HOW RED TAPE CAN TRIP YOU UP
By Nigel Hunter Of Hull Solicitors Payne and Payne.


Buying a new home is one of the most exciting and rewarding events in most people’s lives but occasionally it can also be frustrating.

Solicitors and professional conveyancers work hard to provide a fast and efficient service but often the process is delayed by a series of legal and financial hurdles that have to be overcome before the transaction can proceed.

Some of these arise in fulfilling the requirements of mortgage lenders who will not provide a mortgage until a certificate confirming that all specific conditions on the mortgage offer have been satisfied and all conditions in the Council of Mortgage Lenders handbook have also been satisfied.

There can be a whole raft of potential stumbling blocks some of which must seem quite bizarre to the average purchaser or seller.

For example, many properties in Hull are subject to restrictive covenants dating back to the early 1900's. These covenants may well refer to you not using your property as a slaughterhouse or for the treatment of contagious diseases or for the deposit of night soil, manure or other offensive matters.

While these covenants may well be out of date, unless they are listed specifically in the Title Deeds, many lenders will insist on indemnity insurance being provided for the missing documents. The indemnity insurance premium has to be paid by either the seller or the buyer if the seller refuses.

There are many properties in Kingston upon Hull that are served by rear tenfoots or side/rear passageways. The rights of way may have been in existence for 100 years. However, if there are no specific rights of way referred to in the Title Deeds again an indemnity policy may be called for by the buyers solicitor.

If the seller has been the recorded owner of the property being sold at the Land Registry for less than six months then subject to certain exclusions, this information must be referred to the lender so they can give their approval to the sale proceeding.

Most lenders will require an explanation as to why the property is being sold by the seller in less than six months from when he became the registered proprietor.

The lender will then consider the facts and may take advice from their own valuer as to whether the rapid sale and/or increase in price is justified.
A buyer cannot proceed to an exchange of Contracts until such time as his lender has approved the sale.

If an extension has been built at the property being sold the seller must produce the necessary planning consents and/or building regulation approvals. If no such consents are available a buyer will insist on an indemnity policy being provided by an insurance company for lack of consents.

The cost of the indemnity policy would normally fall upon the seller though if the seller refuses to provide an indemnity policy the buyer will be obliged to pay the indemnity premium himself to enable his solicitor to provide the required Certificate of Title to the lender.

Following a survey of the property a buyer will often negotiate an allowance towards the cost of essential repairs. Irrespective of the amount of the allowance negotiated this must be reported to the lender for their approval for the mortgage to proceed.

As most allowances are negotiated immediately before Contracts are exchanged this can be extremely frustrating for all parties in a chain waiting for the lender to confirm that the mortgage may proceed.

Unfortunately, there are many more conditions that your solicitor must comply with to satisfy the Council of Mortgage Lenders handbook before you canproceed to an exchange of Contracts.

Your solicitor will explain to you any delays that may be caused by having to satisfy your lender on the conditions set out in the Lenders handbook.

Press Contact: Steve Verrill 01430 871166