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Seller took out a personal loan for home improvements, can I be held liable?

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Comments

  • saajan_12
    saajan_12 Posts: 3,621 Forumite
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    The key is just whether its really an unsecured personal loan or if its secured against the property. That's a legal question, that the solicitors need to sort out and prove one way or another. 
    If it is secured, then your lender will refuse anyway, as they'll want to be primary charge. So the enforcement possibilities and what the loan paid for are all moot. 
  • user1977
    user1977 Posts: 13,993 Forumite
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    GDB2222 said:
    user1977 said:
    Mark_d said:

    However it is possible that if the loan is not repaid, the lender could seek to remove the fitted wardrobes, boiler etc.
    No, that isn't possible. Have you ever seen someone try to "repossess" double glazing etc? It becomes part of the property.
    If say the boiler is under a hire purchase agreement, are you saying that the HP company can't get its boiler back because it has been attached to the property? Well, you are saying that, and for all I know you may be right!

    However, I would not suggest to the OP that they disregard the carefully considered advice of their solicitor in favour of advice from some anonymous bloke on the internet. :)
    Yes, and in any event I've never heard of boilers being on hire purchase agreements (as opposed to being bought with money borrowed by the home owner). You may wish to consider why solicitors never raise such queries about unsecured credit agreements by the vendors.

    As I said above, if the OP can share their solicitor's rationale, we will all be most amused educated.
  • artyboy
    artyboy Posts: 875 Forumite
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    GDB2222 said:
    user1977 said:
    Mark_d said:

    However it is possible that if the loan is not repaid, the lender could seek to remove the fitted wardrobes, boiler etc.
    No, that isn't possible. Have you ever seen someone try to "repossess" double glazing etc? It becomes part of the property.
    If say the boiler is under a hire purchase agreement, are you saying that the HP company can't get its boiler back because it has been attached to the property? Well, you are saying that, and for all I know you may be right!

    However, I would not suggest to the OP that they disregard the carefully considered advice of their solicitor in favour of advice from some anonymous bloke on the internet. :)
    ...although as I'm sure you're aware, HP is a form of secured loan, so whether or not a boiler could be repossessed under that arrangement isn't really relevant here.

    Assuming of course that the OP is certain that this was an unsecured personal loan. In which case I'm going to agree with others and say get a new/competent solicitor!
  • user1977 said:
    GDB2222 said:
    user1977 said:
    Mark_d said:

    However it is possible that if the loan is not repaid, the lender could seek to remove the fitted wardrobes, boiler etc.
    No, that isn't possible. Have you ever seen someone try to "repossess" double glazing etc? It becomes part of the property.
    If say the boiler is under a hire purchase agreement, are you saying that the HP company can't get its boiler back because it has been attached to the property? Well, you are saying that, and for all I know you may be right!

    However, I would not suggest to the OP that they disregard the carefully considered advice of their solicitor in favour of advice from some anonymous bloke on the internet. :)
    Yes, and in any event I've never heard of boilers being on hire purchase agreements (as opposed to being bought with money borrowed by the home owner). You may wish to consider why solicitors never raise such queries about unsecured credit agreements by the vendors.

    As I said above, if the OP can share their solicitor's rationale, we will all be most amused educated.
    I did ask my solicitor to confirm that there is no charge against the title, and they confirmed that that is correct. I also asked how they came to find out about the loan in the first place, and they said they raised an enquiry asking if any items in the property are subject to any credit or hire purchase agreement.
  • baccalad
    baccalad Posts: 14 Forumite
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    edited 13 November 2023 at 6:23PM
    There's been quite a bit of back and forth between my solicitor, the seller's solicitor and the estate agent. With my solicitor saying how can you expect my client to purchase a property with outstanding credit, and if the seller can't afford to pay it off outright, then it should either be deducted from the sale proceeds and put in their TA13 or as an allowance on completion.

    The seller's solicitor saying that they've explained the situation several times to the client and their answer remains the same, that they will not be paying it off, as it's a personal loan and she wants to pay it off gradually.

    The estate agent has also inputted to say that they've checked with their company solicitor and an independent solicitor and both are advising that as long as the loan is not secured against the title of the property, then there is no problem.

    My solicitor has gone ahead and informed my lender and I'm still waiting to hear back with a decision, apparently they've asked for further information.
  • baccalad said:
    There's been quite a bit of back and forth between my solicitor, the seller's solicitor and the estate agent. With my solicitor saying how can you expect my client to purchase a property with outstanding credit, and if the seller can't afford to pay it off outright, then it should either be deducted from the sale proceeds and put in their TA13 or as an allowance on completion.

    The seller's solicitor saying that they've explained the situation several times to the client and their answer remains the same, that they will not be paying it off, as it's a personal loan and she wants to pay it off gradually.
    if, say the boiler is on hire purchase (HP) and she refuses to pay off the debt with the sales proceeds, then she effectively sells you the property but not the boiler. I would simply ask her to then remove the boiler and deduct the costs of such boiler from the price as she is not selling it to you (she cant as it is still under HP)

  • user1977
    user1977 Posts: 13,993 Forumite
    First Anniversary First Post Name Dropper Combo Breaker
    baccalad said:
    There's been quite a bit of back and forth between my solicitor, the seller's solicitor and the estate agent. With my solicitor saying how can you expect my client to purchase a property with outstanding credit, and if the seller can't afford to pay it off outright, then it should either be deducted from the sale proceeds and put in their TA13 or as an allowance on completion.

    The seller's solicitor saying that they've explained the situation several times to the client and their answer remains the same, that they will not be paying it off, as it's a personal loan and she wants to pay it off gradually.
    if, say the boiler is on hire purchase (HP) and she refuses to pay off the debt with the sales proceeds, then she effectively sells you the property but not the boiler. I would simply ask her to then remove the boiler and deduct the costs of such boiler from the price as she is not selling it to you (she cant as it is still under HP)

    But as far as we know, nothing is even on HP. Like I said, it's rarely encountered for things you'd find inside a house, and wouldn't be competent for items which are incorporated into the building (when have you ever heard of somebody having their boiler repossessed?!).
  • Hoenir
    Hoenir Posts: 2,008 Forumite
    First Post Name Dropper
    baccalad said:


    The seller's solicitor saying that they've explained the situation several times to the client and their answer remains the same, that they will not be paying it off, as it's a personal loan and she wants to pay it off gradually.


    Initially you said. 

    The seller of the house I'm in the process of purchasing has a personal loan of around £15k which was taken out for home improvements. I believe it was for fitted wardrobes, a conservatory roof replacement and possibly a new boiler.

    Whereas now transpires the boiler is on some form of hire purchase agreement. Therefore unlikely that there is just the one loan arrangement in place. There may well be a clause in the HP contract that the debt has to be settled if the property is sold. Does the finance agreement cover breakdown cover and annual servicing costs? 

    As the buyer you can play hardball as well. Effectively you are paying for something the seller doesn't own outright. 
  • GDB2222
    GDB2222 Posts: 24,643 Forumite
    Name Dropper First Post First Anniversary
    edited 13 November 2023 at 7:03PM
    baccalad said:
    user1977 said:
    GDB2222 said:
    user1977 said:
    Mark_d said:

    However it is possible that if the loan is not repaid, the lender could seek to remove the fitted wardrobes, boiler etc.
    No, that isn't possible. Have you ever seen someone try to "repossess" double glazing etc? It becomes part of the property.
    If say the boiler is under a hire purchase agreement, are you saying that the HP company can't get its boiler back because it has been attached to the property? Well, you are saying that, and for all I know you may be right!

    However, I would not suggest to the OP that they disregard the carefully considered advice of their solicitor in favour of advice from some anonymous bloke on the internet. :)
    Yes, and in any event I've never heard of boilers being on hire purchase agreements (as opposed to being bought with money borrowed by the home owner). You may wish to consider why solicitors never raise such queries about unsecured credit agreements by the vendors.

    As I said above, if the OP can share their solicitor's rationale, we will all be most amused educated.
    I did ask my solicitor to confirm that there is no charge against the title, and they confirmed that that is correct. I also asked how they came to find out about the loan in the first place, and they said they raised an enquiry asking if any items in the property are subject to any credit or hire purchase agreement.

    If an item in the property is subject to a credit or hire purchase agreement, that implies that it is owned by another party until paid for in full, or it is collateral for a loan. That's what the question your solicitor asked means. And the vendor answered yes.

    It is quite likely the vendor misunderstood the question, and I would check that out.  However, if the answer is correct, then I think there is a genuine problem. If your vendor stops making payments, there is a possibility at least in theory that some third party can come and remove the boiler or maybe the conservatory roof. More likely, they will try to get you to pay the vendor's debt.

    I would start off by checking whether the vendor has answered the question correctly. 

    By the way, it's preposterous that the vendor's estate agent is purporting to provide you with legal advice. Ignore that, for a start. 

    No reliance should be placed on the above! Absolutely none, do you hear?
  • user1977
    user1977 Posts: 13,993 Forumite
    First Anniversary First Post Name Dropper Combo Breaker
    Hoenir said:
    baccalad said:


    The seller's solicitor saying that they've explained the situation several times to the client and their answer remains the same, that they will not be paying it off, as it's a personal loan and she wants to pay it off gradually.
    Whereas now transpires the boiler is on some form of hire purchase agreement.
    Where are you getting that from?
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