Apartment under offer

[Bennyboy]

Could you please enlighten us, we have accepted an offer on our apartment the buyer is part cash, part mortgage, our buyers bank is the same one that we are with and have our mortgage with, they have contacted the developer who has confirmed that the title deeds are due April/May ( he has a very good track record with title deeds) The bank needs the developer to guarantee the mortgage as he did when we purchased, he has said no and the bank says we have to wait for the deeds then our buyer can have the mortgage. Our buyer is very keen not to loose the apt and has suggested renting it until the deeds come and then will purchase, but it would be simplar if we could just complete the sale. We would rather not rent the apartment but really don't want to wait approx 4 months.

What can we do - thanks for any advice

[Nigel Howarth]

Hello Bennyboy and welcome to the forum,

Banks are extremely reluctant to grant mortgages on resale properties without Title Deeds. As its Title Deed does not exist, legally the property does not exist and therefore your buyers cannot use the property as collateral for the mortgage. So the only option left open to the bank is to get someone (i.e. your developer) to act as guarantor. (And for the bank to accept him as guarantor, they need first claim on the land on which he is building).

One possible way out of this situation is to draw up an agreement with your buyer to rent the property until such time as its Title Deed is available and then to buy it from you for an agreed amount less the amount they have paid in rent.

This way forward does carry some risks. Your developer says the Title Deeds are expected April/May - but he is not responsible for issuing them - that's up to the Land Registry. But what he should be able to tell you is the 'AX' number - this is the file reference allocated by the Land Registry when it has all the information necessary to proceed with issuing Title Deeds.

It would also be good to know when the Land Registry issued the 'AX' number as this will give you some indication as to how long they have been processing the case.

A second risk is that your buyers may renege on the agreement. If this happens it could prove expensive to get them out.

And there is a third risk that when they come to buy the property, the bank may refuse to grant them a mortgage.

(Of course, you may be able to cajole your developer into acting as guarantor for your buyers).

Regards,

[Bennyboy]

Thank you Nigel, that's really helpful, we are working on the developer and will try to find out the AX number as suggested, all of ther other developments that he has built has already had title deeds ours is the last one. Our buyer really wants the apartment and has offered to rent until the deeds come but we thought it might be better to ask for a deposit on the apt to hold it until the deeds come and she can have the mortgage rather than a try before you buy which we are worried about, is there some type of contract we could have to confirm the intended purchase possibly fromn the buyer and her bank.

Again thank you for your help

Bennyboy

[Nigel Howarth]

You're welcome Bennyboy,

I'm sure that any competent lawyer will be able to draw up a watertight agreement. You'll find a list of local lawyers at http://ukincyprus.fco.gov.uk/en/help-fo ... al-lawyers

Regards,

[Bennyboy]

Sorry Nigel, back again.

We have asked our solicitor to approach the developer to see if he would be guarantor for our buyer as you suggested, I don't hold out much hope but its worth a try.
We are considering handing the keys back to the bank, we are trying to do the honourable thing, against the odds in today's market we have found a buyer who is very keen, in full time employment and with the same bank as us, so is known to the bank, we have already lost money but don't want to be taken down.

What happens to the property if we do hand back the keys, is the debt handed to the developer or does the bank try to sell the property ? can they come after us in the UK , so sorry to keep asking all these questions, you do a great job by the way - thank you