Avoiding a spanner in the works when selling your property
We frequently see issues cropping up during the home buying and selling process which leads to a lot of unnecessary stress and additional expense for both sellers and purchasers. Whilst most issues can be dealt with, it can be a shock when problems only come to light after a sale and purchase agreement is signed and well under way.
For the seller, some issues can include: certificate of title defects, incorrect cross-leases and flats plans, incomplete Council property files, or a revealing Building Inspection Report and so on. While title, cross lease or flats plan are hardly ever remedied in practice due to the cost, there are often unexpected and costly items relating to the house itself that may need attention before a buyer will agree to continuing with the contract. Depending on the nature of the defects or problems raised by your Building Inspection Report, it is usually the seller who finds themselves on the end of sorting the issues and at their cost. Other times the parties can negotiate a price reductions to compensate the purchaser for problems which need remedying but could be dealt with at a later date. For the purchaser, such issues can also increase their legal costs as they need to obtain guidance and advice from their solicitor to protect their interests under the signed agreement.
The problem is this: basically, a purchasers usually needs a mortgage and Lenders want to be sure that the property is worth the value being loaned. If there are defects like those described above this affects the Lender’s security and could undermine a property’s value, and potentially result in a lower sale price in a forced or mortgagee sale situation. This may also result in a loan shortfall for which the borrower remains responsible to the Lender, even after the house is sold. Market conditions can also affect sale price, but that is a separate factor.
So, if you’re selling I’d recommend that you do your own homework first. Ask your solicitor obtain an up-to-date copy of your title to check it is in order. Next order a copy of your Council property file to check that your building permits and consents are all signed off, as well as checking that what is on the property file reflects what is at your home. If it transpires something isn’t right ask your solicitor to talk to you about the best and most practical way to fix the problems, or whether disclosure in the agreement for sale and purchase at the outset might be another option. You may even want to go as far as obtaining your own Building Report, although a purchaser is unlikely to want to rely on the seller's report nor pay toward it. But getting things in order earlier rather than risking a costly and stressful spanner in the works later can help reduce any contract potentially ending up in jeopardy. or falling over completely.