Buying a rented property, however builder gone bankrupt!

JR23

Hi all, looking for advice on what to do next, never dealt with such a mess, I'll keep it short, basically I had agreed to buy a house from a developer! Previously I had been renting this property on a rent to buy basis, we had agreed prices and deposits(rent paid over previous years. Mortgage was in its final stage and we get a letter saying the bulilder has been declared bankrupt and that we have to deal with insolvency ireland. No mention of buying the house just where to put rent. I'm worried now we won't be able to buy at our agreed price. Any advice much appreciated. Thanks.

L1011

First, say goodbye to any "to buy" elements of rent paid - they're gone. Unsecured creditor of the broke builder now.

You'd want to contact the liquidator to offer to buy. If the market price has risen you may not get it at the previous price although they may value someone who can make a quick purchase

JR23

L1011 wrote: »

First, say goodbye to any "to buy" elements of rent paid - they're gone. Unsecured creditor of the broke builder now.

You'd want to contact the liquidator to offer to buy. If the market price has risen you may not get it at the previous price although they may value someone who can make a quick purchase

So you reckon my deposit is gone and that if I was to buy form the liquidator I'd have to come up with another deposit! I don't think the liquidator would agree to the previous price, it was a great deal.

Michael D Not Higgins

JR23 wrote: »

So you reckon my deposit is gone and that if I was to buy form the liquidator I'd have to come up with another deposit! I don't think the liquidator would agree to the previous price, it was a great deal.

Your deposit is definitely gone and the liquidator won't need a deposit, your bank will. Even then, I've heard stories of banks not accepting the rent already paid as the deposit.

JR23

The bank accepted that our rent was a deposit, that was a stumbling block alright. I wonder would the liquidator take our offer considering it's more or less ready to go or would they be looking to make more money?

davo10

OP have you a contract for the rent to buy or was it just a gentlemans agreement? Did you engage a solicitor to draw up this deal with the developer?

L1011

JR23 wrote: »

So you reckon my deposit is gone and that if I was to buy form the liquidator I'd have to come up with another deposit!

Yes.

I'm amazed the bank accepted it as a deposit to be honest - that's why I didn't mention that you'd need to get a new one. Until recently they were not accepting rent-to-buy deposits as such at all.

You're going to need a deposit and to pay full market value for the house, realistically.

JR23 wrote: »

I wonder would the liquidator take our offer considering it's more or less ready to go or would they be looking to make more money?

If its in a desirable area, they'll wait and get the market value. If its in a less desirable area, you may have a chance but its likely your mortgage terms will need to be renegotiated as its not the same scenario with the deposit as before.

JR23

davo10 wrote: »

OP have you a contract for the rent to buy or was it just a gentlemans agreement? Did you engage a solicitor to draw up this deal with the developer?

Y s we have a contract regarding the rent to buy, we have letter to say that we have paid x amount of a deposit too. Yes solicitors were involved, by both parties, contracts were exchanged too but nothing signed.

davo10

JR23 wrote: »

Y s we have a contract regarding the rent to buy, we have letter to say that we have paid x amount of a deposit too. Yes solicitors were involved, by both parties, contracts were exchanged too but nothing signed.

Nothing signed? You need to talk to your solicitor asap.

JR23

davo10 wrote: »

Nothing signed? You need to talk to your solicitor asap.

No nothing signed, yeah I'll be on to them first thing, see where we stand! Some mess! :mad:

The_Conductor

Providing you are offering the current market price for the property- you should be fine. I would ignore any rent paid already- as you don't have a signed contract- you will probably be back at the first stage again.........

I don't know how you got the bank to agree to rent paid being the deposit- central bank guidance prohibits this.

Talk to your solicitor- but unfortunately I think you're at the back of a long queue regarding any monies you have handed over to the developer thus far.

Also- if you pay rent to the receiver- you can be certain its 'rent' and not anything else- you need to sit down and hammer out something with them too........ Emphasise to your solicitor that you need the receiver dealt with first of all- and immediately- as any payments to them as rent collectors- most certainly will not go towards anything other than the receivers day-to-day running costs.

It is a mess- and I'm sorry you're in it.

Mrs OBumble

Maybe I'm just a mean cow.

But I cannot help thinking that if you have nothing signed, then you do NOT have a rent to buy contract or agreement.

Instead, you have a rent-to-buy idea.

And you have possibly been doing something very silly (to put it mildly) by paying higher-than-market-rate rent based on this idea.

OP, I hope you are only a few weeks into this situation, rather than months or years, and that your current rent isn't much more than current market rate (And if you are, then the builder has some serious questions to answer: s/he must have known this was coming). But my guess is that this has been a very expensive way for you to learn that contracts need signatures or they are worthless.

JR23

Mrs OBumble wrote: »

Maybe I'm just a mean cow.

But I cannot help thinking that if you have nothing signed, then you do NOT have a rent to buy contract or agreement.

Instead, you have a rent-to-buy idea.

And you have possibly been doing something very silly (to put it mildly) by paying higher-than-market-rate rent based on this idea.

OP, I hope you are only a few weeks into this situation, rather than months or years, and that your current rent isn't much more than current market rate (And if you are, then the builder has some serious questions to answer: s/he must have known this was coming). But my guess is that this has been a very expensive way for you to learn that contracts need signatures or they are worthless.

Our rent to buy contracts were signed by both parties and witnessed by our solicitor, the contracts regarding the buying of the house were exchanged but weren't signed as we were waiting on confirmation of our mortgage.
At the end of the day I'm beginning to think that it doesn' matter what we have paid or signed, we just have to start again.

spaceHopper

You need to talk to the solicitor, you've got a rent to buy contract and you might be able to register that as a lean or claim against the property, they would make it impossible for the receiver to sell it to anybody but you and you'd stand a better chance of sorting it out.

davo10

spaceHopper wrote: »

You need to talk to the solicitor, you've got a rent to buy contract and you might be able to register that as a lean or claim against the property, they would make it impossible for the receiver to sell it to anybody but you and you'd stand a better chance of sorting it out.

That's the crux of the matter, OP doesn't have a contract for purchase of house as it was subject to mortgage approval and OP said it was not signed.

spaceHopper

davo10 wrote: »

That's the crux of the matter, OP doesn't have a contract for purchase of house as it was subject to mortgage approval and OP said it was not signed.

He said "Our rent to buy contracts were signed by both parties and witnessed by our solicitor, "

If he can make it impossible for the house to be sold you anybody else he might be able to do a deal with the receiver.

davo10

spaceHopper wrote: »

He said "Our rent to buy contracts were signed by both parties and witnessed by our solicitor, "

If he can make it impossible for the house to be sold you anybody else he might be able to do a deal with the receiver.

I suspect the rent-to-buy contract was in effect the equivalent of a lease agreement which stated that rent paid would be deducted from overall price of house when sale eventually went through, but the actual purchase contract does not appear to have been signed.