Tenant buying my house, completion failed

Upset_Nanny

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lika_86

What does your solicitor say about it? Have they served notice to complete on your buyer?

Upset_Nanny

My understanding is that I am the one in breach, so the buyer cannot complete until the Land Registry anomaly is cleared, so they cannot serve notice to the buyer

user1977

Upset_Nanny said:

The buyers solicitor (remember she is already living in the house as my tenant) has told the buyer that she no longer has to pay any rent as exchange has taken place and the house no longer belongs to anyone! 

How is this statement reaching you? It's (obviously) nonsense to say that the house no longer belongs to anyone, it's still yours.

I would expect the tenancy (and therefore, rent) to continue until whenever completion actually happens. What does your contract say about it?

ProDave

12th October is only just over 2 weeks away.  Though annoying if your solicitor thinks it will complete on the 12th, I would just wait.  Loss of 2 weeks rent is nothing in the scheme of things.

loubel

Which solicitor made the application - yours presumably? Can they not withdraw the application or are they saying that the Restriction won't drop off on registration of the sale or requires consent, and so needs to be dealt with beforehand? If so, I'd also be asking why they exchanged contracts before this was resolved? It might be helpful if you could share the wording of the Restriction.

Your tenant still owes you rent in the same way that she would have if you were selling to another landlord and completion were delayed. However, you appear to be the one in breach of the contract to sell to her so it isn't a clean situation. I'd focus on getting in a position to complete first and then work out what to do about the rent.

pinkshoes

Upset_Nanny said:

Hi
I have a dilemma, I will try to keep this succinct.
I have had a tenant in my property for over 10 years and I have agreed to sell it to her. All was going swimmingly until an unexpected Land Registry issue arose.
We exchanged contracts on 20 September with completion agreed for 22nd.
The buyers solicitor approached Land Registry for transfer, only to uncover an open application against the Title.
When I bought the house there was a restriction imposed by the previous owners mortgage company basically saying I could not sell again within 3 months without the approval of the loan company. This expired 12 years ago.
The solicitors in their wisdom had decided to contact the restriction imposer to ask them to remove it, despite the fact that we knew it would automatically be removed when the next transfer took place. As you can imagine this took months to find its way to the correct person and the Land Registry has given them until 12 October to respond.
The buyers solicitor (remember she is already living in the house as my tenant) has told the buyer that she no longer has to pay any rent as exchange has taken place and the house no longer belongs to anyone! Up until now I have had an extremely good relationship with this tenant and so I had already given her the opportunity to pay the pro-rata rent to the completion date, more fool me I know I should have let her pay the full month and paid her back after completion. So now I am £400 down and being told I am in breach.
Needless to say I have spent many hours chasing the company to respond, but because they are owned under many different names over the 12 years finding a person to own it is difficult. My solicitor has also been chasing.
Am I really in breach for something I could not control or forsee, and which was in essence caused by an unecessary query being raised by the solicitors, and am I really now not entitled to be paid rent until it is resoleved. As far as I know no deposit has been paid by the buyer. 

Regarding the rent thing, you are still the owner of the property until completion, so rent is due as per normal. No idea where their solicitor has got that idea from! I would write to the tenant reminding them that rent is due until completion.

(If this drags on and they fail to pay rent, issue an S8 to evict them. On the plus side, once completion takes place they have an asset so you can just threaten court action for unpaid rent!).

Also, shouldn't their solicitor have checked the land registry to make sure there were no charges against the property before allowing exchange to happen? 

The bit in bold is confusing. If it took MONTHS then how come exchange went ahead? Surely this should have been sorted before exchanging if it was known about?

If the only restriction was that you didn't sell the property within 3 months, then surely you can have this removed quickly as the constraint has been met?

Upset_Nanny

ProDave said:

12th October is only just over 2 weeks away.  Though annoying if your solicitor thinks it will complete on the 12th, I would just wait.  Loss of 2 weeks rent is nothing in the scheme of things.

Yes I agree, but just because the land registry have given them til 12 Oct to respond doesn't mean they will and the Land registry would need chasing to remove it, they are not very up todate, so it could take months.

Upset_Nanny

loubel said:

Which solicitor made the application - yours presumably? Can they not withdraw the application or are they saying that the Restriction won't drop off on registration of the sale or requires consent, and so needs to be dealt with beforehand? If so, I'd also be asking why they exchanged contracts before this was resolved? It might be helpful if you could share the wording of the Restriction.

Your tenant still owes you rent in the same way that she would have if you were selling to another landlord and completion were delayed. However, you appear to be the one in breach of the contract to sell to her so it isn't a clean situation. I'd focus on getting in a position to complete first and then work out what to do about the rent.

I have already tried asking them about removing it but they said because they had responded to it they had to put an expiry date in place. I have asked my tenant if she feels it is morally right not to pay the rent afterall I did not have to give her the opportunity to pay the pro rata when we exchanged. As she is inexperienced I believe she is just following her solicitors advice. The entry was not there when the first searches took place so that is why exchange took place, which is when it reared its head. I have chased as much as I can at the moment.

sammyjammy

Maybe recommend she checks with an independent third party such as Shelter re: paying rent and/or provide her with evidence that rent is still due.

I bet her solicitor didn't put it in writing!

loubel

What entry wasn't there? If the solicitor made an application to amend the title then they would have known about it and should have held off exchange of contracts until resolved.