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Aston Lawyer
Aston Lawyer, Solicitor
Category: Law
Satisfied Customers: 10458
Experience:  Solicitor LLB (Hons) 23 years of experience in Conveyancing and Property Law
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We sold some property at the time of completion they did not

Resolved Question:

we sold some property at the time of completion they did not have the funds to complete they were short of around £42,000 our solicitor suggested that we take a charge out against the property we were selling it was agreed that the buyer would pay the outstanding amount with in 12 months at a rate of 3,500 per month interest would not be charged providing the borrower did not default on any repayments in the event that they did default interest would kick in and be charged at the current bank rate + 4.00 % the borrower did default badly on the payment which coursed us some hardship and damages I under stand that as well as charging the normal amount of interest there is a further default interest that one can apply which is said to be between 1%-2% on top of the of the interest we are already charging at this time the loan was taken out in 208 and we are still owed over half the money now in 2016 some eight years later through out this time there was no equity left in the property due to the buyer taking out a first mortgage with levying us with a second mortgage how ever this has now changed and there is a lot of equity left in the property but the buyer is making us a low offer which is not acceptable.
Submitted: 1 year ago.
Category: Law
Expert:  Aston Lawyer replied 1 year ago.

Hi,

Thanks for your enquiry.

Firstly, you only have a right to charge the interest rate as detailed in the Charge document. So, you will need to check the wording to see if default interest is mentioned and if so, what percentage rate.

Looking ahead, I would take action to repossess the property. You do not have to get permission from the main Mortgage lender that gave your Buyer his main mortgage before taking steps to repossess the property.

The first mortgage lender takes priority if the property is repossessed, but if there is plenty of equity, any money left over after the first Mortgage has been paid off will be used to pay you off.

Initially, I would suggest that you get a Solicitor to write a letter stating that unless the full outstanding balance is not paid within 14 days, then you will have no alternative but to issue repossession proceedings.

I hope this assists you and sets out the legal position.

Kind Regards

Al

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