Charge on Property Title

[blue500]

Hi

(names changed to protect sellers privacy)

I am in the process of purchasing a flat in the UK and have instructed a solicitor.

I have obtained a copy of the title from the land registry for £3.

The property last sold in 2002. My query relates to a charge on the title. Now I do understand the meaning of a charge, it's purpose and the types of institutions which typically might lodge a charge on a residential property, banks, loan company ect.

On inspection I noted the following:

Registered Owner. Brian Smith of xxxxx

Lenders: Brian Smith of same address as above (owner) and Blue Trustees Ltd

On a seperate page a Charge is detailed on the Charges Register as:

Registered Charge dated: 15TH August 2010

Brian Smith of xxx (same address as owner) and Blue Trustees Ltd (Co.
Regn. No xxxxxx) of xxxxxxxx as the trustees of The Smith Pension Fund.

So in this example the current owner of the property appears to have placed a Charge on his own property. In effect, he is responsible for the Discharge of his own Charge. I consider this to be quite unusual.

I can only think of two reasons. 1. He has placed the flat into Trust. 2. He has borrowed other assets from the Smith Pension fund using the flat as security.

I do understand that the sellers solicitor normally provides an undertaking to Discharge the charge on or just before completion.

So given the unusual circumstances should I insist that the Charge is removed before exchange of contracts?

Specifically I am concerned about the tiny risk of the sellers solicitor not completing the discharge, I find out say two months later by which time, the current owner has moved abroad, extended holiday or even passed away. If the sellers solicitor forgot to Discharge the charge, upon raising the matter say in three months after completion, would the Discharge require the current owners signature?

What are your thoughts? If it were you would the above bother you at all?

Thank you so much.

[pochisoldi]

I do understand that the sellers solicitor normally provides an undertaking to Discharge the charge on or just before completion.

So given the unusual circumstances should I insist that the Charge is removed before exchange of contracts?

Specifically I am concerned about the tiny risk of the sellers solicitor not completing the discharge, I find out say two months later by which time, the current owner has moved abroad, extended holiday or even passed away. If the sellers solicitor forgot to Discharge the charge, upon raising the matter say in three months after completion, would the Discharge require the current owners signature?

What are your thoughts? If it were you would the above bother you at all?

Thank you so much.

To be honest - this is what you pay your conveyancer to do - look for potential issues, and answer your questions.

So, to put your mind at rest before you give them a call/drop them an email....

Short version: Looks like the pension trustees have given Mr Smith a mortgage, The standard conditions of sale have it covered already

Long version:
Have a look at https://www.lawsociety.org.uk/support-s ... s-of-sale/

Section 3:
3.1 Freedom from incumbrances
3.1.1 The seller is selling the property free from incumbrances, other than those mentioned In
condition 3.1.2.
3.1.2 The incumbrances subject to which the property is sold are:
(a) those specified in the contract
(b) those discoverable by inspection of the property before the date of the contract.
(d) those, other than mortgages, which the buyer knows about

Looking at Section 1.1.1 (h) "'mortgage' means a mortgage or charge securing the repayment of money"

So in short, unless you agree specifically, it's an automatic condition of sale that the charge is removed.

The conveyancer can draw your concerns to the attention of the vendor's solicitor, but I would doubt that there would be any value in making any specific provision in the contract, because you're already covered.

PochiSoldi

[Dod101]

As pochisoldi has not quite said, that is one of the reasons you employed a solicitor. It is up to him to sort this out. You do not need to concern yourself in the slightest although now that you know about it, you might wish to be pro active and ask him about it.

Dod