Viewing 36 posts - 1 through 36 (of 36 total)
  • Bloody house chains…
  • ebennett
    Full Member

    We’re trying to move house just now and we’re in the middle of the chain, but we’ve hit a snag with the annual rentcharge of £5 which is payable on our freehold (since 1937!) – our buyer says their lender is unwilling to progress with the sale until this is bought out. Apparently this is because in rare cases unpaid rentcharges can be used to convert a freehold into a leasehold (or something like that) – however, we’ve been in touch with the owner of the rentcharge who has confirmed in writing that they have no intention of collecting any arrears and that no future action will be taken. We’re trying to negotiate a sale of the rentcharge with them directly, but the owner is in hospital abroad and won’t return for another 2 weeks and it’s unknown how long it’ll take after that to get the sale completed and registered.

    The issue is that we’ve already had a month’s delay due to this rencharge and our sellers are pressing for a move date, so delaying further could cause issues. Our buyer has also said they’re unwilling to try another mortgage lender, so we’re stuck waiting to hear from the rentcharge owner who obviously has no real incentive to push things forward. Rentcharges are being extinguished in 2037 so the sale should only really be 17 X £5 – i.e. £85! There is a process we can go through with a government department to get it extinguished now, but I spoke to them the other day and they said it’d take 4-6 months.

    Has anyone had any similar experiences? I guess this is basically just a moan, cos if we stick the house back on the market we’d be back to square one anyway – I don’t see we have much choice other than to try and get the rentcharge sold to us. I do feel our buyer could go to another lender though, presumably with all the paperwork they have from the initial lender they could get it expedited with a new one if they were ok with the rentcharge, although they’d need to have a new valuation of course.

    hatter
    Full Member

    No advice, but I feel your pain, took us years of expensive nonsense to move house the last time we did it, grim process.

    Good luck! It will all be worth it in the end, even if it may not feel like it immediately.

    willard
    Full Member

    Damn, that sounds like a pain. I guess offering them the 85 quid is not an option…

    Don’t worry about venting by the way, that’s half of what this place is for

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    DT78
    Free Member

    We had a peppercorn rent on our old house – £1 per year for a 999 year lease set up in 1902, which when the previous owner of the freehold died hadn’t been collected for several years.

    Caused lots of issues when we sold, and apparently put lots of buyers off.

    They should just get rid of these antiquated rents, they might have made sense 100years ago, but things have moved on somewhat

    I think we might have taken out an indemnity policy for our buyers

    ebennett
    Full Member

    Yeah, we’ve offered an indemnity along with a sum to cover any arrears plus future payments but they’re adamant they want it bought out entirely. Just frustrating hearing everything 2nd hand from solicitors, I feel like it would be much easier to resolve things if I could speak directly to the people involved.

    franksinatra
    Full Member

    I think we might have taken out an indemnity policy for our buyers

    This sounds like a winner, is it an option for the OP?

    Does the buyer know that that whole thing could collapse and they could lose the house? They want the house, sounds like they need to be more proactive and not allow bank to dictate everything.

    ebennett
    Full Member

    Does the buyer know that that whole thing could collapse and they could lose the house?

    I’ve told the solicitor to pass on the message that we’re only moving because we found the perfect house for us – if we lose it we may not move at all. I don’t entirely understand why they aren’t consulting other lenders, if I was in their shoes that’s what I’d be doing, at least as a backup. I suspect they’re renting somewhere and it has a longer term than is ideal, so a delay will actually benefit them.

    outofbreath
    Free Member

    Yeah, we’ve offered an indemnity along with a sum to cover any arrears plus future payments but they’re adamant they want it bought out entirely.

    Because when they come to sell they don’t want the hassle you’re going through.

    Dickyboy
    Full Member

    The whole house selling & buying process seems to be getting worse with solicitors picking up the smallest things to add on an indemnity charge or insurance policy for. Selling my wife’s old house at the moment – it’s got one tiny replacement window fitted (because the old one literally fell out) the rest are original 120yr old sash windows that the buyer knows need replacing – but because we don’t have a fensa cert for the new one they want an indemnity policy to cover it 🙄

    ebennett
    Full Member

    Because when they come to sell they don’t want the hassle you’re going through.

    I do understand that, but there is a process where you can fill in one short form and send it to a government department along with the title deed and a copy of the rentcharge deed (which we have) and they’ll get rid of it – the issue is it takes 4-6 months and I can’t see our sellers waiting that long. I’d have done it ages ago if I knew it would be an issue, but as we never even had a rent demand in the 6 years we lived here I didn’t see this coming. Presumably our buyer could just send this in themself once they had completed the purchase.

    DM52
    Free Member

    I did not know that rent charges were a thing in relation to freehold properties until today.

    I am very surprised that an indemnity policy is also not able to cover this type of problem for them, google suggests that there are a lot of them out there.

    tjmoore
    Full Member

    The whole system is crazy. Various neighbours have taken years to sell because of buyers pulling out and chains collapsing, costing a fortune each time.

    Immediate neighbour finally sold, completion for the buyer, they moved out, buyer moved in but the house they were buying fell through. They’ve ended up staying with parents.

    As for the freehold rent, is that pure freehold or leasehold rent to freeholder, even though you may own the freehold or share of?

    As joint freeholder and also leaseholder on my freehold, I’ve just done an update to 999 year lease and now includes peppercorn rent but there’s basically no money involved as I understand it, in mine at least. Hence the peppercorn. Over years you could owe a bag of peppercorns I suppose 😀

    twinw4ll
    Free Member

    Speak to the buyer direct, shouldn’t take much to find their contact details.
    Our last sale we got direct contact with the buyer, cut through loads of solicitor/estate agent bullsh1t.

    ebennett
    Full Member

    I am very surprised that an indemnity policy is also not able to cover this type of problem for them, google suggests that there are a lot of them out there.

    It is available, but they or the mortgage lender won’t accept it.

    As for the freehold rent, is that pure freehold or leasehold rent to freeholder, even though you may own the freehold or share of?

    It’s pure freehold, the rentcharge is just a weird hangover from earlier in the 20th century – they’re getting abolished in 2037.

    Speak to the buyer direct

    I think that’s my next port of call if we don’t get a positive response about buying out the rentcharge from the owner in the next few days. I get that there’s a reason everything goes through lawyers, but IME everything is much simpler when the decision makers just speak directly!

    DT78
    Free Member

    I had all sorts of interesting stuff on my deeds too, like not being allowed to make bricks, distil spirits or have a circus on the land. Which was a tiny 2 up 2 down terrace.

    thisisnotaspoon
    Free Member

    There is a process we can go through with a government department to get it extinguished now, but I spoke to them the other day and they said it’d take 4-6 months.

    Don’t bank on it being a speedy or cheap process.

    You need a solicitor
    They need a solicitor
    You need a surveyor
    they need a surveyor
    then they negotiate between them
    then it all falls apart
    then you finally get it agreed
    then you spend ages waiting for them to sign some paperwork, because there’s no incentive for them really to hurry up.
    then you send it to the land registry
    then they take 4-6 months to rubber stamp it.

    noone
    Full Member

    OP – do you know who the buyer’s lender is?

    May be worth checking the CML Handbook for the lender’s requirements against the conveyance that implemented the rentcharge. Could be a case of a conveyancing factory (or two) not fully understanding the concept.

    neilnevill
    Free Member

    I had a similar charge on my first house which I bought over 20 years ago now. My solicitor picked it up, but not that there was about 3 to 5 years arrears. I got a bill for that shortly after I moved in but then it was only £20 or so. At that point I asked to buy it out, and did so for something like £65 iirc, in order to avoid any hassle when selling. Iirc I was then never asked about it on selling. I’d expect it should be a similar small sum for you but convincing your buyer/their lender I wish you luck.

    breadcrumb
    Full Member

    While we were buying our house the old owners were looking through the deeds and noticed they hadn’t paid the farmer for discharging effluent into his field from the septic tank. So they paid up for the 30 years they had lived there and covered for the next 10 years, the cheque totaled £10.00! The farmer was a little bemused.

    franksinatra
    Full Member

    I had all sorts of interesting stuff on my deeds too, like not being allowed to make bricks, distil spirits or have a circus on the

    We were not allowed to boil blood on the drying green behind our Edinburgh tenement

    ebennett
    Full Member

    At that point I asked to buy it out, and did so for something like £65 iirc, in order to avoid any hassle when selling. Iirc I was then never asked about it on selling. I’d expect it should be a similar small sum for you but convincing your buyer/their lender I wish you luck.

    Thanks, that’s good to know – I think we’ll probably end up doing something similar, it’s just that the rentcharge owner is laid up in hospital just now!

    Could be a case of a conveyancing factory (or two) not fully understanding the concept

    Possibly, which is why I’d like them to at least speak to another lender – rentcharges are apparently common on some areas like ours and rare in others.

    You need a solicitor
    They need a solicitor
    You need a surveyor
    they need a surveyor

    Not according to the guy in the department I spoke to, seemed that there are no solicitors or surveyors involved

    ji
    Free Member

    Is it worth offering the rentcharge owner a few hundred quid to sort it? Even though they’re in hospital that may expedite matters.

    neilnevill
    Free Member

    Are you Bristol by any chance? that was where my house was and my Bristol based solicitor told me it was fairly common on that area although uncommon elsewhere. This could mean solicitors and lenders in your case aren’t familiar and are getting nervous of what they do not know?

    I wasn’t allowed to keep rabbits according to my deeds!

    mrmonkfinger
    Free Member

    Has anyone had any similar experiences?

    kinda

    My move to present house, took 8 months, with no chain.

    Thanks to the cheap as chips solicitors the sellers used.

    Our solicitor was simply requesting various surveys be provided, sellers solicitor CBA. Did not fall in the “2.4 children” model of mass market house move conveyancing that they provided.

    We nearly pulled out of the move.

    ebennett
    Full Member

    Is it worth offering the rentcharge owner a few hundred quid to sort it?

    That’s basically what I want to do, I’ve asked the solicitor if we can draw up some sort of sale agreement and then present it to them and ask what they want for it. They seemed very reasonable in the correspondence I’ve seen so I think they’ll be open to it, it’s just how long it’s likely to take.

    Are you Bristol by any chance?

    Manchester, I think there are certain areas where they’re common and they’re basically unknown outside of them – unfortunately our buyer has engaged a solicitor based in Lincoln 🙄

    Rich_s
    Full Member

    +1 for speak to the buyer direct. No-one else in your transaction will be adding value, so **** ’em. Presumably your estate agent at least has their phone no?

    Ring them up. Speak to the lady of the house (more emotive – they care) and tell them you will shortly have no option but to pull out. Bet you 5p they don’t even know about it.

    neilnevill
    Free Member

    And suggest they should engage a solicitor who is local to the property and familiar with local practices!

    noone
    Full Member

    The problem with rent charges are that there are statutory ‘reliefs’ available to the rent charge owner; meaning that if the rent charge is outstanding for more than 40 days then the rent charge owner can take possession of the property (the person who is liable to pay can stop this action by paying the outstanding sum). Most lenders have set circumstances where they will lend which in most cases is the presence (in the original conveyance) of a mortgagee notice clause (the rent charge owner must put the lender on notice before they take action for possession so that the lender choose to pay the rent charge and protect their security) or an exclusion of the rent charge owner protections (excluding the statutory reliefs above) which will be an exclusion of section 121 Law of Property Act 1925 if you want to have a read through your conveyance.

    It’s an outdated concept but a genuine (if not remote) risk to a lender.

    wwaswas
    Full Member

    Bit OT:

    How morally at odds with your own world view and standards of behaviour would you have to find the people you were buying from before you’d think ‘actually, I don’t want to give you my money’.

    Asking for a friend.

    willard
    Full Member

    I have a slightly different problem with my last house sale… It turned out that my old solicitor (purchase) had not ensured that the deed for the garage had transferred with the house and was still registered to the previous owner. After a lot of talking, I had enough and found the previous owner, spoke to him and got it sorted.

    It turned out the previous solicitor _had_ fscked up and had then tried to tell him that he was liable, which was why he had basically refused to talk to her. Unfortunately he was out to “get value” from the mistake and i ended up having to bribe him with 5k to get him to sign the paperwork for the transfer. Still, the house sold, so it was just a slight drop in what I could take with me when I emigrated.

    DT78
    Free Member

    I hope you claimed that £5k back from the solicitors insurance.

    My solicitor missed a loop hole in the stamp duty we paid, which another firm mentioned, and were happy to represent on a no win no fee. Mentioned to the original solicitor who couldn’t have been more helpful to resolve (as they knew they were going to be sued and there was good grounds).

    It did however take 10months to get the money out of HMRC, which was ironic when I was filling my tax return out and reading all the penalties for delay….

    the-muffin-man
    Full Member

    It’s peoples biggest purchase and people don’t like snags that may come back and bite them on the arse – especially ones they don’t understand. I’d be cautious too as I’d never hear of rentcharge before this thread.

    matt_outandabout
    Full Member

    they want an indemnity policy

    I’m be betting a yearly rentcharge amount that the the solicitor gets half the premium payable…and if then can sell a few a month or pays for the lease on the Jag….

    Flaperon
    Full Member

    It sounds to me as though they’ll keep messing you around and then go down the “we’ll carry on but only with money off” line.

    noone
    Full Member

    I’m be betting a yearly rentcharge amount that the the solicitor gets half the premium payable…and if then can sell a few a month or pays for the lease on the Jag….

    This is toss. The only things I’ve ever had from an indemnity insurer is a stress ball in the shape of a lorry (from an insurer I did a lot of business with) and one lunch (from an insurer I have never done business with).

    matt_outandabout
    Full Member

    In which case I retract my aspersion.

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