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Buying A Repossessed Property
Date Added 05/08/2010
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Although the legal requirements when buying a repossessed property are basically the same as when buying any other, there some issues that arise from the fact that the lender has no personal knowledge of the property and that the transfer will be under a power of sale.
You can end up with a bargain, but you need to prepare for the fact that the lender’s solicitors will not be able to answer the vast majority of your enquiries, will expect you to do all the legwork (and bear any associated costs) and will set and stick to tight deadlines.
Raising Enquiries on a Repossessed House
The lender will obviously never have occupied the property and consequently will not be able to answer the usual enquiries that would be raised of an owner-occupier. There should be a Property Information Questionnaire in the Home Information Pack though it may not contain the specific information you are looking for; and in the place of a Property Information Form there will usually be another, much shorter document, which basically points out that you must rely on your own investigations.
There will be certain things, such as planning permissions, NHBC certificates, building control completion certificates that you will need but the lender will often not hold. You may ask the lender’s solicitors to obtain copies however they are under a duty to mitigate costs and will usually advise that you must obtain them at your own expense. Although they may suggest indemnity insurance for certain things, most standard policies will require you to confirm certain things that only a person with past knowledge of the property could confirm, for example in respect of lack of planning permission, that the work that has been done is at least 12 months old. You may therefore need to obtain a bespoke policy, which if it can be obtained at all would be more expensive.
As the seller won’t be able to give you any information about any disputes, it is worth trying to speak to the neighbours to check if there are any issues, such as access or boundary disputes, that you ought to be aware of.
The lender’s tactics when disposing of properties are to do so as quickly and cheaply as possible and limit any liability which it might have following to completion the minimum possible. This can be frustrating for a purchaser but it has to be remembered that they have a duty to the repossessed borrower to act in such a way as to mitigate their loss.
The original full article can be found: http://www.hip-consultant.co.uk
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