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

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  • fatbelly
    fatbelly Posts: 20,448 Forumite
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    baccalad said:
    I’ve only just managed to be able to get in contact with my solicitor today. I explained how I understand what they’re saying could happen, but I asked if they could explain to me the legal aspect of why it could happen, as I still don’t understand how I can become liable for their loan if I buy the house. They just reiterated the same point about items being financed and not owned outright, and how I wouldn’t own them and they could be seized if the seller stopped paying for them.
    Which is true if the items were hire purchase because you don't own them until the final payment. 'Hire', and 'Purchase', see?

    It's not true if they bought stuff with a personal loan. ...
  • user1977
    user1977 Posts: 13,963 Forumite
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    fatbelly said:
    baccalad said:
    I’ve only just managed to be able to get in contact with my solicitor today. I explained how I understand what they’re saying could happen, but I asked if they could explain to me the legal aspect of why it could happen, as I still don’t understand how I can become liable for their loan if I buy the house. They just reiterated the same point about items being financed and not owned outright, and how I wouldn’t own them and they could be seized if the seller stopped paying for them.
    Which is true if the items were hire purchase because you don't own them until the final payment. 'Hire', and 'Purchase', see?

    It's not true if they bought stuff with a personal loan. ...
    And as discussed above, even if they were on HP (which they wouldn't have been...) the items in question are now  fixtures incorporated into the real property. So the creditors couldn't come and chisel them out, if anyone it's the mortgage lenders who have a charge over them.
  • user1977 said:
    fatbelly said:
    baccalad said:
    I’ve only just managed to be able to get in contact with my solicitor today. I explained how I understand what they’re saying could happen, but I asked if they could explain to me the legal aspect of why it could happen, as I still don’t understand how I can become liable for their loan if I buy the house. They just reiterated the same point about items being financed and not owned outright, and how I wouldn’t own them and they could be seized if the seller stopped paying for them.
    Which is true if the items were hire purchase because you don't own them until the final payment. 'Hire', and 'Purchase', see?

    It's not true if they bought stuff with a personal loan. ...
    And as discussed above, even if they were on HP (which they wouldn't have been...) the items in question are now  fixtures incorporated into the real property. So the creditors couldn't come and chisel them out, if anyone it's the mortgage lenders who have a charge over them.
    Yeah, I mean I even asked in the same conversation, “doesn’t it depend on the type of finance, such as hire purchase as opposed to other types?” - and I didn’t get an answer. She just kind of swerved the question… At what point do you start arguing, kicking off and demanding an answer and some kind of proper legal explanation?

    FWIW in the original email chain I even have evidence of the seller’s solicitor saying it’s a personal loan.
  • housebuyer143
    housebuyer143 Posts: 3,313 Forumite
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    edited 23 November 2023 at 9:59PM
    baccalad said:
    user1977 said:
    fatbelly said:
    baccalad said:
    I’ve only just managed to be able to get in contact with my solicitor today. I explained how I understand what they’re saying could happen, but I asked if they could explain to me the legal aspect of why it could happen, as I still don’t understand how I can become liable for their loan if I buy the house. They just reiterated the same point about items being financed and not owned outright, and how I wouldn’t own them and they could be seized if the seller stopped paying for them.
    Which is true if the items were hire purchase because you don't own them until the final payment. 'Hire', and 'Purchase', see?

    It's not true if they bought stuff with a personal loan. ...
    And as discussed above, even if they were on HP (which they wouldn't have been...) the items in question are now  fixtures incorporated into the real property. So the creditors couldn't come and chisel them out, if anyone it's the mortgage lenders who have a charge over them.
    Yeah, I mean I even asked in the same conversation, “doesn’t it depend on the type of finance, such as hire purchase as opposed to other types?” - and I didn’t get an answer. She just kind of swerved the question… At what point do you start arguing, kicking off and demanding an answer and some kind of proper legal explanation?

    FWIW in the original email chain I even have evidence of the seller’s solicitor saying it’s a personal loan.
    I would just move on. You have clearly researched it much more than they have and it seems almost certain that no one is coming to tipi out your boiler? Surely they need a warrant to come into your home...

    Some solicitors haven't a clue. I had to go over mines head during my purchase over something she didn't understand which had us going in circles for 2 weeks! 
  • Hoenir
    Hoenir Posts: 1,959 Forumite
    First Post Name Dropper
    edited 23 November 2023 at 10:04PM
    baccalad said:


    FWIW in the original email chain I even have evidence of the seller’s solicitor saying it’s a personal loan.
    The solicitor will relay on the information that they are provided with by their client and that their client is happy to divulge.  

    Personally my hunch is that the vendor has their own issues to deal with. Hopefully these will be resolved and not impact or delay your purchase in anyway. 
  • GDB2222
    GDB2222 Posts: 24,604 Forumite
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    You can say to the solicitor (who probably is not a solicitor) that you would like a second opinion from their manager.
    No reliance should be placed on the above! Absolutely none, do you hear?
  • EssexHebridean
    EssexHebridean Posts: 21,319 Forumite
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    edited 24 November 2023 at 11:33AM
    Also remember that your solicitor is not there to give you financial advice, or to speculate on the financial situation of your seller. As already said, they can only relay the information they are given, and if that information is incorrect, then so be it. 

    It sounds like you have been told the facts - that the seller says that the finance is secured on the items via HP, but that there are no charges on the property. In fact, it may well be that the finance is NOT secured on anything at all. 

    One thing you could do is ask your solicitor to raise an enquiry with the sellers solicitor asking them to produce a copy of the finance agreements (perhaps with the actual figures redacted) so you can see exactly what the terms are. They may of course refuse. 
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  • user1977
    user1977 Posts: 13,963 Forumite
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    Also remember that your solicitor is not there to give you financial advice, or to speculate on the financial situation of your seller. As already said, they can only relay the information they are given, and if that information is incorrect, then so be it. 
    But they should be qualified to advise on property law and how securities work. The items mentioned in the OP are fixtures - how can they possibly be affected by any finance agreements other than those which have registered charges?

    It would be like somebody trying to repossess your bricks because the builder bought them on HP....
  • GDB2222
    GDB2222 Posts: 24,604 Forumite
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    user1977 said:
    Also remember that your solicitor is not there to give you financial advice, or to speculate on the financial situation of your seller. As already said, they can only relay the information they are given, and if that information is incorrect, then so be it. 
    But they should be qualified to advise on property law and how securities work. The items mentioned in the OP are fixtures - how can they possibly be affected by any finance agreements other than those which have registered charges?

    It would be like somebody trying to repossess your bricks because the builder bought them on HP....
    There’s a difference between bricks and wardrobes, as the latter may only be secured to the property by a couple of screws.  I doubt that any of us can be quite certain that the wardrobes could not be security for a loan. 

    The reality is, of course, that there’s no significant resale value in a second hand wardrobe, or even a second hand gas boiler, and they are not worth repossessing. However, the threat of repossessing might be enough to extract some money out of the OP. 

    What intrigues me is why the solicitor has simply accepted the information from the seller at face value, rather than going back to clarify what is going on. In fact, both solicitors, really, as the seller’s solicitor seems not to have questioned their client about it. 
    No reliance should be placed on the above! Absolutely none, do you hear?
  • Gavin83
    Gavin83 Posts: 8,744 Forumite
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    user1977 said:
    fatbelly said:
    baccalad said:
    I’ve only just managed to be able to get in contact with my solicitor today. I explained how I understand what they’re saying could happen, but I asked if they could explain to me the legal aspect of why it could happen, as I still don’t understand how I can become liable for their loan if I buy the house. They just reiterated the same point about items being financed and not owned outright, and how I wouldn’t own them and they could be seized if the seller stopped paying for them.
    Which is true if the items were hire purchase because you don't own them until the final payment. 'Hire', and 'Purchase', see?

    It's not true if they bought stuff with a personal loan. ...
    And as discussed above, even if they were on HP (which they wouldn't have been...) the items in question are now  fixtures incorporated into the real property. So the creditors couldn't come and chisel them out, if anyone it's the mortgage lenders who have a charge over them.
    I'm really not sure that's the case. It is up for debate and has appeared on here in various forms a few times recently but ultimately I don't believe a vendor can sell something they don't own and if it's on HP they don't own it. They probably can't just force their way into your house to repossess but they could apply to court for access.

    It's similar with cars. If someone sells a car to someone with outstanding finance the finance company can repossess the car, even if it "kind of" belongs to the purchaser. I say "kind of" because once again it was never the property of the original owner to sell anyway, it was always the property of the finance company. It doesn't just become the property of the new owner because they believed they had a right to buy though.

    In reality I think it's extremely unlikely fundamental parts of a house would be available on a HP agreement for this exact reason. Boilers clearly can be though as demonstrated earlier in this thread. 
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