Sale of repossessed properties

It has come to the attention of the Conveyancing Committee that many solicitors acting for vendors in the sale of repossessed properties are restricting the information that they furnish and are restricting the general conditions and warranties that apply under the standard contract.

Solicitors for a purchaser should advise their client of the implications of the restrictions.

In some cases, the client may be in a position to obtain the necessary information before contracts are signed (for example, by employing an engineer to prepare a certificate of compliance).

The solicitor will have to consider whether he or she is in a position to give an unqualified certificate of title (a) in light of any lack of information on the title itself, and/or (b) in light of any refusal on the part of the vendor to utilise the standard contract of sale without significant amendment or any refusal to reply to the standard requisitions on title (these are matters that are specified in the definition of ‘good marketable title’ in the standard undertaking for residential mortgage lending).

If the solicitor is not in a position to give an unqualified certificate of title, then the qualifications required should be agreed in writing with the lender before contracts are signed.

If the restrictions cannot be adequately explained or resolved, the dangers of proceeding should be explained to the client.

The solicitor will have to consider whether he/she is in a position to continue to act in the matter.

The issue of a lender having power of sale will remain under review by the committee. Solicitors acting for purchasers of repossessed properties should be careful to ensure that vendors have the necessary power to sell.