Garage, repossession and title issues
Discussion
Someone I know has hit a situation and is not sure where he stands or even who to ask.
He hit tough times 15 years ago or so and ended up declaring bankruptcy. His home was repossessed and sold at a loss.
It has recently become apparent that the garage of the home had a separate registration and he is still the registered owner. We assume the lender never registered their charge over the garage.
He has been asked to sign a transfer document to transfer ownership to the current seller, who in turn has a buyer. This has delayed their sale.
My friend is not particularly tempted to be a dick and is happy to sign the transfer but has a nagging doubt that the garage should have been declared to the receiver if he owned it (he just assumed it would be dealt with as per the house) and is not sure if is legally able to sign the transfer or if he does if he could land himself in difficulty.
For the cynics on here it’s not me.. but I said I’d ask the question.
I’m not even sure who could give advice - a conveyancer or a insolvency lawyer..
Any ideas gratefully received
He hit tough times 15 years ago or so and ended up declaring bankruptcy. His home was repossessed and sold at a loss.
It has recently become apparent that the garage of the home had a separate registration and he is still the registered owner. We assume the lender never registered their charge over the garage.
He has been asked to sign a transfer document to transfer ownership to the current seller, who in turn has a buyer. This has delayed their sale.
My friend is not particularly tempted to be a dick and is happy to sign the transfer but has a nagging doubt that the garage should have been declared to the receiver if he owned it (he just assumed it would be dealt with as per the house) and is not sure if is legally able to sign the transfer or if he does if he could land himself in difficulty.
For the cynics on here it’s not me.. but I said I’d ask the question.
I’m not even sure who could give advice - a conveyancer or a insolvency lawyer..
Any ideas gratefully received
I can't help, but I would speak to a lawyer about it. And given he is not getting anything for it, I would ask the party who wants him to sign the transfer document to pay for the lawyer (or let him speak to their lawyer, who should then give him some type of reliance on a written opinion/statement).
caziques said:
His title to the property would have been "permanently extinguished" at the time.
The Official Receiver should be involved.
If he signs I doubt anything would happen, but technically he has hidden assets - a criminal offence.
This but he should speak to a solicitor first, if it delays the sale sobeit. The Official Receiver should be involved.
If he signs I doubt anything would happen, but technically he has hidden assets - a criminal offence.
Are they 'hidden assets' if one is not even aware of being in possession of them??
If the garage was supposed to be part of the deeds for the house, surely a solicitor has messed up somewhere along the line and the person is not liable for that fault (especially if they are not even aware of it)?
If the garage was supposed to be part of the deeds for the house, surely a solicitor has messed up somewhere along the line and the person is not liable for that fault (especially if they are not even aware of it)?
OIC said:
He doesn't own the garage, as explained above.
The Land Registry will need to sort this out with the sellers of the house and garage.
He should walk away.
He has agreed to an email saying "my understanding is my title ended when the property was repossessed and any queries should be redirected to the Official Receiver"The Land Registry will need to sort this out with the sellers of the house and garage.
He should walk away.
Seems to cover it, although bad news for the vendor/purchaser I suspect.
Thanks for the input folks - he found it useful
House buying is a two stage process,
Stage 1 - Contract. The contract identifies what is being sold.
Stage 2 - Completion. Money goes in one direction and legal transfer of Title goes the other.
Your first step is to check that those two stages matched.
What did the estate agent particulars say?
What did the contract say?
If the contract was correct but the Title passed was wrong then the buyer can require the seller to deliver the garage for no further payment.
On the other hand if the garage was never actually sold it still remains with its original owner. (Subject to any rights of possession).
If the previous owner bought and mortgaged his house and then later bought the garage for cash it's entirely possible there were two different legal Titles.
Stage 1 - Contract. The contract identifies what is being sold.
Stage 2 - Completion. Money goes in one direction and legal transfer of Title goes the other.
Your first step is to check that those two stages matched.
What did the estate agent particulars say?
What did the contract say?
If the contract was correct but the Title passed was wrong then the buyer can require the seller to deliver the garage for no further payment.
On the other hand if the garage was never actually sold it still remains with its original owner. (Subject to any rights of possession).
If the previous owner bought and mortgaged his house and then later bought the garage for cash it's entirely possible there were two different legal Titles.
surveyor said:
Someone I know has hit a situation and is not sure where he stands or even who to ask.
He hit tough times 15 years ago or so and ended up declaring bankruptcy. His home was repossessed and sold at a loss.
It has recently become apparent that the garage of the home had a separate registration and he is still the registered owner. We assume the lender never registered their charge over the garage.
He has been asked to sign a transfer document to transfer ownership to the current seller, who in turn has a buyer. This has delayed their sale.
My friend is not particularly tempted to be a dick and is happy to sign the transfer but has a nagging doubt that the garage should have been declared to the receiver if he owned it (he just assumed it would be dealt with as per the house) and is not sure if is legally able to sign the transfer or if he does if he could land himself in difficulty.
For the cynics on here it s not me.. but I said I d ask the question.
I m not even sure who could give advice - a conveyancer or a insolvency lawyer..
Any ideas gratefully received
He should speak to any of: a solicitor who knows about personal insolvency, an insolvency practitioner, or his old trustee in bankruptcy. He hit tough times 15 years ago or so and ended up declaring bankruptcy. His home was repossessed and sold at a loss.
It has recently become apparent that the garage of the home had a separate registration and he is still the registered owner. We assume the lender never registered their charge over the garage.
He has been asked to sign a transfer document to transfer ownership to the current seller, who in turn has a buyer. This has delayed their sale.
My friend is not particularly tempted to be a dick and is happy to sign the transfer but has a nagging doubt that the garage should have been declared to the receiver if he owned it (he just assumed it would be dealt with as per the house) and is not sure if is legally able to sign the transfer or if he does if he could land himself in difficulty.
For the cynics on here it s not me.. but I said I d ask the question.
I m not even sure who could give advice - a conveyancer or a insolvency lawyer..
Any ideas gratefully received
This is a mess, but one thing seems clear: he ought not under any circs sign the transfer.
I am a bit puzzled as to how the bank could have sold the house and the current owner could have bought it thinking that the garage was included, when the garage was on a separate title. Unraveling that puzzle will determine whether there is value in the garage that the current owner will have to pay for: if everyone thought the sale and sale price included the garage, then all there is to do is regularise the titles. Who does the transfer is probably academic: the trustee is the more obvious choice now.
If though there is value in the garage, then there is a potential spat between the bank (who will say it ought to have been part of its security) and the trustee (who will say it wasn’t and so should be available for the unsecured creditors).
It’s like a bloody exam question!
From a layman’s opinion.
1) surely upon the sale/possession change of the house, a plan would be involved?
2) from the bankrupty/receivership point of view, the garage and its land is/was an undeclared asset?
It is up to him whether he sells the garage for a sum of money, and whether he uses a conveyancing or an insolvency solicitor - it depends on his risk appetite and moral compass.
1) surely upon the sale/possession change of the house, a plan would be involved?
2) from the bankrupty/receivership point of view, the garage and its land is/was an undeclared asset?
It is up to him whether he sells the garage for a sum of money, and whether he uses a conveyancing or an insolvency solicitor - it depends on his risk appetite and moral compass.
surveyor said:
Someone I know has hit a situation and is not sure where he stands or even who to ask.
He hit tough times 15 years ago or so and ended up declaring bankruptcy. His home was repossessed and sold at a loss.
It has recently become apparent that the garage of the home had a separate registration and he is still the registered owner. We assume the lender never registered their charge over the garage.
He has been asked to sign a transfer document to transfer ownership to the current seller, who in turn has a buyer. This has delayed their sale.
My friend is not particularly tempted to be a dick and is happy to sign the transfer but has a nagging doubt that the garage should have been declared to the receiver if he owned it (he just assumed it would be dealt with as per the house) and is not sure if is legally able to sign the transfer or if he does if he could land himself in difficulty.
For the cynics on here it s not me.. but I said I d ask the question.
I m not even sure who could give advice - a conveyancer or a insolvency lawyer..
Any ideas gratefully received
Friend should also get advice whether the garage title falls within the 3 year rule. This deals with residential property although I ve never had to deal with a garage as a separate title to the house. If the rule does apply, the interest reverted to the friend 3 years after bankruptcy. There could be an issue with the OR if the asset was not disclosed but all that friend can do is be honest.He hit tough times 15 years ago or so and ended up declaring bankruptcy. His home was repossessed and sold at a loss.
It has recently become apparent that the garage of the home had a separate registration and he is still the registered owner. We assume the lender never registered their charge over the garage.
He has been asked to sign a transfer document to transfer ownership to the current seller, who in turn has a buyer. This has delayed their sale.
My friend is not particularly tempted to be a dick and is happy to sign the transfer but has a nagging doubt that the garage should have been declared to the receiver if he owned it (he just assumed it would be dealt with as per the house) and is not sure if is legally able to sign the transfer or if he does if he could land himself in difficulty.
For the cynics on here it s not me.. but I said I d ask the question.
I m not even sure who could give advice - a conveyancer or a insolvency lawyer..
Any ideas gratefully received
If the rule applies it is the friends to sell if he wishes. He should not sign anything yet and the current seller might want to have a word with the solicitor used for his purchase.
Alternatively if the 3 year rule does not apply the property may fall to be dealt with by the Crown Estate - suggest google escheat property . If this is the case it will be for the seller to deal with the Crown Estate to buy the property in order to be able to sell it. Costs payable to the Crown Estate would be circa £10,000 plus their own legal costs.
Edit to add - if the bankruptcy is/ was not recorded against thet title, it is unlikely that the OR would become aware of the sale.
I think this kind of thing is more common than most people would guess.
There's a house I know, 15-20 years ago, the owners bought a strip of land alongside it, and built an extension, partly on the 'new' strip of land.
The house has been sold twice since then, the strip of land is still registered to the first owners of the house.
About 100 yards away, there is an orphaned bit of land which still seems to belong to the developer which went bust owing a lot of cash about 30 years ago. Next to that is a section of footpath which is shown as belonging to two houses, but the council assert that they own the tarmac.
Conveyancers and the Land Registry couldn't run a bath.
The system runs on the principle that the next lot of solicitors won't be any more competent or diligent than the last lot.
Is the bankrupt person's address still shown on the LR file as being the house he was evicted from?
There's a house I know, 15-20 years ago, the owners bought a strip of land alongside it, and built an extension, partly on the 'new' strip of land.
The house has been sold twice since then, the strip of land is still registered to the first owners of the house.
About 100 yards away, there is an orphaned bit of land which still seems to belong to the developer which went bust owing a lot of cash about 30 years ago. Next to that is a section of footpath which is shown as belonging to two houses, but the council assert that they own the tarmac.
Conveyancers and the Land Registry couldn't run a bath.
The system runs on the principle that the next lot of solicitors won't be any more competent or diligent than the last lot.
Is the bankrupt person's address still shown on the LR file as being the house he was evicted from?
OutInTheShed said:
The system runs on the principle that the next lot of solicitors won't be any more competent or diligent than the last lot.
Your point is not an unreasonable one. In my opinion it translates into reality as,Don't pay cash money for anything to which the seller can't prove Title, and
Don't build on on "your" land unless you're darned sure about having good Title.
Had a similar situation recently
Years ago I got planning for a new house on the end of a terrace block, original house got reposed and sold on, I then reapplied for planning for the buyer as it had lapsed and during this process it became apparent that at small yet not insignificant part of the land was sat on a separate title as they neighbours had realigned the boundaries years ago.
Estate agents and buyers solicitors didn't want to know at all, previous owner didn't realise until we had to deal with it, he was still very upset about the situation, ended up having to pay a reasonable sum of money for it to get the planning reapproved.
Years ago I got planning for a new house on the end of a terrace block, original house got reposed and sold on, I then reapplied for planning for the buyer as it had lapsed and during this process it became apparent that at small yet not insignificant part of the land was sat on a separate title as they neighbours had realigned the boundaries years ago.
Estate agents and buyers solicitors didn't want to know at all, previous owner didn't realise until we had to deal with it, he was still very upset about the situation, ended up having to pay a reasonable sum of money for it to get the planning reapproved.
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