Power of Attorney not evident in the Deed of Charge

Seregwethrin

Hi,

My solicitor told me the property I am buying has this issue on the documents.

Receiver's Power of Sale
Specific Power of Attorney, not evident in the Deed of Charge and the Vendor won't furnish the General Conditions of the Mortgage to prove one exists.
We shall require vendor's solicitor's undertaking to deal with any PRA queries that may be raised in respect of this.

This is not making much sense to me.

Does anyone know:
How serious this is?
How much effect it should have on the sale now and in the future?
Any workaround/solution suggestions for this issue?

Thank you!

Dolbhad

Seregwethrin wrote: »

Hi,

My solicitor told me the property I am buying has this issue on the documents.

Receiver's Power of Sale
Specific Power of Attorney, not evident in the Deed of Charge and the Vendor won't furnish the General Conditions of the Mortgage to prove one exists.
We shall require vendor's solicitor's undertaking to deal with any PRA queries that may be raised in respect of this.

This is not making much sense to me.

Does anyone know:
How serious this is?
How much effect it should have on the sale now and in the future?
Any workaround/solution suggestions for this issue?

Thank you!

Your legal advisor is the best person to advise on the implications of this so you should ask them as the first point of call. As far as I can make it from what you’ve said it’s a big issue.

The land registry requires proof that the person selling the house has the power to do so and without that, you can’t be registered as owner.

Seregwethrin

I see, so that's what it is!
My legal advisor/conveyancing solicitor only told me it is missing but doesn't explain what a Deed of Charge is etc.

This makes sense more now. I knew it was a bank sale but I saw another financial company's name on the documents, so they are the receivers.
So, the bank appointed them to sell the house with Deed of Charge then.

I will talk with solicitors again to see if they can find a solution to this.

One more question, if land registry approves the sale with an additional document or some kind of proof, after that approval no one can come back claim the house back from me, right? I would be the owner without a doubt?

I am asking that because my solicitor's response was "We shall require your (vendors) undertaking to deal with any PRA queries". That makes me think they can satisfy that somehow maybe with additional documents..?

Dolbhad

Seregwethrin wrote: »

I see, so that's what it is!
My legal advisor/conveyancing solicitor only told me it is missing but doesn't explain what a Deed of Charge is etc.

This makes sense more now. I knew it was a bank sale but I saw another financial company's name on the documents, so they are the receivers.
So, the bank appointed them to sell the house with Deed of Charge then.

I will talk with solicitors again to see if they can find a solution to this.

One more question, if land registry approves the sale with an additional document or some kind of proof, after that approval no one can come back claim the house back from me, right? I would be the owner without a doubt?

I am asking that because my solicitor's response was "We shall require your (vendors) undertaking to deal with any PRA queries". That makes me think they can satisfy that somehow maybe with additional documents..?

Yes once your the registered owner on the folio you don’t look behind that. But that’s why the land registry have high requirements to be registered owner and your solicitor needs to ensure any queries raised will be answered. There have been cases where banks have gone sale agreed on properties, usually with auctions, and turns out the legal paperwork wasn’t in order either when the charge was taken out first or when they appointed a receiver.

There may be no solution and you may not be able to buy the property off them.

Are you getting a mortgage? If so, your solicitor is giving a legal undertaking to them also that any previous charges will be removed from the property, your banks charge will be put in place as first and you will be registered as owner. If your solicitor has any doubts on that they won’t be able to proceed with it also.

Seregwethrin

Dolbhad wrote: »

Are you getting a mortgage? If so, your solicitor is giving a legal undertaking to them also that any previous charges will be removed from the property, your banks charge will be put in place as first and you will be registered as owner. If your solicitor has any doubts on that they won’t be able to proceed with it also.

Yes, getting it with mortgage.

My solicitor is not very happy as well, we are not proceeding with sale and she is sending enquiries to their solicitors.

Can't the receiver go to the bank/Title owner and get this Power of Charge sorted?

Dolbhad

Seregwethrin wrote: »

Yes, getting it with mortgage.

My solicitor is not very happy as well, we are not proceeding with sale and she is sending enquiries to their solicitors.

Can't the receiver go to the bank/Title owner and get this Power of Charge sorted?

The charge needs to be signed by the borrower (registered owner of the property) so any changes would likely need to be signed by the borrower - which in this case has had their house repossessed. They are not going to be helping the bank sort out a mess the bank made in order to sell their house.

Seregwethrin

Yeah, I don't think they will help because the property has some architectural documents missing.
The owner probably threw it away after bank repossessed the house.
Who would go to bank and say "Hey you took off my house but forgot to take these handy documents".

I was thinking the registered owner is the bank, but that didn't explain why it didn't show up on PropertyPriceRegister.
So now I am seeing the bank repossessed the property without being the new owner and the owner is still the original. Then the bank appointed a financial company to sell the house but the Power of Charge is missing on documents.

In the meantime the appointed financial company is likely to be paid by the bank continuously so it may not be their best interest to sell the property quickly.

Am I correct with these titles?

Financial company who's selling it -> Receiver
Bank -> Vendor?

Dolbhad

Seregwethrin wrote: »

Yeah, I don't think they will help because the property has some architectural documents missing.
The owner probably threw it away after bank repossessed the house.
Who would go to bank and say "Hey you took off my house but forgot to take these handy documents".

I was thinking the registered owner is the bank, but that didn't explain why it didn't show up on PropertyPriceRegister.
So now I am seeing the bank repossessed the property but the owner is still the original owner. Then the bank appointed a financial company to sell the house but the Power of Charge is missing on documents.

In the meantime the appointed financial company is likely to be paid by the bank continuously so it may not be their best interest to sell the property quickly.

Am I correct with these titles?

Financial company who's selling it -> Receiver
Bank -> Vendor?

That’s it - the borrower is still the registered owner but in reality has nothing to do with the transaction and won’t get the sale proceeds. Since the registered owner isn’t signing the transfer, the land registry will require proof that the bank have taken the house legally and can sell it. The borrower isn’t going to do anything to help the bank.

When you take out a mortgage now you will sign a deed of charge that gives a power of sale to the bank in general mortgage conditions if don’t pay the mortgage. Bank get a court order to repossess the house. They then give power of sale to a receiver to do all the work. There have been issues where general conditions didn’t have power of sale or issue with court order during the boom. This is why your solicitor was looking for general conditions or the power of sale court order.

Even if all the paperwork is there for planning etc bank sales always exclude any warranty regardless and make your solicitor and engineer look into it which makes you incur more fees.

Seregwethrin

Many thanks for all these Dolbhad.
Now when speaking to the solicitor and to the agent I can have better conversations.

Much much appreciated.