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Thomas, Lawyer
Category: UK Law
Satisfied Customers: 7435
Experience:  BA (Hons), PgDip, Practising Solicitor
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I own a property divided into 4 flats. My bank, whom I had

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I own a property divided into 4 flats. My bank, whom I had a loan with, obtained final charging orders against the 4 flats.
When I bought the property initially I was lent £80,000 by a friend although his interest was never put on the register. Now the bank are threatening to force me to sell the properties to repay their loan.
What can I do to protect my friends deposit? If I am forced to sell now he would get nothing. Surely, if I can prove he lent me the money to buy the house then something can be done to secure his money.
Thanks for your question.
To enable me to answer your question could you please respond to the following using the same numbering:-
1. Did a solicitor act on your behalf in the purchase
2. Did you tell them about your friend lending you money
Kind regards.
Customer: replied 5 years ago.
Hi Tom,

Yes, thanks for the Q's.
1) I did use a solicitors
2) I don't think I told the solicitor. The thing is, you usually don't want the mortgage co. knowing that you have borrowed money to use as a deposit as they tend to like you to have this as your own savings.

I have bank statements showing the loan made to me and I have made some repayments over the last 3 years. Also, my accountant has been lodging my accounts taking into consideration the interest I am paying my friend for the loan.



Hi Andy,

I'lll be able to answer in an hour.

Kind regards,


HI Andy,

I’m very sorry it’s taken some time for me to get back to you, I’m afraid that I had connectivity issues over the weekend.

If it was intended that your friend would gain an interest in the property as a result of having lent you the money then this should really have been evidenced by both of you executing a Declaration Of Trust at the time which stated that you had x% interest in the property with him having y%. Your creditors can only claim against those assets which are yours, they cannot claim against those which aren’t and so this would have protected his interest in the property to the extent detailed in the declaration.

You can execute a declaration of trust now, stating that he has an interest in the property. The difficulty will be that your creditors will claim that either this is an artificial transaction designed to put the interest outside your asset pool (in which case they can apply to have it set aside OR they will argue that it was not evidenced in a Declaration because he was only a simply creditor by way of a loan and that he should not now be regarded to have an interest in the property because it apparantely suitable plans to acknowledge this were not actioned at the time of transfer.

You will have to gather the sundry evidence of the transfer of money (ie. the bank statements to which you refer) and any other supporting evidence from the accountant or other sources which indicate your intention at the time. You may then have to fight it out with the creditors I’m afraid.

It’s not an ideal situation and I can see it being resisted by your creditors unfortunately

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Kind regards,

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