[Closed] House buying shenanigans

You say the developer has changed names, is that all they did? Are you sure they didn't go under then start a new company? What is the wording of the buyback? Is it not subject to anything?

What about an indemnity? Might be tricky if you have already started dealings with the developer though.

You have I think three clear choices:

1 Take the risk, buy the house as it is, but remember that even assuming the clause doesn't directly cause trouble to you, the house might be a bitch to sell when you come to move and the next buyer gets cold feet.

2 Walk away, there are other houses and it's the seller's problem to sort out.

3 Arrange some sort of indemnity, which may only cost a couple of hundred quid. For that sort of money, it hardly matters whether the seller or buyer pays the fee.

We went for option 3 (at least two different indemnities, maybe 3) when our house had "issues" and the seller (who to be fair to them had lived there for two decades without any problems) wouldn't/couldn't do anything about them...

Nick, it is just a change of name for the developer. I have checked this with a company register and the company itself. The wording on the transfer is as follows:

"The pink land is hereby subject to an option to re-purchase in favour of the Company to be exercised at any time by service of a notice by the Company upon the Purchaser to this effect and the pink land shall as soon as reasonably possible thereafter be transferred to the Company free from incumbrances for a nominal fee of one pound and the parties hereby apply to the Registrar at H.M. Land Registry to note the details of the option as herein contained on the register of the title allocated to the Purchaser upon registration of its title following completion hereof. Upon any such transfer to the Company or its successors in title to this option or assigns formal right of way and services will where necessary be granted to the then owner of the property the positions of any accesses and service to reflect the access and service arrangements then existing or if none then by agreement."

According to our solicitor no insurance company will offer an indemnity against this. I am looking into this myself though as I am not entirely believing of what I am being told by my solicitor.

Captain,
1, We cannot proceed with the purchase until this is cleared up. I presume this is because the bank will not loan against the property as the title is not clear.
2, It took us months to find this house and there are no other houses nearby for sale that are even anywhere near as nice as this one. We are relocating to another part of the country so it is not like we can just hang around waiting for another nice house to come on the market. I am working down here already and cannot afford to stay in B&Bs for another few months while we find and buy another house. If this cannot be sorted within a month I am considering walking away and renting instead.
3, See above regarding indemnity

I have seen odd strips of land in the property auctions so I would be v careful if someone had an option on 1 for a pound. I could just exercise the option and stick it in an auction for a quick buck. Sorry just a thought.

you may also find that, if you get it, indemnity is not worth getting if you ever need to exercise it. The only time I have seen it in action the insurers tried (and succeeded ) to wriggle out of it.

If it was a small bit of non material land then I would risk it.
A 1/3 of your section for a pound any time would be an unacceptable encumbrance and while I know it's a total pain I would rocket your solicitor for not raising it and walk away. If that was executed you'd be in a for a fight anyway so why take it on, let some other mug.

What an odd clause. What is the purpose of this? I mean why did the developers insist on the clause, and why would anyone buy a house with the possibility of a large portion of land being re-appropriated on a whim? There must be some explanation for it?

That's an odd one. Option a piece of land I could perhaps understand. However and option on a piece of land that effectively chops a third off your house?! That's just plain weird.
Would it pass a test of reasonableness ? Probably not but it would take a legal bod to thrash that out.

I would suggest that you have scuppered the possibility of dti by contacting the developer with the benefit of the clause.

If the developer has just changed its name (check the company number which does not change) then ask them to release the covenant, if there's a cost to this this should come off the purchase price.

Can't imagine the property is mortgageable with that clause in place.

Is there land behind it ripe for development where they would need a chunk of your land to access it? That's often a reason why. Saves having to buy someone out to access the land and removes ransom value on the access land which could cost a bit. 1/3 of development value was the ransom value from a court case I think!

have a chat with a different solicitor, find one who will get the requisite letter from the developers

or find another house

Solicitor didn't notice FFS!

Amazing that the vendor's solicitors are not doing anything as if you pull out the next prospective purchaser is just going to find the same issue. Have you drawn this to the attention of the vendor?

If the vendor won't sort it and you can't get an indemnity then walk away there are plenty more houses out there.

Good point re ransom value a mate sold a strip of garden and had a clawback clause put in the contract. In this case the buyer just wanted more land but if he sold on it could be developed.

It seems the only solution is to get the clause removed or a letter stating it will never be exercised.

The land does not provide access to anywhere that could be developed at a later date.

The pink area below is the section in question.

[img] [/img]

bizarre.

I can't imagine for a second that you'd get a mortgage with that in place. Could you write to the developer directly?

That is worrying. That's a big enough plot for a developer to put a couple of houses on so they might well exercise their right to buy it. What would be their incentive to sign those rights away? What is the lane and small building just above your plot? On the plus side if it does work out then that's a good size garden 🙂

Is your solicitor a cheap internet one? Just curious.

If the vendor wants a sale the vendor had better sort out IMO.

Nick, it would appear we can't until this is cleared up. Unfortunately this only came up after the mortgage was arranged and we were 3 months into the conveyancing and approaching exchange. The Title of Part and plans were some of the last documents we received and are now the only thing holding us up.

I have contacted the developer directly and so far they are being helpful but they have no obligation to speak to me as I don't own the house. I am also trying to get in touch with the sellers as neither they nor their agents are/were aware of this as his solicitors haven't told them about the issue.

The lane above is a small electrical substation and access to it. It is a really nice house with an awesome garden, garage and workshop which is why I am really reticent to let it go.

Our solicitors are definitely not a cheap internet one but I am now questioning the extra cost over a cheap one!

My view is that you need to be prepared to walk away. As difficult as that is, knowing you can walk is the only way to ensure you don't end up being shafted.

It sounds like you do need good legal input
Option 1: Put the pressure back on vendor solicitor (will only work if you are prepared to walk away)
Option 2: Sack your solicitor and appoint a better one.
Option 3: Apply both Option 1 and Option 2!

It will be curious to hear what the sellers say, as in did they somehow get a mortgage on the property with that £1 plot buyout clause hidden in the smallprint and missed by their solicitors as well.

If it becomes entirely untenable or is likely to take months then we will walk away and I have already threatened that if we cannot complete by the end of June. I just want to explore all options first before bailing.

Stern words will be had with my solicitor this afternoon when my (fairly low) expectations of them will be fully and concisely explained. If they cannot convince me they can match those expectations then Option 2 will be suggested to them.

If it falls through or is going to take months it will be option 3.

The lane above is a small electrical substation and access to it.

Irrespective of its use you are in a situation where your title hs a 1/3rd of it potentially at risk for £1, the only lever you could pull was that "as soon as reasonably possible thereafter " would be difficult if your house is there and you live in it. Legal costs for that would be expensive. Sorry but I would still walk away unless this can be unequivocally waived and removed.

I'd tell the vendor to sort it out, or reduce the price by the percentage of land in the buy back clause and add £1!

Have you tried the estate agents?

We had one or two (relatively) minor niggles with our house, missing paperwork etc. Their solicitor was an online one and useless. Eventually we phoned the agent and asked them to sort it, nothing is more effective than a shiny suit in an A3 who think they're about to lose their 2%!

reduce the price by the percentage of land in the buy back clause and add £1!

Remember you'll have to go through all this if you sell it as well.

I'd walk away i think.

Option 1: Put the pressure back on vendor solicitor (will only work if you are prepared to walk away)

Call the sellers bluff, and tell them you're struggling to sort this with the developer, and need their input. Point out that this is going to haunt them with all future prospective purchasers if you walk away, so they need to be proactive about helping you sort it. It's not going to go away.

Had the house been on the market for a while? if so, they won't want to lose you as a buyer.

Wrecker, it is a protected nature reserve behind. Another reason we like it so much.

We definitely won't (in fact we can't) buy this place unless the unequivocally waived or removed so no issues with reselling if we do get it.

I am going to talk with the sellers tonight and have been in contact with the estate agent who knew nothing about this until I told them last night.

We offered on the place before it made it onto the market. It went straight onto rightmove as sold. I have been looking for other houses but all the ones in the area that are of the same size completely fill their postage stamp of a plot with barely any garden and no garage/workshop.

One thing I may propose to the seller is that I rent for 12 months to allow them to sort the problem out but I will reduce the offer price by the cost of 12 months rent.

One thing I may propose to the seller is that I rent for 12 months to allow them to sort the problem out but I will reduce the offer price by the cost of 12 months rent.

Can't see them going for that, in the SE the value could go up by 10% in 12 months and why would they not just then re-list anyway and sell to someone who doesn't want a discount?

try putting the question on [url= http://www.gardenlaw.co.uk/phpBB2/viewforum.php?f=4 ]here[/url]. It's an excellent forum for this sort of thing

Because he risks losing the place he wants (and he really wants this place) if this falls through. 12 months rent is less than 2% of the price we offered so not a massive loss to him plus he would then have to pay for another set of solicitors and estate agents fees if he relists which would come to more than the cost of what we would be asking. We are not in the SE so prices aren't rising that fast.

I can only ask and if they say no then so be it.

Because he risks losing the place he wants (and he really wants this place) if this falls through.

Nothing to help with your problem but just a Psa to peeps, when buying a house your solicitor won't have viewed the property so won't know if the deeds tally with what you think you are buying, from my experience it's worth viewing the deeds with a fine toothcomb at an early stage!