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Ronan
Ronan, Solicitor
Category: Republic of Ireland Law
Satisfied Customers: 2245
Experience:  B. Corp Law, Ll.B. Dip Comm Prop. In general practice for more then 6 years
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How is a buyer protected when purchasing a house sold by a

This answer was rated:

How is a buyer protected when purchasing a house sold by a negative equity borrower without the banks permission.

It just seems strange that the mortgagee can sell the house complete the transaction and I assume the solicitor sends the money to the bank holding the mortgage.

How is the buyer protected if the mortgage is secured against the house?
Does the buyers solicitor not check that their is no mortgage against the property?
Isn't that what we pay solicitors to do when we buy a house?

Buachaill :

1. Provided the buyer is a bona fide purchaser for full value, the buyer gets good title to the house once the monies are paid over to the seller's solicitor. It is up to the seller's solicitor to ensure that the monies are applied first in discharge of the mortgage. However, neither the buyer, nor his solicitor, have any duty in this regard. Once the buyer pays full value without notice of any defect in title, then the buyer gets good title and a discharge from any liability arising from the transaction. The buyer's solicitor is required to check whether there is a mortgage against the property and that this will be discharged before title is furnished. This is simply dealt with by way of solicitor's undertaking within the transaction. However, once the seller's solicitor gives such an undertaking to discharge the mortgage, then the buyer and his solicitor are absolved from any liability in relation to the mortgage.

Buachaill :

Please RATE the Answer positively so that I may get paid

Customer:

"The buyer's solicitor is required to check whether there is a mortgage against the property and that this will be discharged before title is furnished."

Customer:

The buyer's solicitor is required to check whether there is a mortgage against the property and that this will be discharged before title is furnished.

Customer:

Will the mortgage be discharged if the property is in negative equity?

Customer:

Frys are interpreting the 2009 act:

Customer:

the mortgagee’s power of sale cannot be exercised unless 28 days’ prior notice has been
served on the mortgagor and either a court order is obtained for the sale or the mortgagor
consents in writing to it (such consent to be given not more than seven days before the power
of sale is exercised). These provisions cannot be contracted out of in relation to housing loan
mortgages;
• subject to the terms of a court order, a mortgagee in possession must take steps within a
reasonable time either to sell the mortgaged property or, if a sale is not appropriate, to lease it
and use the rent to reduce accruing interest. Traditionally, a mortgagee was allowed to choose
the timing of a sale. A similar obligation is placed on a receiver appointed by a mortgagee.
These provisions cannot be excluded from housing loan mortgages.

Customer:

I got mixed up with my Morgegor and Morgagee.....

Ther is an special condition contained in the contract for sale which requires the vendors solicitor to give an undertaking that he will discharge the mortgage from the proceeds of sale. He should also provide a letter of consent from the bank allowing the mortgage to be redeemed for an amount less then the purchase price. It is not possible for a vendor to sell a negative equity property without the consent of the bank unless the vendor has own funds to cover the balance of the mortgage .

To answer your specific questions

1. There is no protection for the buyer and they will have purchase a property burdened with another person mortgage . There only recourse would be to sue their solicitor for negligence in such a scenario

2 . Yes, absolutely there is an obligation on the purchaser,s solicitor to check the title in relation to mortgages and other burdens. If they exist, he should ensure there is a mechanism for their removal from title on closing of the purchase

3. Yes that is exactly what you pay your solicitor to do
Ronan, Solicitor
Satisfied Customers: 2245
Experience: B. Corp Law, Ll.B. Dip Comm Prop. In general practice for more then 6 years
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