Help on bankruptcy restriction on properties buying. Any advise would help

[Nick Nick UK]

Hi,

Not sure if this is the right page. Admin please feel free to ove under appropriate section.

Basically I'm ready to exchange contracts but start to feel unsafe.

The house we are going to purchase had a bankruptcy restriction and bankruptcy notice on the title which were removed after the request of my conveyancing.

The conveyancing say that everything is fine but still don't trust them 100% as they seem to wrap this up pocket the money and move on.

I would like to understand if the vendor is bankrupt and I buy the property cash as been requested. Will this be some effect on me or could I be liable to pay someone in the future or lose the property?

If I'm first time buyer will I be liable to pay stamp duty as I purchased a property under bankruptcy?

I apologize for the silly question but struggling to get answers.

Many Thanks

 

[^woody^]

If the property is an asset for sale due to the owners bankruptcy, then it will have a charge on the deeds and will be being sold by the trustee or official receiver, and will be above board.

Once you complete, it's the same as buying any other house, and there are no come backs.

Stamp duty is payable by any buyer AFAIK, but you are paying a conveyancer for their services so ask them.

 

[Nick Nick UK]

If the property is an asset for sale due to the owners bankruptcy, then it will have a charge on the deeds and will be being sold by the trustee or official receiver, and will be above board.

Once you complete, it's the same as buying any other house, and there are no come backs.

Stamp duty is payable by any buyer AFAIK, but you are paying a conveyancer for their services so ask them.

The conveyancer managed to get the bankruptcy remove but the title still have a restriction in favour of the bank.
Conveyancer is still not explaining it properly and I'm worried and scared about it.

 

[oldbutnotdead]

First thing- you don't own the property until the sale has completed. At the moment the bank (who presumably seized control of the house as an asset due to bankruptcy of their client) have a charge registered against the property. As long as your conveyancer is doing their job properly and ensuring that the terms of that charge are complied with (for example by handing over the receipts from the sale to the bank rather than to the owner) then the charge against the property will be discharged and off you go. I'm surprised the bankruptcy notice has been removed before completion...

Is your conveyancer legit? Are they a solicitor or a member of a professional body? Are they a local firm with an office or are they the cheapest company you could find with an online search?

Your transaction is not unique but it is out of the ordinary and may be outside the skillset of an online vanilla conveyancer.

 

[Keithmac]

I would like to understand if the vendor is bankrupt and I buy the property cash as been requested. Will this be some effect on me or could I be liable to pay someone in the future or lose the property?

Cash payment sounds very odd, especially in this circumstance?.

 

[Nick Nick UK]

First thing- you don't own the property until the sale has completed. At the moment the bank (who presumably seized control of the house as an asset due to bankruptcy of their client) have a charge registered against the property. As long as your conveyancer is doing their job properly and ensuring that the terms of that charge are complied with (for example by handing over the receipts from the sale to the bank rather than to the owner) then the charge against the property will be discharged and off you go. I'm surprised the bankruptcy notice has been removed before completion...

Is your conveyancer legit? Are they a solicitor or a member of a professional body? Are they a local firm with an office or are they the cheapest company you could find with an online search?

Your transaction is not unique but it is out of the ordinary and may be outside the skillset of an online vanilla conveyancer.

Conveyancer is legit with a proper office and advised by the estate agent. No cheap company or stuff like that. Because the transiction is out of ordinary I'm just nervous they are doing it properly.

 

[Mottie]

I would like to understand if the vendor is bankrupt and I buy the property cash as been requested. Will this be some effect on me or could I be liable to pay someone in the future or lose the property?

Cash payment sounds very odd, especially in this circumstance?.

I don’t know about bankruptcy or whether this is the same but I helped my parents buy a repossessed bungalow a few years ago. They bought it through an estate agent and before they had their offer accepted by the vendor (a bank who had repossessed the property), they had to take proof that they had the cash (not a mortgage offer) to the estate agents for them to photocopy. Anyway, they bought it, didn't bother with surveys etc and I think it all went through in a week or so. Perhaps that is what the OP means when he says that it’s a cash purchase as the vendor (bank/building society?) just wants a quick, straightforward sale and is not interested in getting into a mortgage/house sale chain.

Just one small thing to be aware of though that when buying a house under those circumstances, the previous owner would have knocked many others and for up to a year or so you will keep getting red letters and have the odd bailiff knocking on the door chasing other debts but once you shown them proof that you are not the person they are looking for and proof that you bought the property from the bank or whoever forced the repossession, they leave you alone. In fact, their solicitor warned them of that because she too had bought her house under similar circumstances.

 

[cdbe]

Don't ask a solicitor, ask some builders on a DIY forum for reassurance!!!

 

[Nick Nick UK]

Don't ask a solicitor, ask some builders on a DIY forum for reassurance!!!

I asked the solicitor but the answer was to be look fine but it`s your call. What a **** of answer is from a professional?

I was just asking if someone had a similar experience.

 

[Nick Nick UK]

I don’t know about bankruptcy or whether this is the same but I helped my parents buy a repossessed bungalow a few years ago. They bought it through an estate agent and before they had their offer accepted by the vendor (a bank who had repossessed the property), they had to take proof that they had the cash (not a mortgage offer) to the estate agents for them to photocopy. Anyway, they bought it, didn't bother with surveys etc and I think it all went through in a week or so. Perhaps that is what the OP means when he says that it’s a cash purchase as the vendor (bank/building society?) just wants a quick, straightforward sale and is not interested in getting into a mortgage/house sale chain.

Just one small thing to be aware of though that when buying a house under those circumstances, the previous owner would have knocked many others and for up to a year or so you will keep getting red letters and have the odd bailiff knocking on the door chasing other debts but once you shown them proof that you are not the person they are looking for and proof that you bought the property from the bank or whoever forced the repossession, they leave you alone. In fact, their solicitor warned them of that because she too had bought her house under similar circumstances.

Hi, Could you share details of the solicitor. I would like to get their opinion to see if mine has made all the check etc etc.

Thanks

 

[oldbutnotdead]

As long as the sale is being handled via solicitors and other qualified persons and you're not handing a sack of cash to the previous owner in a pub car park you'll be fine (usual route with 'cash' is telegraphic transfer between solicitors. This plus other documents establishes a trail, if anything does go wrong you'll have people to sue)

 

[Nick Nick UK]

As long as the sale is being handled via solicitors and other qualified persons and you're not handing a sack of cash to the previous owner in a pub car park you'll be fine (usual route with 'cash' is telegraphic transfer between solicitors. This plus other documents establishes a trail, if anything does go wrong you'll have people to sue)

We are using estate agent as this was advertised through them plus solicitors for both parties and recovery agency which the estate agent is dealing directly. I think is fine but not having any assurance From my solicitor I started to be nervous and asked on the forum if someone had similar experience

 

[Nick Nick UK]

I was just worried if any restriction or issue could come out after completion just because this was bought from a bankrupt seller. Just trying to have everything checked and not leaving anything behind

 

[clifford1]

Cash payment sounds very odd, especially in this circumstance?.

Rather a lot of cash to be carrying around?

 

[oldbutnotdead]

I was just worried if any restriction or issue could come out after completion just because this was bought from a bankrupt seller. Just trying to have everything checked and not leaving anything behind

This is why you use professionals. Solicitors operate under quite tight regulation- they can't do a phoenix if they cock something up.

The House of Pain was an auction sale forced by the winners in a court case against the owner- the winners had registered a charge against the proprty just as your bank have in your case. Cash sale (no mortgage involved) so at exchange I transferred the purchase price to my solicitors. They then liaised with the owner and the winners of the court case and (this bit I have to assume cos I don't know exactly how it happens) ensured that there were witnessed signatures on all documents from the owners and winners before transferring the cash to their solicitors.

I had notice from the Land Registry that the charges against the property had been removed about a week later. Job jobbed.
If anything had gone wrong I'd have been straight back to my solicitors