What should we do now, repossess flat or wait.

Our deceased brother sold one of his BTL flats 2 months before his death and became the lender, there is a charge on this property to validate that. The buyer however has not repaid any of this loan, which was due in full in November 2021, brother in law died in February 2021 so interest is mounting up and was set at 2% above the Bank of Englands rate.

My hubby is the executer of his estate and the only beneficiary, letters of administration have been granted.

Brother's main home was under threat of being repossessed however the buyer of his flat was desperate to acquire this property too and we had little option but to accept his offer and the sale was completed in February 2023.

The promise was to remortgage the main home and pay the debt he owed from the flat purchase within 6 months, which has now passed.

There were three charges on the main home, two of which we have paid off leaving one, this was an overdraft facility with Northern Rock and no one so far that we and our solicitor have approached will admit they own this.

The buyer is now stating that they can't remortgage until that charge is removed so he can't pay the debt back to the estate. The amount owed is substantial, should we just take him to court and repossess the flat, we are in our 80's and the whole scenario is stressing us out.

Our solicitor has said the judge may look favourably on the buyer simply because he did us  favour by purchasing the main property before it was repossessed.


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Comments

  • gwynlas
    gwynlas Posts: 1,624
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    Are you sure that your solicitor is acting in your best interests? I am not legally qualified in any way but a businessman purchasing a property before repossession is simply grabbing a bargain rather than doing you a favour. Sorry that it is taking so long to sort out your brothers estate. I hope that someone with more knowledge of NR and secured charges comes along to advise
  • MWT
    MWT Posts: 9,140
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    tanmich said:
    The buyer is now stating that they can't remortgage until that charge is removed so he can't pay the debt back to the estate. The amount owed is substantial, should we just take him to court and repossess the flat, we are in our 80's and the whole scenario is stressing us out.

    Our solicitor has said the judge may look favourably on the buyer simply because he did us  favour by purchasing the main property before it was repossessed.

    I wouldn't characterise it as 'doing you a favour' but you did agree to make his payment of the amount owed on the flat being deferred until he had a mortgage on the other property, but have failed to deliver a clear title to him on that property...

    How was the sale of that 2nd property completed in February 2023 with the charges still in place? ... and has he already paid whatever the purchase price was agreed to be?

  • silvercar
    silvercar Posts: 46,778
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    You need to get the northern rock charge released. Either from whoever now owns it, or finding the way to do this if no-one eligible claims to own it. There must be a way or removing charges from extinct organisations.
    I'm a Forum Ambassador on The Coronavirus Boards as well as the housing, mortgages and student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to [email protected] (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.
  • tanmich
    tanmich Posts: 37
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    MWT
    Thank you for your reply,
    For further clarification the buyers initial intention was to raise sufficient funds to buy the main home and repay the loan on the flat at the same time however when we were almost at completion he recinded and stated he was unable to do so due to higher interests rates.

    At that stage we were at the point of no return, the mortgager had accepted his offer and agreed to delay repossession whilst the sale went ahead.

    We duly contacted the charge holders of the property and paid them but one re Northern Rock remained outstanding as no one we nor our solicitors contacted had records relating to it. It was a meagre sum due to an unpaid overdraft facility.

    The buyers solicitor and our own solicitor are still trying to solve the situation with no joy whatsoever.

    In the mean time the buyer has spent vast amounts on the renovation of what was the family home.

    He was initially give one year to pay off the loan on the flat so should have paid the debt back in November 2021 and we have all the legal documents to prove that, we are suspicious however that on the death of brother he hoped no one would ever challenge the debt.

    Brother never married and had no children, died intestate and was estranged from us for many years, long story which is irrelevant to this problem.
     
  • tanmich
    tanmich Posts: 37
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    silvercar

    Exactly but that's where the problem lies, no one wants to own this debt, which is a very meagre amount of money.

  • MWT
    MWT Posts: 9,140
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    edited 7 October 2023 at 7:25PM
    tanmich said:
    MWT

    We duly contacted the charge holders of the property and paid them but one re Northern Rock remained outstanding as no one we nor our solicitors contacted had records relating to it. It was a meagre sum due to an unpaid overdraft facility.

    The buyers solicitor and our own solicitor are still trying to solve the situation with no joy whatsoever.

    In the mean time the buyer has spent vast amounts on the renovation of what was the family home.
     
    Still not clear what actually happened, as if the last charge has not been removed the sale would not normally have completed, and if the sale has not actually completed yet why is the buyer in the property carrying out renovations...?

    If the buyer and his solicitor agreed to complete anyway as it was a cash sale, I'd have expected them to include an obligation on the estate to deliver clear title so they could get a mortgage...

    tanmich said:

    He was initially give one year to pay off the loan on the flat so should have paid the debt back in November 2021 and we have all the legal documents to prove that, we are suspicious however that on the death of brother he hoped no one would ever challenge the debt.
    Your problem is that from what you have said, you agreed to change those payment terms and make the payment in some way conditional upon the buyer obtaining a mortgage...

    A lot depends on what exactly you have agreed with the buyer and how it was documented...



  • tanmich
    tanmich Posts: 37
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    MWT

    Buyer raised a mortgage on his other properties to purchase family home and sale was completed in February 2023 with the undertaking by the solicitor that every endeavour would be made to identify the owner of the remaining charge.

    We were never in favour of selling the property without the debt the buyer owed on his flat being paid first and informed our solicitor of this on numerous occasions both verbally and in writing.

    Solicitor recommended that our biggest priority should be to sell the family home before it was repossessed even with the last charge still in place.

    He knew full well that our utmost concern was that the buyer would find some way to wriggle out of the payment of this debt. Plus in not discharging the outstanding charge on the family home this would give the buyer the ample ammunition to do exactly what he is doing now.

    Brother owned a buy to let property consisting of 3 flats, he sold 2 to this buyer in 2019 to pay off his mortgage debts, once again the buyer couldn't acquire enough money to cover the cost of those 2 flats and an agreement was made for stage payments, we have no clue as to whether those payments were made nor who too.

    The final flat is the one we have all the paperwork for, buyer also tried to wriggle out of paying interest on the loan and yes this is well documented.




  • silvercar
    silvercar Posts: 46,778
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    I’d suggest posting on this thread: https://forums.moneysavingexpert.com/discussion/5685941/land-registry-questions/p510

    to ask the Land Registry rep how you remove a charge that no one claims to own.
    I'm a Forum Ambassador on The Coronavirus Boards as well as the housing, mortgages and student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to [email protected] (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.
  • MWT
    MWT Posts: 9,140
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    Certainly worth posting there, but I seem to recall that in similar cases it is going to need a court ruling as the Land Registry does not make decisions on these matters it only implements the documents and court orders it receives...
  • MWT
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    tanmich said:
    Buyer raised a mortgage on his other properties to purchase family home and sale was completed in February 2023 with the undertaking by the solicitor that every endeavour would be made to identify the owner of the remaining charge.
    The exact wording of this will be important, 'reasonable endeavours' for example would be a very different prospect to 'best endeavours'.
    You have probably met the standard for 'reasonable' already, but if it was 'best' or 'every' as you stated above, then you are probably going to have to go to court at your expense to get that last charge removed before you'd have much chance of getting any enforcement action on the outstanding payments due from the buyer.
    The exact wording on what you have agreed in terms of that outstanding payment will matter as well of course, but if it was agreed to wait for a mortgage to be raised on the recently sold property then you do seem stuck for the moment...

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