Chapter 9 Problem questions and answer guidance

Mortgages

ABBEY & RICHARDS SOLICITORS

OFFICE MEMORANDUM

To:      Trainee Solicitor

From: Senior Partner

Re our clients Sam and Jane Cluanie: Purchase of Flat 3, 125 Clothier Street, Kemptville, Cornshire

Sam and Jane are old friends and clients who have put in an offer to buy the above leasehold property from Provincial Finance Ltd, a mortgagee in possession. Our clients are buying with the aid of a mortgage. We are also instructed by their mortgagee and the UK Finance Mortgage Lenders’ Handbook is being used. Apparently the owner of the flat was mortgaged up to the hilt. The seller is second in a line of three mortgagees and we shall obviously have to make sure that Sam and Jane get good title. It is some time since I acted on a purchase from a mortgagee. Please would you research the following points and let me have your brief report by this evening. In particular:

  1. Do we have to investigate the seller's entitlement to sell?
  2. As matters stand, how do we ensure that Sam will buy the property free from any of the mortgages?

We shall be using the Law Society contract incorporating the Standard Conditions of Sale. The seller's solicitors have deduced title by sending me a copy of the entries inside their client's old Charge Certificate, which I attach. In your report, please mention any problem regarding the title and the deduction of it. I have to say I am a little concerned about the presence of the restriction and caution - can you reassure me?

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