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Legal problems with a house, flat or other type of property can include structural defects, ongoing litigation, disputed bills and more. If you’re experiencing any of these problems then you could find it more challenging to sell your home. This guide explains why and also provides advice on how it may still be possible to get a fair and fast offer for the property.
- What are some legal problems you might have with your property?
- Your duty to tell potential buyers about legal issues at your home
- Consequences of withholding legal problems when selling a property
- Should you resolve legal problems at your home before trying to sell it?
- Choosing the best method for selling your home with legal issues
- Frequently asked questions about selling a house with legal problems
What are some legal problems you might have with your property?
When you’re the owner of a freehold or leasehold flat, house or other type of property, there are a number of issues that might arise that can create hurdles for the selling process.
Some of these complications could be tied to the age, condition, location, shape, size or type of your property, and they can vary from relatively easy to resolve through to issues that might require a lot of time and money to fix. Another category of issues that may present additional barriers for selling your property including current and past legal problems with the home.
There are a few different varieties of legal problems that you might be experiencing with your property, or that have occurred in the past but are still relevant to the sale of your home:
Title issues: There are a number of legal problems that homeowners might encounter related to the title of their house or flat, which is a document that refers to who is the owner of a property, but it also addresses other issues. Problems at a home that could be linked to the title and which might complicate the sale of the property include missing title deeds, having an unregistered title for the home, restrictive covenants included in the title, and more.
Structural defects: Flaws with a home’s structure can range from minimal and barely visible to widespread and serious, such as subsidence or extensive dry rot. Depending on the scale of the structural defect and the type of property you’re trying to sell there could be a number of associated legal problems, including potentially litigation over liability for any damage to neighbouring properties caused by the flaw and various other possible complications.
Ongoing litigation: Another type of legal problem that you could be experiencing at your property is a pending lawsuit, such as court disputes with people living next door to you, as the website Nuisance Neighbours notes. Such litigation can cover many topics and range from minor to major in scope, and they can be a dealbreaker for some buyers.
Disputed bills: It’s possible that you are currently fighting with a utility company, credit card lender or another entity over bills at your property, perhaps an electricity bill for several thousands of pounds that the previous owner of your home did not pay or that you believe is overcharged. These disputes can sometimes lead to businesses seeking court orders to force repayments from you, and you may have to tell prospective buyers about them.
Financial arrears: Separately from disputed bills like fights over utility fees, there are a number of other financial arrears you could experience as a homeowner that could lead to legal problems, whether that’s litigation or something else, including service charge arrears if you’re living in a leasehold flat, falling behind on your mortgage payments, council tax arrears and more.
If your home currently is subject to any of the above legal problems or other issues, you do not need to fear that you will never be able to find a buyer for your leasehold or freehold property.
You’ll be selling a freehold home if you are the outright owner of the building and then land on which it was constructed. But you’ll be selling a leasehold home if you pay an annual ground rent to a freeholder and in exchange you own the property for a specific number of years. Either way, you could find some additional barriers to selling if the house or flat has legal problems.
This guide walks you through your options with selling, and show how it can still be possible to secure a competitive and speedy offer from your house or flat by following a few simple steps.
Your duty to tell potential buyers about legal issues at your home
It’s crucial to note that there are many legal problems which could affect your freehold or leasehold house, flat or other property that you are required to tell potential buyers.
That’s because a key stage of the selling process is for the homeowner selling to fill out what’s known as a Property Information Form, also known simply as a TA6 form as discussed by Homeowners Alliance. This is a document where you’ll have to comprehensively detail answers about many aspects of your property, including past and present legal problems, planning permission issues and much more.
The form is a mandatory part of the selling process and it’s not possible to avoid filling one out. And this is one step where serious buyers will be given a full explanation of any legal problems with a property – and sellers must be honest when filling out their TA6 form.
If you are not as upfront and detailed as possible when filling out your property information forms, you could face serious legal consequences from whoever buys your property once they discover the issues as the new owner, and the next section of this guide elaborates on the negative outcomes that can occur.
Consequences of withholding legal problems when selling a property
In addition to having to report many legal issues on your TA6 form when selling a freehold or leasehold property, you have other statutory duties to report such information to buyers.
A law from the UK Government known as The Consumer Protection from Unfair Trading Regulations 2008 established a general duty for homeowners to reveal to prospective buyers any legal problems with a house or flat that could affect someone’s decision on whether to purchase the property or lose interest in it.
You should consult with your solicitor or other legal representative to discuss any potential legal issues with your property that you need to disclose in order to comply with this law.
But some of the most common examples of disclosures that are required under the 2008 statute include boundary fights and disputes over rights of way through a property, significant problems that have been identified with the home in prior surveys, ongoing and unpaid debts that are linked to the flat or house, any defects or other problems associated with the property’s title, issues with planning permission at the home, violations of any building standards, and more.
Knowing about a legal problem with your property but withholding it from a buyer is a very unwise decision to make, because if someone purchases your home without being told of the problem, and then they discover it as the next owner, they could sue you for penalties.
Such a legal fight could be incredibly time-consuming and expensive, and it’s not worth the risk involved. Instead, ensure that you comply with all applicable laws and regulations when selling your home and do not withhold any legal problems that may exist with your property.
Should you resolve legal problems at your home before trying to sell it?
One issue you will need to consider as part of the process of selling your leasehold or freehold house, flat or other type of property is whether you want to spend time, effort and money on resolving whatever legal problems you are currently experiencing with the property.
This potential solution will be case-specific to whatever issues you’re facing, whether that’s service charge arrears, disputed utility bills, boundary disputes and more. For example, the fix for your home could be waiting until ongoing litigation with your neighbours resolves, either through settling the legal fight with them or hoping for a ruling in your favour.
But taking care of a current legal problem with your property could take many months, and possibly require a large amount of money. If you’re looking to sell your home as quickly as feasible and to keep your selling costs low then trying to fix the legal problem may not be viable.
Don’t be concerned that you will never be able to sell your property if you’re not able to first resolve an existing legal problem with it. There are still options available for selling, such as getting in touch with a quick home buying company like LDN Properties. These businesses have plenty of experience with purchasing homes with legal problems, with benefits including not charging you any fees any being able to finalise the purchase within a few short weeks.
Choosing the best method for selling your home with legal issues
A vital decision that you’ll need to make when selling your leasehold or freehold property with legal problems is selecting how to find a buyer, whether that’s selling to a quick home buyer, selling without any help, selling with an auctioneer or selling with an estate agent.
There are pros and cons associated with the four methods, such as it possibly taking more than a full year to sell your home via an estate agent or on your own. Whereas with a quick buyer you could not only experience a selling timeline of just a few weeks but you will also be able to avoid having to pay any commission if you sell to a true no-fee company like LDN Properties.
To help you with making the decision, start by noting down your top goals with selling, including how long you are willing to wait to find a buyer, your ideal property sale price and whether you can accept having to pay any fees with selling. Then compare these factors against the specifics of the four options below to find the one that most closely pairs with your needs.
Selling to a quick home buyer
LDN Properties and other quick home buyers are companies that have the funds available to purchase homes right away, meaning they do not have to wait for many weeks or even months to initially get approved for a mortgage that would pay for the purchase of your flat or house.
This cuts the typical timeline for selling to a quick buyer down to just a handful of weeks, and that includes the time needed for important final steps such as exchanging contracts and paying the seller the full proceeds, making it often by far the quickest approach to sell a property.
Another advantage of selling to a quick buyer is that the legitimate companies will never make homeowners pay any commission, which assists in reducing your selling expenses. That compares well to using an estate agent or an auctioneer, where you would need to pay fees that would be deducted immediately from the proceeds if they’re able to sell your home.
And quick buyers are also renowned for making competitive and fast offers for properties even if they have potential flaws or issues with their type, size, shape, location, condition or age.
In addition to purchasing houses with legal problems, LDN Properties for example has bought and made offers for many other leasehold and freehold properties throughout the UK, including, but not limited to, Woolaway homes, timber frame properties, houses with a loft conversion, penthouse flats, self-build houses, eco properties, flats located close to a traffic junction, mixed-use properties, flats with asbestos and more.
Selling without any help
The second option for selling your house with legal problems is doing so on your own, which puts the responsibility on you for completing every step needed to find a buyer.
This starts with producing a listing that features photographs of the interior and exterior of your home, advertising this listing online and in local newspapers, organising viewings where you’ll give prospective buyers a tour of the property, and hearing offers from serious buyers. It’s a major undertaking that will require a lot of effort on your part and take up much of your time.
That’s why this method is only really suggested as viable for those people with friends or family members that have experience with selling properties that have legal problems, and that are willing to help you out for free with trying to find a buyer for your home, or if you have that kind of experience. Otherwise it can rapidly become a very slow and stressful process.
One of the clear benefits of selling this way is that you will not have to pay an estate agent or auctioneer any commission for finding a buyer for the property. But this cost saving could be eliminated by the funds that you have to spend on advertising your home and more.
As an alternative, consider selling your home to a zero-commission quick buyer like LDN Properties, because you will also avoid having to pay any fees but you will secure a much speedier sale, with a timeline that only takes a few weeks from the start through to the end.
Selling with an auctioneer
The third option for selling a property that has legal problems is doing so at an auction, where people will have the chance to place bids of ever-increasing price value on the home. If your house or flat does not receive any bids then it does not sell, and this will delay your selling timeline even further because you’ll have to start over with trying to find a buyer.
Remember that auctions are unpredictable so there’s no guarantee what the final price will be even if your home does sell. That’s why you need to choose a reserve price, which is the cheapest price at which you are comfortable selling your home, that should produce a profit from the sale even after the auctioneer has deducted the fees that they will charge.
Auctioneers charge costs for the work that they’ll do in crafting and marketing a listing for your home, hosting the auction itself and then overseeing the completion of a successful sale.
Usually, an auctioneer will impose commission at about 2.5 percent of your property’s final sale price, and this will be taken out of the eventual sale proceeds straight away. If you are looking to lower your costs when selling your home, you may want to review some no-fee options.
It’s possible that some auctioneers could be open to setting a lower rate of commission for the sale of your home, or having the winning high bidder pay some of your fees, so it’s always worth asking individual auctioneers about this, because it can help to reduce your expenses.
Selling this is way is also far from the quickest option, because it will take many months to complete the various steps involved. There’s a wait of several weeks or even months between the day on which you decide to sell your home this way and the day on which the auction is held. And then if your property does manage to sell at the auction, the buyer will typically have about 28 days to finalise the purchase, for example by signing the required legal documents.
Selling with an estate agent
The fourth option for selling a leasehold or freehold house, flat or other property that has legal problems is doing so with an estate agent. Your workload should be minimal when selling this way, because it will be their duty to find buyers for your property, as The Law Society explains.
Their work includes putting together a listing for your home and advertising this in their office, in local newspapers and online, scheduling viewings to take people around the interior and exterior of the property, and fielding offers from buyers, ideally taking one to completion. It’s a lengthy process and you could be waiting more than a year before you sell your house or flat.
Note also that a buyer could make an offer to purchase your property but then change their mind and rescind the offer and walk away from the sale, and they won’t face any penalties so long as the contracts have not yet been exchanged. This will inevitably delay the sale of your home by a lot of time because you’ll need to restart the process of trying to find a buyer.
Another disadvantage of selling a house or flat through an estate agent is that they will charge you commission if they are able to successful sell your property. The average range of commission that estate agents charge is between 1.15 percent and 1.40 percent of a property’s eventual sale price, and the fee is immediately taken out of the final proceeds. This will add to your costs, especially compared to other selling methods like using a no-fee quick buyer.
Top queries and answers about selling a house with legal problems
If you are thinking of selling your home quickly, you may have some questions for us, ranging from the amount of repair work needed before selling through to selling a house without certain documents. Here are some of the questions we’re asked about selling a house with legal problems:
Your top questions when selling a property with legal problems
There are a number of different legal problems that you might have experienced either currently or in the past at your leasehold or freehold property, including issues with the title deeds such as unregistered land, litigation ongoing with neighbours over factors such as boundary disputes, unpaid utility bills or other arrears such as missed mortgage payments, and more.
If there are legal problems at your property, then you will likely have to inform prospective buyers about these issues and, depending on the seriousness of the issue, then you might find that it’s enough to make some buyers lose interest in purchasing your house or flat. Other legal problems could lead buyers to significantly reduce the offer they make for the property.
As part of the process of selling your leasehold or freehold house, flat or other type of property, you will be required to fully and honestly complete what’s called a TA6 form, also known as a Property Information Form. You’re required by law to answer this form fully, where you’ll be asked to explain in detail any legal problems and other issues affecting your home.
Yes, it’s a statutory requirement under a law known as The Consumer Protection from Unfair Trading Regulations 2008 to provide prospective buyers with information about a broad number of possible legal problems that might exist at your home. You could face litigation and major penalties if someone buys your property and then discovers you concealed a legal problem.
You can assess whether it’s feasible to spend money, time and effort on resolving an outstanding legal problem at your freehold or leasehold property before trying to sell it, but this might not be something you can do based on the cost or schedule involved. You still have options to sell a home with legal problems, for example by selling to a quick property buyer.
If you decide to sell your property through an estate agent then they will often charge you commission within a range of 1.15 percent to 1.40 percent of the home’s sale price, and this will be subtracted right away from the final sale proceeds. However, if you opt for selling your home to a zero-fee quick buyer like LDN Properties or without any help then you’ll pay no fees.
You’ll find that the swiftest way to sell almost any category of property, including a house or flat with legal problems, is by contacting LDN Properties or other quick home buyer, because they can usually finalise the process of buying a home within a handful of weeks. The other typical methods of using an auctioneer, an estate agent or selling on your own can take many months.
