Mortgagee Sale

[Trying2Learn]

Hi,

My friend and I were having a chat about my recent purchase ( finally exchanged ) which is a mortgagee sale.

I am sure when we saw the solicitor he asked whether there seemed like there was anything new in the house like a kitchen for example. He then went on to say that with a mortgagee sale we would be liable to pay for it if the original owners had not yet paid.

My friend said this was a load of rubbish and either I heard it wrong or the solicitors was wrong.

So is there anyone who can help me clarify who is right. By the way everything looked very 80's in the house nothing new I could see.

Thanks for your time and looking forward to reading your replies

 

[wally]

Thats cr@p, you pay the purchase price and thats it.

Being a mortgagee sale, the owners have defaulted on the mortgage, so there is probably heaps they haven't paid for!

 

[Peter 14.7]

Not so straightforward.

Many trades suppliers like kitchens put a caveat on the sale, in fine print writing, that says goods remain in thier possession until paid for in full. If the kitchen is fitted but only the deposit paid, suppliers could well have a legal case to come and take away. I have seen it happen in commercial sites often. Just like the Repo Man can take away a TV or sofa.

However the cost of removal of kitchen for the installer would exceeed the resale value ( who wants a second hand kitchen custom built?) so they are more likely to negotiate with you for a much reduced final payment or give it up.

However again, something like an Air Con unit is easily removed and resold. This is where I have seen it happen.

FYI Peter

 

[Collector]

I understand where the solicitor is coming from.

You see if your property had a new kitchen that because of the financial position of the owner (mortgage sale) had not yet been paid for the the contractor/supplier of the kitchen may have a right to remove the kitchen/service provided and not paid for.

Most contracts for work have clauses - 1 would be along the lines of " All materials belong to Abbys kitchens until they are paid for in full"


This does not mean that the kichen company is going to come in a rip the kichen out, and because you are a third party in that transaction they may not be intittled to anything from you, However they may be able to place a Cavet on the property - especially after they notice that the property has gone under contract.

A cavet will prevent the property from settling, it will delay your purchase and wont be removed until the contractor/supplier is paid.

It is my belief that is what your solicitor is concerned about - being a mortgage sale. - you have a good solicitor that is looking out for you!

 

[Collector]

Not so straightforward.

Many trades suppliers like kitchens put a caveat on the sale, in fine print writing, that says goods remain in thier possession until paid for in full. If the kitchen is fitted but only the deposit paid, suppliers could well have a legal case to come and take away. I have seen it happen in commercial sites often. Just like the Repo Man can take away a TV or sofa.

However the cost of removal of kitchen for the installer would exceeed the resale value ( who wants a second hand kitchen custom built?) so they are more likely to negotiate with you for a much reduced final payment or give it up.

However again, something like an Air Con unit is easily removed and resold. This is where I have seen it happen.

FYI Peter

LOL

You beat me to it!

 

[Peter 14.7]

LOL

You beat me to it!

All wisdom is worthwhile.

Peter

 

[wally]

There always more to it...

Is it true that the purchaser shouldn't be liable at all to pay any outstanding costs?

I can understand unpaid for items being removed by the installer, appliances, air conditioner etc, which you would want to know about before purchasing.

 

[Trying2Learn]

Thanks Peter and Collector,

I will print this off and show it to my friend.

 

[PrimeCommercial]

...The solicitor...said that with a mortgagee sale we would be liable to pay for it.

My friend said this was a load of rubbish

If you were paying for solicitors advice why were you listening to your friend?

I used to get this all the time and it drove me insane.. In my chose field after 15 years experience I'd have people come to me and say Doris down the road said you were wrong, the gardener said this, the mechanic said that....well why did you come to me then???

 

[Perp]

What Peter 14.7 and Collector said...

 

[Trying2Learn]

If you were paying for solicitors advice why were you listening to your friend?

I used to get this all the time and it drove me insane.. In my chose field after 15 years experience I'd have people come to me and say Doris down the road said you were wrong, the gardener said this, the mechanic said that....well why did you come to me then???

I can't help myself I listen to everyone you never know what you might learn! But I still ask questions to clarify then I can make what I feel to be an informed decision.

Just my way of trying to learn as much as I can.

 

[RGee]

I can't help myself I listen to everyone you never know what you might learn! But I still ask questions to clarify then I can make what I feel to be an informed decision.

Just my way of trying to learn as much as I can.

Good for you, and how right you are.

a) If the goods are fixtures - part of the property - then they are yours. Not the previous owner and not the tradie.

b) check if there are already any caveats placed on the property. If there are then you only purchase the property on the condition that caveats against the goods are discharged prior to settlement. If there are not then they have no action against you; therefore, they have no action against YOUR property.

c) buy the property and enjoy and always get decent legal advise. If it means paying $400+ per hour instead of anything less then pay.

PM me if you have any other questions.