Buying a field, advance payment

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MarkT
Posts: 3
Joined: 21 Jun 2021 00:55

Buying a field, advance payment

Post by MarkT »

Hi,

I'm looking to buy a field to build a house. The plot is within residential zone, utilities are available across the road. We agreed on the price with the owner.

Our lawyer is waiting for some papers from the owner and Land registry, to confirm it's free form from any mortgages, obligations, restrictions, etc.
However he also told me that because the seller has financial issues and is unable to pay taxes and duties for the land transfer, he suggests that I will need to pay some 20-25% at the time we sign the agreement and its submission to the Land Registry.

Is it common approach here? Is it safe?

I feel a bit uncomfortable to give money ahead without being able to control that seller is really going to use them for paying taxes and fees required for Title transfer. I do understand, that if the seller at some later point will inform that he spent the amount for his urgent personal issues and is not able to perform his contract obligation, or even changed his mind and do not wish to sell at all, I may be in extremely good position to win the case in the court, but for the time being he already has my money and it becomes my problem to get them back or enforce land transfer, which requires a lot of time and efforts, which I would like to escape.

Are there any more hassle free alternatives available? Any suggestions are much appreciated.
Pantheman
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Re: Buying a field, advance payment

Post by Pantheman »

MarkT wrote: 22 Jun 2021 17:28 Hi,

I'm looking to buy a field to build a house. The plot is within residential zone, utilities are available across the road. We agreed on the price with the owner.

Our lawyer is waiting for some papers from the owner and Land registry, to confirm it's free form from any mortgages, obligations, restrictions, etc.
However he also told me that because the seller has financial issues and is unable to pay taxes and duties for the land transfer, he suggests that I will need to pay some 20-25% at the time we sign the agreement and its submission to the Land Registry.

Is it common approach here? Is it safe?

I feel a bit uncomfortable to give money ahead without being able to control that seller is really going to use them for paying taxes and fees required for Title transfer. I do understand, that if the seller at some later point will inform that he spent the amount for his urgent personal issues and is not able to perform his contract obligation, or even changed his mind and do not wish to sell at all, I may be in extremely good position to win the case in the court, but for the time being he already has my money and it becomes my problem to get them back or enforce land transfer, which requires a lot of time and efforts, which I would like to escape.

Are there any more hassle free alternatives available? Any suggestions are much appreciated.
You don't pay the seller any monies. The seller's lawyer will get the tax bill from the tax office and then you or your layer can pay this correct amount directly to the tax office to get the tax clearance certificate. This is all put down in the contract of sale.

Upon getting the certificate you can immediately go to the land registry to transfer paying the balance on the day by bankers draft.

DO NOT HAND OVER ANY MONEY TO THE SELLER DIRECTLY NOR HIS LAWYER, YOUR OWN LAWYER SHOULD BE ADVISING YOU ON THIS AND HANDLING IT.

If you are not using a lawyer in this matter, I am sorry to say that you have your own self to blame if things go wrong.

There are no duties for the seller at the land registry only any outstanding taxes and any CGT on the sale.
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MarkT
Posts: 3
Joined: 21 Jun 2021 00:55

Re: Buying a field, advance payment

Post by MarkT »

Thanks for the advise. The reason I asked it here is that advance payment was advised by my lawyer which makes me feel confused. The seller doesn't have any agent or lawyer.

I don't think there can be any deliberate con trick on the sellers part. But I definitely want to minimize chances to renegotiate the price increase if they for example get a higher then expected tax bill and with me being already on hook with this advance payment.

Do I understand right that to get the tax bill the seller has to present the signed contract? He can't request this bill just communicating the agreed sell price, can he?
Nigel Howarth
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Re: Buying a field, advance payment

Post by Nigel Howarth »

Hi MarkT

I go along with Pantheman's advice - UNDER NO CIRCUMSTANCES HAND OVER ANY MONEY TO THE VENDOR OR HIS LAWYER.

Give the money to your lawyer who will place it in a 'client account' . The money will be paid directly to the Tax Department once you and your lawyer are satisfied that everything is OK.

Regards,
Nigel Howarth
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MarkT
Posts: 3
Joined: 21 Jun 2021 00:55

Re: Buying a field, advance payment

Post by MarkT »

Ok, got it, thanks a lot.
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