PLEASE READ BEFORE POSTING

Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. Thank you for your understanding.

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

123578

Comments

  • user1977
    user1977 Posts: 13,972 Forumite
    First Anniversary First Post Name Dropper Combo Breaker
    baccalad said:
    GDB2222 said:
    baccalad said:
    So I just spoke with my mortgage adviser at Lloyds (I applied direct). There are some notes on my file to say that my solicitor has advised on the current situation with the loan, and someone from Lloyds' post-offer team has spoken with someone at legal, and legal came back and said that it "poses no risk to our security", and that they're happy to proceed.
    So, the bank aren't worried about their security. How do you feel about it?


    I'm leaning towards, that if it's good enough for the bank, then it should be good enough for me too.

    If the bank legitimately thought there was even the slimmest of possibilities that another lender could come chasing me for money and seize items from the property (fixtures and fittings), then that by very definition would be something that affects their security, surely? And if that were the case I imagine they wouldn't touch it with a barge pole.
    Has your solicitor actually come up with any legal argument suggesting that a creditor could turn up and repossess bits of the house?
  • Gavin83
    Gavin83 Posts: 8,746 Forumite
    Name Dropper First Post First Anniversary
    silvercar said:
    When we bought our current home, the seller had to do some work before exchange to get sign off on building regs. This they did, promising the trades that they would pay for it from the proceeds of the house. They never paid and went bankrupt within weeks of completing on the sale. A couple of the trades asked us if we would like to pay (No, we wouldn't), but they didn't threaten to come and remove materials as that would be trespass and the sellers no longer owned the materials.

    In your shoes, I wouldn't worry.
    However the vendor cannot sell something they don’t own. Fine if they’ve taken out a loan or the home improvements such as in your case. If someone takes out a HP agreement and they fail to pay the company can turn up and rip it out of your house though as you don’t own it, nor did the vendor. Theres another thread on here recently about a garage which is along the same lines.

    I’m genuinely curious how they went bankrupt so quickly though. What happened to the proceeds of the sale? To be honest your vendor sounds like a nightmare and a completely dodgy character so you’re lucky your purchase went without a hitch.

    So OP, did you establish it was just an ordinary loan? If so then you’ve really nothing to worry about.
  • Hoenir
    Hoenir Posts: 1,990 Forumite
    First Post Name Dropper
    baccalad said:
    GDB2222 said:
    baccalad said:
    So I just spoke with my mortgage adviser at Lloyds (I applied direct). There are some notes on my file to say that my solicitor has advised on the current situation with the loan, and someone from Lloyds' post-offer team has spoken with someone at legal, and legal came back and said that it "poses no risk to our security", and that they're happy to proceed.
    So, the bank aren't worried about their security. How do you feel about it?


    I'm leaning towards, that if it's good enough for the bank, then it should be good enough for me too.

    If the bank legitimately thought there was even the slimmest of possibilities that another lender could come chasing me for money and seize items from the property (fixtures and fittings), then that by very definition would be something that affects their security, surely? And if that were the case I imagine they wouldn't touch it with a barge pole.
    The bank is providing the mortgage. That's where their interest lies. Your solicitor has probably been informed of their decision as well by now.. 
  • badmemory
    badmemory Posts: 7,734 Forumite
    First Anniversary Name Dropper First Post
    Being the cynic that I am.  I would rather believe what a mortgage giver says than what a solicitor says.  But that could be because an ignorant solicitor almost did me out of half a house.  Thanks Dad for getting it right.  But it is a bad job when your over 70 father knows the law better than your solicitor, without google.
  • baccalad
    baccalad Posts: 14 Forumite
    First Post First Anniversary Combo Breaker
    edited 17 November 2023 at 11:12PM
    user1977 said:
    baccalad said:
    GDB2222 said:
    baccalad said:
    So I just spoke with my mortgage adviser at Lloyds (I applied direct). There are some notes on my file to say that my solicitor has advised on the current situation with the loan, and someone from Lloyds' post-offer team has spoken with someone at legal, and legal came back and said that it "poses no risk to our security", and that they're happy to proceed.
    So, the bank aren't worried about their security. How do you feel about it?


    I'm leaning towards, that if it's good enough for the bank, then it should be good enough for me too.

    If the bank legitimately thought there was even the slimmest of possibilities that another lender could come chasing me for money and seize items from the property (fixtures and fittings), then that by very definition would be something that affects their security, surely? And if that were the case I imagine they wouldn't touch it with a barge pole.
    Has your solicitor actually come up with any legal argument suggesting that a creditor could turn up and repossess bits of the house?
    That's honestly pretty much the gist of what I've been told, that the property has outstanding credit, and that I could end up with a CCJ in my name and bailiffs seizing the items.

    There was so much back and forth between both solicitors and the estate agent. I do understand that the agent's only interest is to get the property sold, and that they do not work for me. With that being said, the agent pretty much demanded several times to know how and why it was an issue, with the loan not being secured against the property, and no more reasoning was given that what I've already mentioned above.

    At the time I decided it wasn't worth going back and forth with my solicitor myself, and to go ahead and see what the bank said and then once I'd had a decision from the bank, to go from there.

    FWIW, I don't believe my bank has actually seen any documentation to do with the loan; my mortgage advisor was able to see all the notes on my file including some attachments - I asked her to look at the attachments to see if there was any loan documentation, and they weren't to do with that. She was able to see the wording my solicitor had used and read it all out to me - that the items are "financed" and the seller doesn't own them outright, and won't be paying them off upon completion. There was no mention of hire purchase.
  • silvercar
    silvercar Posts: 46,942 Ambassador
    Academoney Grad Name Dropper Photogenic First Anniversary
    Gavin83 said:
    silvercar said:
    When we bought our current home, the seller had to do some work before exchange to get sign off on building regs. This they did, promising the trades that they would pay for it from the proceeds of the house. They never paid and went bankrupt within weeks of completing on the sale. A couple of the trades asked us if we would like to pay (No, we wouldn't), but they didn't threaten to come and remove materials as that would be trespass and the sellers no longer owned the materials.

    In your shoes, I wouldn't worry.
    However the vendor cannot sell something they don’t own. Fine if they’ve taken out a loan or the home improvements such as in your case. If someone takes out a HP agreement and they fail to pay the company can turn up and rip it out of your house though as you don’t own it, nor did the vendor. Theres another thread on here recently about a garage which is along the same lines.

    I’m genuinely curious how they went bankrupt so quickly though. What happened to the proceeds of the sale? To be honest your vendor sounds like a nightmare and a completely dodgy character so you’re lucky your purchase went without a hitch.

    So OP, did you establish it was just an ordinary loan? If so then you’ve really nothing to worry about.
    Laws of trespass still apply, I guess also the ability to remove supports from a roof are not that easy and access through a new owners home would be difficult to say the least.

    I presumed the bankruptcy was pre-planned: sell-up, secure a long term rental, squirrel away some of the proceeds and then go bankrupt. It may have been that they were made bankrupt as opposed to declaring themselves. As the only connection was seller/ buyer relationship I don't know all the details other than bailiffs turning up at my door.
    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 forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.
  • The "solicitor" the OP refers to might just be a conveyancing assistant in a cheapo online only conveyancing firm hence the lack of knowledge & understanding.
    Signature on holiday for two weeks
  • GDB2222
    GDB2222 Posts: 24,609 Forumite
    Name Dropper First Post First Anniversary
    edited 18 November 2023 at 1:10PM
    Don’t we all feel sorry for the estate agent? They want their commission in time for Christmas. It must be frustrating!




    No reliance should be placed on the above! Absolutely none, do you hear?
  • GDB2222 said:
    Don’t we all feel sorry for the estate agent? They want their commission in time for Christmas. It must be frustrating!




    They quite literally turn feral at this time of year - if only they realised that the solicitors firm staff they are rude to in their misguided efforts to “drive things forward” have VERY long memories… 😆
    🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
    Balance as at 01/09/23 = £115,000.00
    Balance as at 31/12/23 = £112,000.00
    SOA CALCULATOR (for DFW newbies): SOA Calculator
    she/her
  • A personal loan is a contract between the financier and the person taking the loan. If they buy 'home improvements' with it and then later default, the home improvements have been paid for so nobody is going to turn up to rip stuff out or scrape wallpaper off walls. The finance co will however go after the person who owes them the money, getting a repayment plan or attachment of earnings or ultimately sending bailffs around (to THEIR home, not some place they used to live at).

    HP is different, yes, but I'm pretty sure you can only get HP on items that are easily recoverable and have resale value, such as a car. Nobody is going to rip out home fixtures and sell them to someone else.
Meet your Ambassadors

Categories

  • All Categories
  • 343.1K Banking & Borrowing
  • 250.1K Reduce Debt & Boost Income
  • 449.6K Spending & Discounts
  • 235.2K Work, Benefits & Business
  • 607.8K Mortgages, Homes & Bills
  • 173K Life & Family
  • 247.8K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards