Advice needed on property buying law

regulus · 20 Feb 2009 at 13:32

I will give you what I know and hope it makes more sense to you than it did to me. A friend on mine put an offer on a house in London which got excepted and contracts has been signed. She applied for a mortgage in Italy (she's Italian) and the application has been provisionally excepted. Unfortunately, the bank is messing her about and keep wanting more prove of things, all while the sales agent is getting more agitated. He has now said that massive legal action will be taken against her if funds are not transferred by the first of March. At least, that is how she explained it to me through her dramatics and tears. What can happen and what's her rights?

Gilly · 20 Feb 2009 at 13:38

Accepted/proof.

If a deal is provisionally accepted surely it is only in lieu of payment. If she can't pay, she simply doesn't make on the house?

Paul11 · 20 Feb 2009 at 13:41

when you say "contracts have been signed"

do you mean she has exchanged on the property ?

a1ex2001 · 20 Feb 2009 at 13:45

Paulus said:
when you say "contracts have been signed"

do you mean she has exchanged on the property ?

This is the important part, if she has exchanged then she is in a tricky situation as she has to pay the money. If not then the English house buying system means that nobody owes anyone anything and either party can just walk away.

Rich_L · 20 Feb 2009 at 13:45

Yeah oops - she probably should have secured the funds first before entering into a contract to buy the property..

However if she pulls out, they wouldn't be able to sue for the value of the house, I don't think, it would only be along the lines of wasted rental income and time expended, think that's right anyway

jamief · 20 Feb 2009 at 13:46

Gilly said:
Accepted/proof.

If a deal is provisionally accepted surely it is only in lieu of payment. If she can't pay, she simply doesn't make on the house?

Not totally sure how it works in England, but in Scotland, when missives are concluded, there are often clauses such as "In the event of the purchaser not completing by XX.XX.XXXX, interest will become payable on the amount of XXXXXXXXX at 5% per annum" etc etc.

Paul11 · 20 Feb 2009 at 13:47

thinking about it , a solicitor would not go to exchange until the mortgage was fully in place....

Gilly · 20 Feb 2009 at 13:53

Paulus said:
thinking about it , a solicitor would not go to exchange until the mortgage was fully in place....

Depends whether those rules exist when buying abroad?

Paul11 · 20 Feb 2009 at 13:53

Gilly said:
Depends whether those rules exist when buying abroad?

she is buying in london

i would guess she would use a uk solicitor

a1ex2001 · 20 Feb 2009 at 14:34

Paulus said:
she is buying in london

i would guess she would use a uk solicitor

You don't have to use a solicitor and not all are exactly highly reputable.

Paul11 · 20 Feb 2009 at 14:44

a1ex2001 said:
You don't have to use a solicitor and not all are exactly highly reputable.

you would buy a property without a solicitor ?

especially if you were from another country ?

asking for trouble imo

regulus · 20 Feb 2009 at 15:15

So entering into exchange is the make or break part? Texting her now to ask if she did and if she used a solicitor.

regulus · 20 Feb 2009 at 15:23

Ok, she did enter into exchange. Little bit buggered then right?

jamief · 20 Feb 2009 at 15:24

Sounds like it.

Has she spoken to her solicitor? Surely he might advise her to consider alternate lenders?

Gilly · 20 Feb 2009 at 15:47

So the solicitor managed the exchange knowing the funds weren't ready? :confused:

Wouldn't be happy with that...

Paul11 · 20 Feb 2009 at 15:53

Gilly said:
So the solicitor managed the exchange knowing the funds weren't ready?

Wouldn't be happy with that...

agreed

that sounds really dodgy, any decent solicitor would not exchange until funds were in place

if she did actually exchange she is liable and there will be case for legal action

regulus · 20 Feb 2009 at 16:16

Worst case scenario is?

Youstolemyname · 20 Feb 2009 at 16:35

death by stoning.

Paul11 · 20 Feb 2009 at 16:56

regulus said:
Worst case scenario is?

i think the standard is that you lose your deposit and they can sue you for costs and possibly compensation.

to be sure phone a solicitor who deals with property