Western Mail Property Doctor Column #36
Issued on behalf of Emyr Pierce Solicitors
I am buying my parents’ house at significantly less than its market value. I’m told this could cause delays in the process. Is this true?
Whether it’s your parents’ house or anyone else’s house, the principles are the same – providing your parents are not remaining in the home. This is deemed a transaction at an under value because there is an element of gift involved. This raises certain issues that shouldn’t necessarily delay the process, but need to be addressed. Under the insolvency laws should the seller be declared bankrupt within five years of making a gift then the transaction can be set aside by the Official Receiver as being an attempt to defraud creditors. To protect the buyer – and his mortgage company – from this situation you may have to take out a Deed of Gift indemnity policy to cover the element of gift, and will have to get a Declaration from the seller that he is solvent at the date of the gift. It is also essential that the existence of an element of gift is drawn to the attention of your mortgage company.
I’m a first-time buyer, but am told the Lenders have stopped all 100 per cent mortgages. I have no deposit to put down. Does that mean I have no chance of getting on the property ladder?
A popular way of overcoming this particular problem is with what is known as a Vendor Gifted Deposit. If you want to borrow £100,000 but the mortgage company will only lend 90 per cent of the market value then you are clearly going to be short of £10,000. Sometimes to ensure the sale, the vendor will agree to forgo that difference. That is known as a Vendor Gifted Deposit and in a case like this it is crucial that it is declared openly and in detail so the mortgage company is lending in the full knowledge of such gifted deposit. Alternatively, the seller may agree to forgo the balance of the purchase price because he knows the buyer cannot afford the full amount immediately. In this case the mortgage company will provide 90 per cent of the purchase price, and the seller registers a charge at the Land Registry to secure any balance owing to him that he requires to be paid to him at some point in the future. Once again it is essential to report the position accurately to the lender as it specifically asks in the application form for confirmation that the borrower is providing the balance of the purchase price from his own funds. If this is not the case the lender may still accept the position, but failure to accurately report it may cause you and your legal advisors problems.
My next door neighbour’s dog is left outside all day and barks all the time. I have tried without joy to reason with the neighbour. What can I do to stop the noise?
This actually can depend on where you live. If you live in a flat the chances are the dog shouldn’t be there in the first place. If this is the case, then get in touch with your landlord as the neighbour could be in breach of the covenant in the lease specifying that you are not to be a nuisance to your neighbours. However, if the dog lives in a house then your best bet could be to report the noise nuisance to your local council. There is also the possibility of turning to the RSPCA for help. After all, dogs that bark all day long are likely to have been abandoned and neglected. The other alternative is to speak to your solicitor about sending your neighbour a letter complaining of the noise and appealing to him to take steps to stop the dog from nuisance barking.
