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  • Auction Tribe

    Land Registry Charge - auction property

    Hi, I am looking at register of property which is being sold via auction and I can see there:
    "REGISTERED CHARGE 26/11/2018
    Proprietor: Together Commercial Finance Ltd
    The proprietor of the Charge dated 26 November 2018 referred to above is under an obligation to make further advances. These advances will have priority to the extent afforded by section 49(3) Land Registration Act 2002.
    And also another part further up which says:
    "RESTRICTION: No disposition of the registered estate by the proprietor of the registered estate is to be registered without a written consent signed by the proprietor for the time being of the Charge dated 26 November 2018 in favour of Together Commercial Finance Ltd referred to in the Charges Register."

    If I understand it well, current owner bought this property on 26/11/2018 using loan from Together Commercial Finance Ltd (probably bridging as property needs refurb) but is now selling it via auction. 

    My major question is - if I would buy such property, would I need to pay this loan or what is the threat in here? 

    If I would buy such property (but at a price insufficient for current owner to pay back the loan), will the charge still be there and lender can sell this property in order to get its money back (despite me being a new owner)? 

    Another document from legal pack - TR1 (transfer of whole of registered title) says that 'Transferor (Current owner) transfers with full title guarantee' - does it change situation for better ie. its safe to buy because loans from previous owner don't apply to new owner? 

     

    In general, how to check if the loan has been paid buy current owner? Will there be no entry in Charges Register or will it be mentioned that loan has been paid?

    Thank you to all smart tribesmen for enlightenment J

    Joanna

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    Hi Joanna,

    I would run this by a solicitor if I was you. I wonder if it is like a car loan (against the car as a secured loan)

    Please let us know the outcome.


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    Hi, I talked to solicitor and she advised that the charges are binding only to current owner/borrower. It must be true because they've sold during auction like hot buns Smile


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