Missed Second Charge. How to get it removed?

by Readers Question

14:28 PM, 2nd April 2013
About 6 years ago

Missed Second Charge. How to get it removed?

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Missed Second Charge. How to get it removed?

Missed Second Charge. How to get it removedWe purchased a property in March 2008 from a rather devious lady who didn’t let on about an impending second charge.

The conveyancing completed and about a year later when we had to evict her for non-payment. WE had purchased the property and rented it back to her.

A copy of the title deeds has subsequently revealed this second charge. Further investigations have revealed that the time lapse between settling the account by the sellers solictors, who confirmed they had enough funds to complete, was not accurate. Meanwhile the sellers mortgage company SPML apparently moved the goal posts and did not actually release their mortgage funds for another 3 months. This delay meant we were unable to register our ownership with HMRC. During this delay a finance company which had provided a loan for the tenants lease vehicle was able to attach their second charge against our title deed. We now have this debt against our property which is nothing to do with us.

Can some suggest a course of action for us to take in order to get the second charge removed please?

Chris Mayger



Comments

Mark Alexander

14:31 PM, 2nd April 2013
About 6 years ago

Hi Chris

What have your solicitors said about this problem?

Chris Mayger

11:59 AM, 3rd April 2013
About 6 years ago

Hello MarkOur solicitor says he investigated the matter with the Law Society into whether or not the seller’s solicitor had breached his undertaking to him (our solicitor) to repay the SPML mortgage. The Law Society found that the seller’s solicitor was entitled to accept in good faith SPML’s representations made in April 2008 that the mortgage had been repaid – even though they did not release their mortgage until July! Our solicitor further claims that his insurers don’t believe he has been negligent because he submitted our application for registration within the time limits and did all that was required of him.We have used this guy for most of our conveyancing and he has always done a brilliant job for us so we are not comfortable with the idea of suing him for breach of contract as he suggests we do (he could then in turn sue SPML for negligence to recover his losses)He is having a tough time at the moment with his business and it seems a bit ungrateful of us to add to his woes, but on the other hand there is this £8-10 K loan accruing interest against our property which we have nothing to do with but could still end up with paying.

Mark Alexander

14:25 PM, 3rd April 2013
About 6 years ago

Hi Chris, if your solicitor is advising you to sue him that's what you should do. He will claim on his Professional Indemnity insurance anyway so it should not hurt him financially.

Tony Lilleystone

17:10 PM, 4th April 2013
About 6 years ago

Hi Chris,
I think you should press your Solicitor to sort this problem out for you without fee – after all you employed him to buy the property without this second charge, and it's not your fault it has been registered! If you have been a good client he should be prepared to remedy things, and hopefully keep you as a client.
If he won’t then obviously you can consider suing your Solicitor, but also think about making a complaint through the Legal Ombudsman http://www.legalombudsman.org.uk/consumer/index.html (There may be time limits on this, so contact them asap.)
Ask your Solicitor for a copy of your file, if you haven’t already done so. Having a copy would help in making a formal complaint, or if you decide to sue your original solicitor.
It is just possible that the Land Registry has made a mistake. Despite their normal attitude of infallibility they aren’t always right!
Buyers’ solicitors should make land registry searches before completion to ensure that new charges by the seller don’t get slipped in on the title, so you need to check that this was done. If there was a delay in getting the mortgage discharged from SPML, were new searches obtained?
Accepting undertakings from sellers’ solicitors to get existing mortgages is common practice, but the Law Society has issued advice to solicitors as to when such undertaking should be accepted. Was your solicitor justified in accepting an undertaking at the time? (I think SPML is Southern Pacific Mortgages, which was owned by Lehman Bros. who were in difficulties in 2008.)

Puzzler

11:29 AM, 5th April 2013
About 6 years ago

Have you tried contacting the holder of the second charge and telling them It is not your debt?

13:25 PM, 5th April 2013
About 6 years ago

Hi, Buyer beware. as buyer you or your lawyer must get the procedure right.
not clear if you purchased and paid cash or whether you secured the property with the aid of a mortgage.
your registration as buyer seems to have been completed (you now being shown as the registered proprietor) but that your lawyer did not send in the correct papers for the discharge of the vendors mortgage. In that case the Registry will complete your registration and leave the old mortgage on the title . At that stage it will be a First charge against the property. if you obtained a mortgage to buy then your lenders will expect a First Charge but they in reality will only have a Second Charge. That is serious you are in breach of your loan terms and the Lawyer will be in breach of his instructions if he handled the new mortgage on behalf of your lender. You need to clarify exactly what the order of events were so that you can then understand the next actions you need to take. No way can a second charge be registered relating to someone else after you had been registered as Proprietor.

Chris Mayger

14:24 PM, 9th April 2013
About 6 years ago

Hi All. A big thank you to you guys who posted in response to my quiery. I am pleased to report that having downloaded a new copy of the Title Deed, all references to a second charge have now been removed.

Thanks again!

Mark Alexander

14:32 PM, 9th April 2013
About 6 years ago

That's fantastic news Chris, thanks for sharing it with us.


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