Mortgage on a property with an old boundary dispute
Discussion
Hi folks,
Looking for some advice here:
We're looking to purchase a repossesed property in an auction coming up soon. Looking through the documents of sale it looks like there is currently a boundary dispute. HOWEVER, having spoken to the neighbour, she is now happy that the dispute has been resolved. I have also checked this with her solicitors who are also happy that no further action will be taken. (We can get a letter to that effect). Now the solicitor whom I tasked with having a look at the documents is adamant that no lender will underwrite this business with the property as security because of this past dispute.
That doesn't sit well with me, as there are now NO disputes and this will shortly be documented.
Is he correct in suggesting there would be an issue as I just don't follow his train of thought?
Looking for some advice here:
We're looking to purchase a repossesed property in an auction coming up soon. Looking through the documents of sale it looks like there is currently a boundary dispute. HOWEVER, having spoken to the neighbour, she is now happy that the dispute has been resolved. I have also checked this with her solicitors who are also happy that no further action will be taken. (We can get a letter to that effect). Now the solicitor whom I tasked with having a look at the documents is adamant that no lender will underwrite this business with the property as security because of this past dispute.
That doesn't sit well with me, as there are now NO disputes and this will shortly be documented.
Is he correct in suggesting there would be an issue as I just don't follow his train of thought?
He may or may not be right, it depends on lender/nature of dispute. Lenders are concerned with anything that affects the value/ability to sell a property as they look at a worse case repossession scenario. Even trivial boundary disputes are notorious for huge legal costs as people lose sight of what they're fighting over and take it as a matter of principle - and principles=large legal bills in this context.
But why don't you chat to your likely mortgage lender now to see what their attitude is? If your bid is accepted its a little late to try and work out the mortgagee's position and find out that you're stuck without funding.
But why don't you chat to your likely mortgage lender now to see what their attitude is? If your bid is accepted its a little late to try and work out the mortgagee's position and find out that you're stuck without funding.
My Sister had this problem, found a great house really cheap that'd been on the market for ages. Problem was per the title deeds the drive & half the garden belonged to someone else. This was the reason it had been on the market so long as folk were struggling to get a mortgage and it really put off potential buyers.
Their offer for the asking price was subject to the present owner obtaining title to the area in dispute. It took a while and cost the seller £25k as they had little choice.
Their offer for the asking price was subject to the present owner obtaining title to the area in dispute. It took a while and cost the seller £25k as they had little choice.
trunnie said:
He may or may not be right, it depends on lender/nature of dispute. Lenders are concerned with anything that affects the value/ability to sell a property as they look at a worse case repossession scenario. Even trivial boundary disputes are notorious for huge legal costs as people lose sight of what they're fighting over and take it as a matter of principle - and principles=large legal bills in this context.
But why don't you chat to your likely mortgage lender now to see what their attitude is? If your bid is accepted its a little late to try and work out the mortgagee's position and find out that you're stuck without funding.
Absolutely, but the point is, as of now there is NO dispute. Everything has been agreed & settled.But why don't you chat to your likely mortgage lender now to see what their attitude is? If your bid is accepted its a little late to try and work out the mortgagee's position and find out that you're stuck without funding.
We're certainly going to discuss it with the lenders prior to making an pre-auction offer, it would be foolish not to.
AndyAudi said:
escargot said:
as of now there is NO dispute
But what about in the future, properties change hands?If you only have the neighbour (and their sols) word that it is sorted you don't really have much comfort.
It might be sorted as far as they are concerned, they might be happy - that doesn't mean that it's resolved correctly from the other side.
When you say the deeds are sorted what exactly do you mean? Do you mean that the deeds have clearly been altered recently to correct a boundary?
You could ring the land registry and talk to them about the case, they are often quite helpful.
In a normal sale you'd want some indemnity cover but I guess you've got little chance of getting that in an auction sale.
If the boundary dispute is really resolved I'd be surprised that the sellers (albeit it's a repo) are still listing it as a current dispute as it does reduce the likely price of the property hugely.
It might be sorted as far as they are concerned, they might be happy - that doesn't mean that it's resolved correctly from the other side.
When you say the deeds are sorted what exactly do you mean? Do you mean that the deeds have clearly been altered recently to correct a boundary?
You could ring the land registry and talk to them about the case, they are often quite helpful.
In a normal sale you'd want some indemnity cover but I guess you've got little chance of getting that in an auction sale.
If the boundary dispute is really resolved I'd be surprised that the sellers (albeit it's a repo) are still listing it as a current dispute as it does reduce the likely price of the property hugely.
No, the deeds have always shown the correct boundary (since the plot was sold 15 years ago), the issue was that the neighbour 'suspected' the property of breaching the boundary line.
It's quite complicated because the person who built the property was the son of the family that owned the neighbouring house. It got messy, he went bankrupt and was ostracised from the family.
It's now been proven that there is no issue with the boundary line, but nonetheless the records show a previous dispute.
It's quite complicated because the person who built the property was the son of the family that owned the neighbouring house. It got messy, he went bankrupt and was ostracised from the family.
It's now been proven that there is no issue with the boundary line, but nonetheless the records show a previous dispute.
lightweight said:
sounds like your solicitor should advise you to buy good title insurance policy its cheeep one off £200-400 and the vendor has to pay not you.
The vendor doesn't have to pay, it may agree to but it doesn't "have" to. In an auction scenario like this, if a vendor had the quick fix to a title defect I'd be surprised if it hadn't solved it and were selling the property with the benefit of the policy. Gassing Station | Business | Top of Page | What's New | My Stuff