Tenant buying my house, completion failed

Upset_Nanny

user1977 said:

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?

I am in text contact with my tenant this is how the statement reached me. I have pointed out the fact that I have a tenancy agreement in place (or in my case an occupancy contract in Wales) to my solicitor and await her response.

Upset_Nanny

loubel said:

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.

The buyers solicitor made the request for the official title back in July and at that time the letter to remove the restriction had not been sent. It appeared on the 2nd of August after my solicitors letter had been sent asking the restriction owner to remove it, don't forget we already know it was unnecesary but the damage is done now and needs to be cleared up. They tried to amend the title on 20 Sept and discovered it.

loubel

You need to clarify with your solicitor what has happened. Your solicitor wrote to the Restriction owner asking them to remove it in July. Then in August what happened? You say something appeared on the title which no-one knew about until after exchange when your buyer's solicitors did their priority search revealing an application against the title. Who has applied to change the title? 

eddddy

I wonder if the comment about not paying rent is because...

• Your solicitor gave an undertaking to remove all charges on completion

• Your solicitor has been unable to remove a charge - therefore you cannot complete, and you are in breach of contract. Therefore your buyer can claim damages from you. 

• The damages would include the cost of renting accommodation until completion happens

• So, for example, they owe you, say,  £1000 per month in rent until completion. But you owe them £1000 per month in damages until completion.

So they are setting-off the £1000 per month they owe you, against the £1000 per month they believe you owe them.

Upset_Nanny

pinkshoes said:

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?

Yes I agree, I am still the owner and I intend to write to the tenant, but I am presently letting her stew over my morality question. As I say we have enjoyed a very good relationship over the past 10 years, so I will hold off bombarding her yet.
The solicitor left a long time between getting the first copy of the land registry and then again on the day of exchange found the outstanding application. I may query at what point did he allow exchange before or after he found it!
The part that took months was my solicitors letter getting to the party who had raised the 12 year old restriction and in the background the wheels had ben put in motion in raising the land registry application.
Yes I pointed out on 3 occasions it was time expired and so irrelevant but again by this time the letter had been sent.
Isn't it always the case, everything is OK until solicitors get involved!!

Upset_Nanny

loubel said:

You need to clarify with your solicitor what has happened. Your solicitor wrote to the Restriction owner asking them to remove it in July. Then in August what happened? You say something appeared on the title which no-one knew about until after exchange when your buyer's solicitors did their priority search revealing an application against the title. Who has applied to change the title? 

The letter took a long time to find the right person, so the application to remove it did not appear on the land registry database until 2 August. It was lodged by the people to raised the restriction 12 years ago. The buyers solicitor found it when he applied to change the title for completion to happen.

Upset_Nanny

sammyjammy said:

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!

Yes, once I have let her stew over my question of whether she thinks it is morally right not to pay I will put some legal arguments to her and suggest she takes advice from other avenues.

loubel

Thanks for clarifying. I don't think you have much choice then but to wait for this application to be completed. Your buyer won't complete the purchase while a third party has an application against the property. 

Upset_Nanny

eddddy said:

I wonder if the comment about not paying rent is because...

• Your solicitor gave an undertaking to remove all charges on completion

• Your solicitor has been unable to remove a charge - therefore you cannot complete, and you are in breach of contract. Therefore your buyer can claim damages from you. 

• The damages would include the cost of renting accommodation until completion happens

• So, for example, they owe you, say,  £1000 per month in rent until completion. But you owe them £1000 per month in damages until completion.

So they are setting-off the £1000 per month they owe you, against the £1000 per month they believe you owe them.

possibly, but at the moment I am concentrating on getting this entry removed, so we can at least move forward. Ithink I will need to revisit the legalities once we can get over that hurdle.

user1977

I'm not even sure what the point in exchanging contracts in advance for completion is for this sort of transaction, assuming it isn't linked to another one? The parties can just complete when they're good and ready to do so.