A farm is for sale by auction. A clause of the contract is the that the purchaser agrees that there is a sub-sale. The details of the sub-sale are as follows:
Person A buys a non resedential farm property in 2006 for 440k. Person A transfers 2.5 acres in 2008 and 35 acres in 2010 to Person B. Person B is the sister of Person A.
Person A had a mortgage on the property. Person B also has a mortgage on the property which has to be discharged with the proceeds of the auction.
Now Person A is selling the property at public auction on foot of a contract between Person A and Person B. That is Person B is selling the property back to Person A on the day of the auction for 80k, and Person A is selling the property on to a member of the public on the same day for a sum probably in the region of 200k.
Person A is in serious financial difficulties with judgements against his companies and millions of debt with BoI. Person B (an individual) has undertaken to discharge her mortgage (BoI) on the property before it is transferred back to Person A. The contract will be as if 'the contract was made directly between Person A and the new purchaser'.
I find this situation bizzare and cannot understand why person b does not just sell the property directly on the day of the auction to a member of the public as she is the current owner. What is the point of re-introducing the orignal owner Person A in a sub sale in view of the fact that that person is flat broke? Both person A and person B would have paid their stamp duties at the time they purchased the property as 'young trained farmers'.
My solicitor advises not to get involved. The EA says it doesn't matter about the sub sale as the purchaser is buying for title, and if the vendor (irrespective of who that is) cannot produce title within the 5 week closing, the 10% deposit on the day of the auction is refundable. The contract does not state about a refund.
The final twist is that Person B is the solicitor working in the practice that is responsible for the transfer between Person A and B, and is also responsible for the contract at the upcoming public auction.
Has anyone any idea why such a construction is made in the contract and if ultimately it makes any difference to the purchaser.
Person A buys a non resedential farm property in 2006 for 440k. Person A transfers 2.5 acres in 2008 and 35 acres in 2010 to Person B. Person B is the sister of Person A.
Person A had a mortgage on the property. Person B also has a mortgage on the property which has to be discharged with the proceeds of the auction.
Now Person A is selling the property at public auction on foot of a contract between Person A and Person B. That is Person B is selling the property back to Person A on the day of the auction for 80k, and Person A is selling the property on to a member of the public on the same day for a sum probably in the region of 200k.
Person A is in serious financial difficulties with judgements against his companies and millions of debt with BoI. Person B (an individual) has undertaken to discharge her mortgage (BoI) on the property before it is transferred back to Person A. The contract will be as if 'the contract was made directly between Person A and the new purchaser'.
I find this situation bizzare and cannot understand why person b does not just sell the property directly on the day of the auction to a member of the public as she is the current owner. What is the point of re-introducing the orignal owner Person A in a sub sale in view of the fact that that person is flat broke? Both person A and person B would have paid their stamp duties at the time they purchased the property as 'young trained farmers'.
My solicitor advises not to get involved. The EA says it doesn't matter about the sub sale as the purchaser is buying for title, and if the vendor (irrespective of who that is) cannot produce title within the 5 week closing, the 10% deposit on the day of the auction is refundable. The contract does not state about a refund.
The final twist is that Person B is the solicitor working in the practice that is responsible for the transfer between Person A and B, and is also responsible for the contract at the upcoming public auction.
Has anyone any idea why such a construction is made in the contract and if ultimately it makes any difference to the purchaser.
