Receiver sale, their solicitor claiming they don't have to clear all charges on title

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lougre

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Hi


Buying a house via an asset manager/receiver for market value.

As expected the solicitors are being very unhelpful our latest and final issue is that there are 3 mortgages on the property.

When our solicitor tried to confirm all these would be discharged when the Sale was complete. He was told that they can only clear the receiver/Boi's mortgage ie the Bosi and another finance firm charges/mortgage they didn't have to clear.

The contract doesn't say we've to take these on and we certainly didn't agree to that.

But now we are having to argue our case and it sounds like it's falling on deaf ears. We understand either they hand back to the bank to sign over as mortgagee in position or clear the charges from the sale proceeds. But they seem unwilling to do either.


Any advice before we walk away or case/law that insists they give us a clear title. It seems they cannot expect us to just accept these charges when they were never disclosed as part of the sale ?


Thanks
 
The seller must clear any charges in order to provide you with a good title, your solicitor will not proceed without this, it is fundamental to any property transaction, if you cannot get it walk.
 
if you havent signed contracts , it sounds best to walk , id understand if a vendor tried this on at an auction as once you buy , your bound to follow through but who would do so in this instance

any word of how much is outstanding with respect of the other charges ?
 
Thanks. The other side now arguing their client can overreach charges but my solicitor said receivers can't. So annoying. Started another thread here:
 
lougre said:
Hi


Buying a house via an asset manager/receiver for market value.

As expected the solicitors are being very unhelpful our latest and final issue is that there are 3 mortgages on the property.

When our solicitor tried to confirm all these would be discharged when the Sale was complete. He was told that they can only clear the receiver/Boi's mortgage ie the Bosi and another finance firm charges/mortgage they didn't have to clear.

The contract doesn't say we've to take these on and we certainly didn't agree to that.

But now we are having to argue our case and it sounds like it's falling on deaf ears. We understand either they hand back to the bank to sign over as mortgagee in position or clear the charges from the sale proceeds. But they seem unwilling to do either.


Any advice before we walk away or case/law that insists they give us a clear title. It seems they cannot expect us to just accept these charges when they were never disclosed as part of the sale ?


Thanks
Click to expand...
Did you buy at Auction /tender/private treaty .It would be helpful if this was cleared up,Did you pay a deposit knowing the terms of sale as published before hand and your solicitor did not pick it up,I suspect this is the reason Bank/Receiver sales take a long time to sort,
 
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Standard sale via an EA... private treaty
We were told it was a bank sale so may take longer that's it.

Their solicitor sent this today. Mine is adamant we need the discharges. Though to me receiver looks like mortgagee in possession?

"...However, this charge ranks behind the Charge in favour of Bank of Scotland over which the Receiver was appointed. As a result, XY Property Finance DAC, as charge holder, will be executing the deed of transfer as Mortgagee and in doing so will overreach the Bank of Ireland charge. Accordingly, a deed of discharge will not be required to release either the two charges."
 
I'm not a solicitor but have come across such issues in the past.

The salient point here is whether the transfer deed is being executed by a) the receiver OR b) the mortgagee in possession.
If the deed is being executed by the receiver then yes you have a problem with the burden of subsequent charges on the title.
If however the transfer deed is being executed by the mortgagee in possession ie the bank or lending institution then all subsequent charges are removed upon execution of the deed and there is nothing to be worried about.

The extract in your posting above appears to suggest that the execution of the deed will NOT be executed by the receiver but rather the bank, the mortgagee in possession. This changes things entirely. If the bank is executing the transfer deed itself, there shouldn't be anything to be concerned about. See below :

A receiver is appointed by the lender by deed of appointment on foot of the mortgage document. The receiver will act as agent for the legal owner of the property and his powers will be set out

  1. In the mortgage document and
  2. In the [broken link removed] in respect of post 1/12/2009 mortgages and in the Conveyancing Act 1881 in respect of pre 1/12/2009 mortgages.
Because the receiver acts as agent of the legal owner he does not have the same powers as the mortgagee in possession. The most important power he does not have is the power to sell the property free of all interests, rights, and estates in respect of which the mortgage has priority.

Therefore, if any charges, judgments, or mortgages are registered after the registration of the mortgage, the receiver may give possession of the property to the mortgagee in possession to complete the sale.

When the mortgagee in possession, that is the lender, completes the sale he effectively wipes out those burdens/encumbrances by “overreaching” and sells the property free and clear of the burden.

Section 104 of Land And Conveyancing Law Reform Act 2009 confirms the position:

104.— (1) A mortgagee exercising the power of sale conferred by this Chapter, or an express power of sale, has power to convey the property in accordance with subsection (2)—

[CA 1881, s. 21(1)]

(a) freed from all estates, interests and rights in respect of which the mortgage has priority,

(b) subject to all estates, interests and rights which have priority to the mortgage.

(2) Subject to subsections (3)(b) and (4), the conveyance—

(a) vests the estate or interest which has been mortgaged in the purchaser,

(b) extinguishes the mortgage, but without prejudice to any personal liability of the mortgagor not discharged ou
 
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you need a good solicitor OP , most solicitors will encounter serious bowel problems instantaneously if they encounter anything related to title which is anything but pure vanilla
 
galway_blow_in said:
you need a good solicitor OP , most solicitors will encounter serious bowel problems instantaneously if they encounter anything related to title which is anything but pure vanilla
Click to expand...

There are very good reasons why , as a profession, we profoundly dislike dealing with receiver sales.

There are, usually, great big gaps in title and supporting paperwork, rendering it impossible to certify title to a lender.

Cash purchasers can freely ignore these problems but generally won't listen when being advised that a property will be unsaleable in the future to anyone other than a cash purchaser.

And, yes, while time heals most things, it won't heal a bad title.

Your comments on the solicitors' profession are ill-advised, misdirected, played for laughs and poorly thought out.

mf
 
mf1 said:
There are very good reasons why , as a profession, we profoundly dislike dealing with receiver sales.

There are, usually, great big gaps in title and supporting paperwork, rendering it impossible to certify title to a lender.

Cash purchasers can freely ignore these problems but generally won't listen when being advised that a property will be unsaleable in the future to anyone other than a cash purchaser.

And, yes, while time heals most things, it won't heal a bad title.

Your comments on the solicitors' profession are ill-advised, misdirected, played for laughs and poorly thought out.

mf
Click to expand...

that is your opinion , i have mine and its based on experience

i measure a solicitors worth by how willing they are to get stuck into tricky situations with a view to solving them , not by how anxious they are to advise running a mile , sadly the majority opt for the latter in my experience
 
Thank you.
At this stage my solicitor is trying to persuade the other solicitor to get the receiver to sign a letter stating they'll be handing back the property to the bank so they can complete the sale as mortgagee in possession.

Initially they said no but looks like they will now
 
Further to this. The receivers solicitor has sent the following as a response to my solicitor asking them to sign a letter saying the receiver will hand back the property to the bank to sign over as mortgagee in possession.

"....The Charge holder will be executing the deed as mortgagee and not as mortgagee in possession. As you will note from

Http://Www.irishstatutebook.ie/eli/1881/act/41/section/19/enacted/en/html a mortgagee need not be in possession in order to exercise its power of sale. The contract for sale as drafted adequately deals with the execution of the deed of assurance by the mortgagee and nothing further should be required"

My solicitor says the above will not clear all charges.
Their solicitor says it will.

Opinions?
 
Unless you doubt your solicitor's competence, take their advice. They have your interests in mind.

If there is doubt, as there appears to be, you will have difficulty selling it.

Brendan
 
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