The LR had given them 15 working days to respond. The seller managed to track them down and they approved quickly. You could try persuading the seller to contact the land owner to approve. 

Yea, this thought did cross my mind. There is a risk involved though that bringing their attention to it might prompt them to act negatively where initially they might not respond at all.

Given that the sale will likely fall through without the claim being successful, I guess we as the buyers have little to lose by attempting this. I'm going to make the suggestion to the seller's solicitors. 

That was exactly my thoughts in similar circumstances, but it did work for us.

SprostonGreenHead

silvercar said:

SprostonGreenHead said:

silvercar said:

If the 65 working days expires 2 days before your mortgage offer, your case is expedited at the Land Registry and everything else is in order, then it still could happen.

we had a similar case, waiting on a over arching lease holder to object to a car park space purchase before they had bought the lease. The LR had given them 15 working days to respond. The seller managed to track them down and they approved quickly. You could try persuading the seller to contact the land owner to approve. 

Yea, this thought did cross my mind. There is a risk involved though that bringing their attention to it might prompt them to act negatively where initially they might not respond at all.

Given that the sale will likely fall through without the claim being successful, I guess we as the buyers have little to lose by attempting this. I'm going to make the suggestion to the seller's solicitors. 

That was exactly my thoughts in similar circumstances, but it did work for us.

I take some comfort that this worked out in your case and I think this is probably a risk worth taking for us as buyers. If Redrow do object, they have to evict within 2 years or a follow-up AP claim is pretty much a formality, as I understand it. If they were to object today, the physical boundary could be moved (at least for the sake of exchange and completion) which should in theory nullify the lender's objections. Obviously then we risk losing a strip of garden but again, this is another risk worth taking stacked against other risks. There is a risk to the sellers that they lose the land and this sale, but I hope given the market likely to fall they'll also see this as one worth taking. Also it's their fault we're in this situation, for delaying the whole process by filling out the wrong form and not using a conveyancer from the outset.

Thank you for your insight.

SprostonGreenHead

Update:

Have requested our solicitor to suggest to seller's solicitor to chase down the developer who owns the land which is subject to the adverse possession claim. My solicitor thinks the seller's solicitor will advise not to do this due to risk of bringing attention, but seller themselves did tell me the developer had previously orally expressed no interest, so we will see. They'll need to weigh up the risk vs risk of losing this sale and going back into the market on a downturn or having things delayed further if I need to re-apply for a mortgage. If that happens, I'll be paying higher interest and so I'll probably also want to get the benefit of the market downturn, on this property or another. My broker also feels that she can get me another mortgage offer if this expires.

Have also suggested to our solicitor that if the issue is a physical boundary, it could be moved by the seller. In practice this means erecting a temporary fence at her legal boundary that would be torn down by us on day 1. Not heard back on this yet.

Still feeling very nervous and that this has more chance of not going ahead than going ahead.