Purchasing House Wiht 2Nd Charge

[Fratton99]

I thought I was going to exchange on the sale of my house and the purchase of a new house, when at the 11th hr a 2nd charge was found on the house i was buying. After several weeks with no information from anyone I am non the wiser on where i am at. At what point in the sale of a house should the subject of a 2nd charge have been found, during the initial searches, by the venders solicitors?

[buildersmate]

A second charge is typically a secured loan taken out by the home owner, or it could be charge put on by a creditor following a court order in respect of a debt. Either way, its pretty appalling that the vendor didn't mention it to his solicitor, and worse that the vendor's solicitor didn't spot it.

The searches are done by YOUR solicitor. He would have spotted the 2 charges on the register but wouldn't necessarily have thought anything of it as he would not know the total amount outstanding.

However, I don't understand why it is causing an issue. All it means is that the vendor's solicitor, when he receives the money from you, doles out a wodge to the mortgage company (the 1st charge) then doles out a second wodge to clear the 2nd charge debt. What's left goes to the vendor. The only way its a problem is if the sum of the two charges is greater than the price you are paying.
Get onto your solicitor and ask him to find out why it is a problem (or phone your vendor yourself).

[DTCwordfan]

spot on, buildersmate.....

[Pooka1950]

//The only way its a problem is if the sum of the two charges is greater than the price you are paying.//

That would be a problem for the buyer though wouldn't it? He would presumably have to sort it out by taking a further loan from his mortgage company to clear any charge left on the property. Would it impact the buyer? Would it just delay matters? I (obviously) know nothing about this but am interested.

[buildersmate]

Yes, precisely that - a delay, whilst the wheels that often grind so slowly between the legal profession and the financial services industry sort it out.

[Pooka1950]

Thanks buildersmate!

[Eve]

It may also depend when the charge was put on - it could be very recent, maybe a creditor who has got wind of the sale, wanting to secure a debt, an ex-partner etc...

It may be the second charge is disputed in some way and the seller doesn't want to have to pay to have it removed quickly.

[themas]

It may be impossible or very difficult for the vendor to sort it out. If the total of the 2 charges exceeds the selling price the holder of the second charge can refuse to agree to the sale. It could well be that the vendor's financial circumstances are such that he/she can't get another loan to clear the rest of the second charge. The only possible action then would be for him to apply to Court for an order to override the second charge holder's veto. The Court may or may not agree to this.