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

user1977

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

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

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

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

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

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.

Mutton_Geoff

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.

GDB2222

Don’t we all feel sorry for the estate agent? They want their commission in time for Christmas. It must be frustrating!

EssexHebridean

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… 😆

NameUnavailable

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.