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

Hamlet22

Lack of legal access is covered by legal indemnity insurance. Policies designed to cover just that. What did the lawyer say to put off the lender - I'd want to see what they wrote.

TBG01

Hamlet22 said:

Lack of legal access is covered by legal indemnity insurance. Policies designed to cover just that. What did the lawyer say to put off the lender - I'd want to see what they wrote.

Solicitor: There's an issue with the Title in respect of access to the property. Will you accept a Declaration and Indemnity Policy?

Lender: No.

It's not then on the Solicitor to try and persuade the lender to change their policies.

It's not appreciated by some that the Solcitor is also acting for the lender. When submitting the certificate of title to draw down the mortgage funds, they're submitting it on the basis the lender is getting a valid title. In this instance they're not, hence referring it to them, as they are required to do so. 

Hamlet22

TBG01 said:

Hamlet22 said:

Lack of legal access is covered by legal indemnity insurance. Policies designed to cover just that. What did the lawyer say to put off the lender - I'd want to see what they wrote.

Solicitor: There's an issue with the Title in respect of access to the property. Will you accept a Declaration and Indemnity Policy?

Lender: No.

It's not then on the Solicitor to try and persuade the lender to change their policies.

It's not appreciated by some that the Solcitor is also acting for the lender. When submitting the certificate of title to draw down the mortgage funds, they're submitting it on the basis the lender is getting a valid title. In this instance they're not, hence referring it to them, as they are required to do so. 

Conveyancer: There's an issue with the Title in respect of access to the property. Will you accept a Declaration and Indemnity Policy?

Lender: no (would any of us, as terribly vague and almost alarming)

OR-------

Conveyancer: The property deeds are silent on giving it a legal right of way over the main roadway access, nor is it a public highway - but we have sworn statements of vehicular and pedestrian access without issues for [x years]. We shall back that up with legal indemnity insurance too, to the value of the property. Are we free to proceed?

Lender: yes, if the legal insurance protects us as per the UK Finance Handbook

MorecambeBay82

@GDB2222 Here are a couple of things I read... Just to be clear I don't have the belief on this it's more I'm  confused.  Hence why I've posted on here. I'm referring to reading the things below that have left me with more questions...

'Buyer beware' and the duty to disclose defects in title - Walker Morris

What must a seller disclose when selling a property? | Quittance.co.uk®

Don't fall foul of the disclosure laws when selling or letting a property (landlordzone.co.uk)

“Buyer beware” vs the duty of disclosure when selling a property - IBB Law

 

user1977

MorecambeBay82 said:

@GDB2222 Here are a couple of things I read... Just to be clear I don't have the belief on this it's more I'm  confused.  Hence why I've posted on here. I'm referring to reading the things below that have left me with more questions...

What questions? As I (and others) have said, it isn't that much of a problem. If it's never caused the vendors (and their neighbours) a problem when buying/selling/mortgaging, why would they be obliged to highlight it to you as being some sort of material issue?

GDB2222

MorecambeBay82 said:

@GDB2222 Here are a couple of things I read... Just to be clear I don't have the belief on this it's more I'm  confused.  Hence why I've posted on here. I'm referring to reading the things below that have left me with more questions...

'Buyer beware' and the duty to disclose defects in title - Walker Morris

What must a seller disclose when selling a property? | Quittance.co.uk®

Don't fall foul of the disclosure laws when selling or letting a property (landlordzone.co.uk)

“Buyer beware” vs the duty of disclosure when selling a property - IBB Law

 

The regulations referred to in those articles apply to transactions between a trader and a consumer. You said your flat is owned by a developer, but that does not necessarily mean he is selling it in the course of his trade. 

I doubt the regulations would apply to a property transaction between two consumers, although they might apply to the professionals involved.

In any case, I'm sure there was a shedload of money involved in the Mahil case, and the legal fees must have been huge. Whilst it must be really annoying for you to have invested so much time etc, I doubt that you have paid out more than £2-3k in fees, say? That's not worth fighting a legal battle over. So, all you can do is make a formal complaint to the estate agent, and see whether they offer to reimburse you. 

[Deleted User]

I don't think any reliance could be placed on the Mahil case for the situation here.

My understanding of Mahil is that the buyer refused to complete the contract established at auction and the seller later sold at a lower price to another buyer and claimed the shortfall from the original buyer due to breach of contract. 

In the OP's situation he is the buyer but does not yet have a contract in place because pre-contract due diligence has established issues with the title. 

Sistergold

MorecambeBay82 said:

Thanks @Cloth_of_Gold.
I suppose I'm still at the stage where I haven't put all emotional investment aside.  If there is a way through with an alternative lender that tells me it would be possible to sell in the future.  Also, we don't want to buy a property that is valued incorrectly with these issues brought to light.
I appreciate everyone @user1977 and @Emily_Joy responding when we feel confused with what's going on and adding their perspective.

It is best the issues get sorted if there is a way to.  Getting a mortgage now does not guarantee getting  future mortgages as the trend is that society just gets tighter with the law as time progresses. Don’t take over someone else’s problem. Even if you get a mortgage now it will always probably be a nightmare down the line?