house repossession

In the current climate I act for several individuals who have purchased or are in the process of purchasing property from a receiver.

While very often the title being furnished is in order in that you have been furnished with a File Plan Folio showing the vendors (on whose behalf the receiver is acting) as full owners with an absolute title there are other issues which can cause difficulty for a purchaser and which need to be brought to your clients attention at an early stage.

Principal among these is the fact that a receiver will give no warranty as to planning matters, identity, and access. The reason for this is that the receiver is selling as agent of the vendor and has no personal knowledge of the property in sale and will rely on that fact in the Contract.

The receiver particularly in relation to planning matters will only furnish the planning documents available to him and therefore whether your client is a cash buyer or not they should be advised to have their own engineer carry out a full survey of the property together with an inspection of the planning file in its entirety. You should also advise the purchaser to have their engineer carry out a full planning search if necessary so that the purchaser is buying with full knowledge of the planning position pertaining to the property in sale.

It is always well to remember that the day you buy is the day you sell. While your client may be a cash buyer a person buying from them at a future date may not be. As well as that you client may at a later stage require finance to develop the property which would involve you as the solicitor having to certify title to the bank. Therefore and in particular in relation to planning matters it is essential that any purchaser is  advised to carry out a full survey of the property in advance of completing Contracts.

The receiver will not be giving any warranty as to identity. So again it is incumbent on the purchaser to have their own engineer verify that the boundaries of the property on the ground correspond with the boundaries as per the title map furnished.   The purchasers engineer should also be instructed to carry out a survey to ensure that all necessary services for the property eg: septic tank, percolation area, water well, pipes, drains, sewers etc are all wholly located within the confines of the property up to the point of connection with the public road.

You may not be furnished with a letter or certificate confirming the position in relation to the roads and services and whether same have been taken in charge.  Again your engineer should be asked to verify the position if possible. Failing that you should advise your client that they should at their own cost procure an appropriate letter from the Local Authority to certify the position. If there was a difficulty surrounding access the purchaser would need to know this at an early stage. It may well be that the property does in fact abut a public road and in that case there is no difficulty. However if the access to the property is via a private roadway then one would need to ensure that all appropriate easements are in place. If the access roadway is a private roadway then your client should be advised to procure some information locally ie from the other road users as to the arrangements in place as regards maintenance, upkeep and insurance.

You should also advise your client that while the receiver / vendor would be obliged to ensure that all property taxes are paid up to date ie NPPR, Household Charge and Local Property Tax very often the issue of outstanding utility bills would be left to your client.

Full investigations must be made as a receiver will have little knowledge of a property

Full investigations must be made as a receiver will have little knowledge of a property

As well as that if the property in sale has not been used for a long time it may well be the case that both the ESB and the water have been disconnected. In which case a substantial reconnection fee would be payable and again the receiver will insist that this charge is borne by the purchaser. The cost of a water reconnection fee for example can be quite substantial being in the region of fifteen hundred euro approximately.  Again your client should be made aware of all these additional or potential outlays at the outset.

Another matter which should be checked carefully at the outset is the position as regards burdens on title and in particular the position as regards any registered judgement mortgages. If there are judgement mortgages registered on the title in respect of which the banks charge ranks in priority then you should obtain written confirmation at the outset that upon completion of the sale the property would be transferred by the Bank as mortgagee in possession as opposed to obtaining a transfer deed from the receiver as agent of the vendor. A transfer deed signed by the Bank mortgagee in possession would have the effect of clearing from the title all registered judgement mortgages in respect of which the Banks security ranks in priority.  Therefore it is essential that you obtain at the very outset an up to date File Plan Folio to show the current status of all burdens registered on title together with any dealings pending pertaining to the property. It goes without saying that if the File Plan Folio shows dealings pending the status of these dealings pending should be ascertained in full prior to signing Contracts.

While your own client may well take a view that they are purchasing the property at a knockdown price and therefore represents good value you should not be afraid to advise your client not to proceed if there are any title issues, planning/ boundary issues or issues regarding access as same could seriously endanger any subsequent sale or mortgage of the property.

For more information please contact Emmet McCann Solicitor