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Buachaill, Barrister
Category: Property Law
Satisfied Customers: 10944
Experience:  Barrister 17 years experience
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Have just signed a option agreement on a property with a bankruptcy

Customer Question

have just signed a option agreement on a property with a bankruptcy charge on it but have been told this is illegal
Submitted: 2 years ago.
Category: Property Law
Expert:  Buachaill replied 2 years ago.
1. This is correct. Essentially, once a person is in bankruptcy, their assets vest in the trustee in bankruptcy and they can no longer be dealt with by the bankrupt. Accordingly, if you paid this bankrupt person a fee for the option entitlement, then you have been swindled by the bankrupt. Essentially, the bankrupt would have known he could not deal with his assets so s/he has perpetrated a fraud on you. You can speak with the trustee or assignee in bankruptcy, but they are unlikely to honour any option agreement entered into with the bankrupt. Ultimately, no court will enforce any option agreement where there is a bankruptcy charge on the property being dealt with, I regret to say.