Buying former council house - council still has tie

helenmo

We applied for a mortgage to buy an ex-council property in Wicklow. Fine and dandy. Eventually got the mortgage approved and went to solicitor's office yesterday to sign contracts only to find that the council have a tie on the property and solicitor is saying we can't sign until we get letter of authorisation approving the sale from Wicklow council.

The property was bought by an ex-tenant 23 years and some months ago. (25 years tie). He died earlier this year (his wife died a few years prior to him) and left the house to his adult children who'd left home years ago and the property has stood empty since his death approx 9 months now.

Obviously, the family want it sold. We are first time buyers living in privately rented accommodation and want it to be our permanent residence. (For information, we relocated from UK for work reasons) and have lived in Ireland 4 years and want to settle here.

I am wondering, does the death of the previous tenant/owner affect the council tie agreement - is it relaxed or 'forgiven' and become his estate to leave to his children with no strings attached or does the agreement still stand and Wicklow Council permission still need to be given?

If anyone can help I'd appreciate any info. It was a shock yesterday thinking I had the mortgage offer and everything was good to go and went to the solicitor's office in a happy bubble thinking I was about to sign the contract only to be given this little bombshell.

Cheers
Hel

Tow

helenmo wrote: »

We are first time buyers living in privately rented accommodation and want it to be our permanent residence.

You should be fine as you are first time buyers. All the Co Cos seem to handle this rule differently. At the end of the day the proof some of them need is to getting a form stamped by Revenue stating you have never previous claimed mortgage interest relief.

djimi

Youll need to run it by the council but I would imagine that if after 23.5 years of a 25 year agreement and considering both the owners are now dead I dont imagine there would be much of a problem.

riclad

COUNCIL need to make sure you don,t own another council property,
they dont want investors buying say 3 council houses.
council houses tend to be cheaper than a private house.
They want to make sure buyer will live in the house.
council do,nt want a buy to let buyer.
if you are first time buyer you have nothing to worry about.

helenmo

Thank you everybody. Yes, definitely a first time buyer and only buying a single property that my partner and I will live in. Just hoping that the council don't take too long to process the details etc as the confirmation of mortgage offer is good for 3 months. If the process with the council takes longer than that, we'll have to reapply and probably go through the usual hilarity with the whole mortgage application procedure again...

The_Conductor

riclad wrote: »

COUNCIL need to make sure you don,t own another council property,
they dont want investors buying say 3 council houses.
council houses tend to be cheaper than a private house.
They want to make sure buyer will live in the house.
council do,nt want a buy to let buyer.
if you are first time buyer you have nothing to worry about.

Riclad- with all due respect, it is standard practice for councils and public bodies to include ties in all sales of public property- and has been for decades. The tie will normally have an expiration date. The nature of the tie could be- a clawback of a percentage of the final sale price of the property, the council itself having the right to purchase the property from the vendor before any other party- or indeed any of a long and meandering list of possible clauses they may have had in operation down the years. The main issue here is- what is the nature of the tie- and how can the council be persuaded to relinquish the legal obligation associated with the property towards them.

OP- it is up to the sellers of the property to sort this issue- not you. The property will be, for all intents and purposes, unsaleable, until such time as the tie is broken. No lender will give a potential purchaser a mortgage on a property with a pre-existing tie in place.

helenmo

Thanks again all,

Got on to the estate agent. He was hopping mad with the vendor though he was trying to keep cool and professional about it.

The estate agent then called us back much calmer saying her solicitors said they had 'presumed' the tie had passed and that they probably had a lot more experience selling ex-council properties than our solicitors! He seemed very much more satisfied with this explanation but my partner wasn't! He said 'Well, our solicitors can READ!' LOL!

Our solicitors had shown us the Land Registry document detailing when the title deeds were passed to the vendor and that, handwritten in the outline of the plot of land, the words 'Deeds passed to XXXXXX date, note: this property cannot be sold without the permission of Wicklow County Co unitl 2014' (I forget the month but think it was Aug).

Her solicitors were basically trying to say that the passing of the deeds constituted the first 'sale' and that from then on no permission was necessary. Wrong. The remainder of the tie passed to her with the title deeds. Don't think there's any ambiguity in the wording there.

So, that was Friday. Her solicitors were/are going to contact Wicklow Co Co and see what the actual, as opposed to assumed, situation is and get back to our solicitor this week. If they grant permission, well and good. If we have to be vetted, that's okay too, just hoping the process doesn't take longer than the mortgage offer (3 months) otherwise we'll have to go through the mortgage application again.

Let's see what rolls next week!

Cheers for your help again, everybody!

H

riclad

i,m not a lawyer, but i know from speaking to a council house buyer,in general ,the council have some say in the sale of an ex council house.EG if you buy a council house, then say 15 years later you want to sell it ,You have paid off the loan ,or mortgage, the council can stop the house being sold to a certain buyer.
I presume this is to stop investors ,or familys buying
2 or 3 council houses, which they may not live in .
so when a council house is sold,once, that doesn,t mean the council has no control over future sales ,
or no veto over a future buyer.
i think this is a good thing as it would not be good
to have large tracts of council estates bought up by investors ,or landlords.
i know someone ,bought a ex,council house,sold it ten years later.
there was no complications in the sale of the house,
it was bought by a couple,1st time buyers.
so in the space of 12 years it had 3 different,owners.
i, think the council had to check or approve each buyer of this house ,and could have stopped the transaction or sale,
if they wanted to do so.
i presume different councils may have different clause s
re the sale of ex council houses.
i define an ex council house as 1 that has been bought
by at least 1 person from the council .
i know there is a rule re any person buying more than 1 council house and they do check or vet, potential buyers who are in the process of buying as part of
the conveyancing procedure.
if you are saying the council could stop
this sale proceeding thru a clause,or tie on the house. if they so choose i, d agree with you.
your post does not state,is there any loan or mortgage outstanding, on this house.

Milk & Honey

The councils sell the houses to the tenant at a discount. They do not want the former tenant to sell on the house at a profit and end up back on the housing list again, seeking to become a tenant of the council once again.
The councils also want to ensure that the purchaser is a person in need of housing. They do not want their stock built as social housing turned into investment property owned by private landlords. There is usually a rule that the first three purchasers after the sale by the council must be families in need of housing.

riclad

i know a single person bought an ex council house,1st time buyer.no kids, no partner.buyer was not on the housing list.
SO council houses are cheaper, so they need rules,
otherwise too many houses would be bought by investors.
ie buyer bought house off tenant who bought it from council.

khan 19

helenmo wrote: »

We applied for a mortgage to buy an ex-council property in Wicklow. Fine and dandy. Eventually got the mortgage approved and went to solicitor's office yesterday to sign contracts only to find that the council have a tie on the property and solicitor is saying we can't sign until we get letter of authorisation approving the sale from Wicklow council.

The property was bought by an ex-tenant 23 years and some months ago. (25 years tie). He died earlier this year (his wife died a few years prior to him) and left the house to his adult children who'd left home years ago and the property has stood empty since his death approx 9 months now.

Obviously, the family want it sold. We are first time buyers living in privately rented accommodation and want it to be our permanent residence. (For information, we relocated from UK for work reasons) and have lived in Ireland 4 years and want to settle here.

I am wondering, does the death of the previous tenant/owner affect the council tie agreement - is it relaxed or 'forgiven' and become his estate to leave to his children with no strings attached or does the agreement still stand and Wicklow Council permission still need to be given?

If anyone can help I'd appreciate any info. It was a shock yesterday thinking I had the mortgage offer and everything was good to go and went to the solicitor's office in a happy bubble thinking I was about to sign the contract only to be given this little bombshell.

Cheers
Hel

if you want house swap i can my new house is longford

The_Conductor

khan 19 wrote: »

if you want house swap i can my new house is longford

Banned.