Days before exchange of contracts we find lenders won't lend based on defective title. Any thoughts?

MorecambeBay82

Thanks @Tiglet2
You're giving some helpful insight into how things work in the process between other parties involved.  I appreciate you taking time to explain this.  Looks like a live and learn situation right now.  Thanks again.

Tiglet2

Emily_Joy said:

Tiglet2 said:

Unfortunately, as you now know, agreeing a completion date with the seller without knowing what might come up during the conveyancing, has little leverage. 

I believe they agreed on the date of exchange of contracts, not completion date.

Makes no difference.  Dates are never set for exchange.  Dates are set for completion.  There can be no exchange until all enquiries are satisfactorily answered and you cannot exchange without a date for completion (unless a new build).

Emily_Joy

MorecambeBay82 said:

 So... on Monday I requested a copy of the TA6 form filled in by the seller from our solicitor. 

Which Monday? I would expect the solicitor to send you the TA6 form as well as a copy of the title report months before exchange.

Emily_Joy

Tiglet2 said:

Makes no difference.  Dates are never set for exchange.  Dates are set for completion.  There can be no exchange until all enquiries are satisfactorily answered and you cannot exchange without a date for completion (unless a new build).

It does make a difference. If you pull out after exchange you lose financially significantly more.

Tiglet2

housebuyer143 said:

loubel said:

You don't have any recourse for costs, no. Your solicitor has done their job in investigating the title and found that it doesn't meet the criteria of your lender. That is your cost to bear.

I am surprised that 15 years of use along with title insurance is not sufficient for your lender but that does remind you that insurance does not resolve issues and even if your lender accepted it you may still have had problems with remortgaging or selling in the future due to this issue. Worth considering before looking for a different lender.

Isn't the title the first thing they look at though? Should it have got this close to exchange without being flagged?

Yes the title is one of the first things they look at when they receive the draft contract pack.  BUT, there are probably other documents to look at which are referenced in that title.  OP's solicitor may well have asked for additional Transfers/Conveyances to review during their initial enquiries, hoping that one of the other documents would contain suitable rights.  OP's solicitor may well have asked for clarification on the rights to cross land on several occasions.  There probably would have been a lot of backward and forward correspondence in this regard, with reference to vendor or Land Registry, to the point that OP's solicitor is still not satisfied with the responses.  

So, while it is correct that the title would be looked at early on, it is the responses to enquiries and the provision of suitable evidence which has not been forthcoming that has delayed this transaction.  Bear in mind also, that OP is not "this close to exchange".  Exchange cannot be discussed until the enquiries are satisfied.  This transaction has not satisfied its enquiries and therefore is not close to exchange.

Tiglet2

Emily_Joy said:

Tiglet2 said:

Makes no difference.  Dates are never set for exchange.  Dates are set for completion.  There can be no exchange until all enquiries are satisfactorily answered and you cannot exchange without a date for completion (unless a new build).

It does make a difference. If you pull out after exchange you lose financially significantly more.

The OP hasn't exchanged.

MorecambeBay82

@Emily_Joy.  Monday - Two days ago but my partner had received a copy from the solicitors way back.  I don't know that we received a title report.  Neither of us have experience of selling property.  I requested it 2 days ago in case I could look with more informed eyes since we had the bad news on Thursday

Tiglet2

@MorecambeBay82 You won't receive a Title Report until the solicitors are nearly ready to exchange.  That's when they produce a large document that tells you everything they have found out about the property.  They often send the contract and mortgage deed together with the report for your signature.  

Emily_Joy

MorecambeBay82 said:

@Emily_Joy.  Monday - Two days ago but my partner had received a copy from the solicitors way back.  I don't know that we received a title report.  Neither of us have experience of selling property.  I requested it 2 days ago in case I could look with more informed eyes since we had the bad news on Thursday

When your partner received a copy from the solicitors way back, the copy presumably came with the request from the solicitor to read it very carefully (ours contained about 200 pages, and included results from the searches) and raise any concerns. Was it not so?

GDB2222

@MorecambeBay82 I am confused by your comments:
" I'm reading that caveat emptor princeple was essentially reversed not just with the Protection of Consumer Rights Act 2008 and with a number of cases where land and property were sold without clear knowledge of potential risks to value, development and future sale.  
This is not the situation we're in because the purchase has not been made but... various legal articles are saying that with the act and won cases in the buyers favour, effort has to be made to draw attention to those things mentioned above (especially with cash sales).  I'm hoping for some clarity on this... Whether it has become law to 'Make the buyer beware' or whether this is a grey area."

I think that caveat emptor still applies with house purchase. Do you have any references for your belief it doesn't apply any longer?