Just curious.
2 brothers, A & B, inherit a small bungalow with a fairly large
garden.
They reduce the size of the garden, and register it as a separate
property, with the idea of getting planning to build a small
house.
A third party C, gets a mortgage and buys the bungalow.
Later, C buys the separated piece of land outright from A & B,
and with a second mortgage, builds a 2 floor extension to the
bungalow which takes up part of the land which he owns, and
changes a small 1 bedroom bungalow into a 3 bedroomed house.
I was wondering how this situation might be treated if C for some
reason, defaulted on the mortgage and lost the house, as part of
it is now on C's piece of land.
At present the property is worth considerably more than the
outstanding mortgage, but not without the extension.
It's unlikely to happen, but was just wondering about C's
position if it did.
Mike.

On 2 Aug, 16:05, "Mike G" wrote:
Just curious.
2 brothers, A & B, inherit a small bungalow with a fairly large
garden.
They reduce the size of the garden, and register it as a separate
property, with the idea of getting planning to build a small
house.
A third party C, gets a mortgage and buys the bungalow.
Later, C buys the separated piece of land outright from A & B,
and with a second mortgage, builds a 2 floor extension to the
bungalow which takes up part of the land which he owns, and
changes a small 1 bedroom bungalow into a 3 bedroomed house.
I was wondering how this situation might be treated if C for some
reason, defaulted on the mortgage and lost the house, as part of
it is now on C's piece of land.
At present the property is worth considerably more than the
outstanding mortgage, but not without the extension.
It's unlikely to happen, but was just wondering about C's
position if it did.
Mike.

You may have to explain more carefully. As I read your description,
A&B have sold everything (garden and bungalow) to C, so C owns
everything. Is that right? If C defaults the mortgagee could sell the
property C mortgaged and then C would be given any surplus from the
sale.

Francis

" wrote in message
...
On 2 Aug, 16:05, "Mike G" wrote:
Just curious.
2 brothers, A & B, inherit a small bungalow with a fairly large
garden.
They reduce the size of the garden, and register it as a separate
property, with the idea of getting planning to build a small
house.
A third party C, gets a mortgage and buys the bungalow.
Later, C buys the separated piece of land outright from A & B,
and with a second mortgage, builds a 2 floor extension to the
bungalow which takes up part of the land which he owns, and
changes a small 1 bedroom bungalow into a 3 bedroomed house.
I was wondering how this situation might be treated if C for some
reason, defaulted on the mortgage and lost the house, as part of
it is now on C's piece of land.
At present the property is worth considerably more than the
outstanding mortgage, but not without the extension.
It's unlikely to happen, but was just wondering about C's
position if it did.
Mike.

You may have to explain more carefully. As I read your description,
A&B have sold everything (garden and bungalow) to C, so C owns
everything. Is that right? If C defaults the mortgagee could sell the
property C mortgaged and then C would be given any surplus from the
sale.

Yes I had to read it three times to understand.

A&B and the inheritance are complete red herrings.

What he is saying is that person A buys a house on a mortgage, and then buys
a separately registered piece of land which he own outright and extends his
house onto that land.

So I think question (1) is, what will happen if the mortgage company have to
repossess the house given that some of it is built on a separately
registered piece of land. ISTM that this is almost the same question as
"How the hell can A ever sell the house given that some of it is built on
land not included in the sale.

and question (2) is, can the man have the land (or its value) taken away
from him to pay any shortfall from (1).

As to (1), I've no idea of the answer,

As to (2), the anser is: of course he can (subject to a court order)

HTH

tim

In message , at 18:45:17 on Sat, 2
Aug 2008, tim..... remarked:
What he is saying is that person A buys a house on a mortgage, and then buys
a separately registered piece of land which he own outright and extends his
house onto that land.

So I think question (1) is, what will happen if the mortgage company have to
repossess the house given that some of it is built on a separately
registered piece of land.

That assumes the mortgage company were happy to make the loan given the
circumstances of the separate bit of land (without including a charge on
that land as well).
--
Roland Perry

"tim....." wrote in message
...

" wrote in message
...
On 2 Aug, 16:05, "Mike G" wrote:
Just curious.
2 brothers, A & B, inherit a small bungalow with a fairly
large
garden.
They reduce the size of the garden, and register it as a
separate
property, with the idea of getting planning to build a small
house.
A third party C, gets a mortgage and buys the bungalow.
Later, C buys the separated piece of land outright from A &
B,
and with a second mortgage, builds a 2 floor extension to the
bungalow which takes up part of the land which he owns, and
changes a small 1 bedroom bungalow into a 3 bedroomed house.
I was wondering how this situation might be treated if C for
some
reason, defaulted on the mortgage and lost the house, as part
of
it is now on C's piece of land.
At present the property is worth considerably more than the
outstanding mortgage, but not without the extension.
It's unlikely to happen, but was just wondering about C's
position if it did.
Mike.

You may have to explain more carefully. As I read your
description,
A&B have sold everything (garden and bungalow) to C, so C owns
everything. Is that right? If C defaults the mortgagee could
sell the
property C mortgaged and then C would be given any surplus
from the
sale.

Yes I had to read it three times to understand.

A&B and the inheritance are complete red herrings.

Not so much red herrings as background to the situation.

What he is saying is that person A buys a house on a mortgage,
and then buys
a separately registered piece of land which he own outright and
extends his
house onto that land.

Yes. That's a much simpler way to put it.

So I think question (1) is, what will happen if the mortgage
company have to
repossess the house given that some of it is built on a
separately
registered piece of land. ISTM that this is almost the same
question as
"How the hell can A ever sell the house given that some of it
is built on
land not included in the sale.

An interesting point.
I suppose he'd have to sell the house and land as one package.

and question (2) is, can the man have the land (or its value)
taken away
from him to pay any shortfall from (1).

As to (1), I've no idea of the answer,

As to (2), the anser is: of course he can (subject to a court
order)

I can understand that, but with the extension, the house is
probably worth twice as much as the outstanding mortgage.
Mike.

"Roland Perry" wrote in message
...
In message , at 18:45:17 on
Sat, 2 Aug 2008, tim..... remarked:
What he is saying is that person A buys a house on a mortgage,
and then buys
a separately registered piece of land which he own outright and
extends his
house onto that land.

So I think question (1) is, what will happen if the mortgage
company have to
repossess the house given that some of it is built on a
separately
registered piece of land.

That assumes the mortgage company were happy to make the loan
given the circumstances of the separate bit of land (without
including a charge on that land as well).

Apparently they didn't check when he applied for the second
mortgage, and knowing there was nothing to stop him building on
the land, as he owned it, he just went ahead with building the
extension.
Mike.

On 2 Aug, 18:45, "tim....." wrote:


What he is saying is that person A buys a house on a mortgage, and then buys
a separately registered piece of land which he own outright and extends his
house onto that land.

Ah, yes, that was what confused me. C *owns* both plots of land
outright - there was some hint in the OP's post that he didn't, but
that's obviously just a confused reference to his having a mortgage as
I understand it. Even in the 21st century you still get people who
have the idea that the mortgage lender owns the property and it is
somehow being bought in instalments.

The answer is simple - subject to anything in the mortgage to the
contrary - the mortagee's charge will be over the originally mortgaged
plot. That is all they would be able to sell (or take possession of)
as of right, though that would cause immense difficulty to C and might
well make him come to some sort of arrangement. The only way to reach
the other bit of land would be to obtain judgment (for the debt) and a
charging order over it.

Francis

" wrote in message
...
On 2 Aug, 18:45, "tim....." wrote:


What he is saying is that person A buys a house on a mortgage,
and then buys
a separately registered piece of land which he own outright
and extends his
house onto that land.

Ah, yes, that was what confused me. C *owns* both plots of land
outright - there was some hint in the OP's post that he didn't,
but
that's obviously just a confused reference to his having a
mortgage as
I understand it. Even in the 21st century you still get people
who
have the idea that the mortgage lender owns the property and it
is
somehow being bought in instalments.

Maybe so, but I think few would believe they really own a
property until they have the title deeds in their possession.
Either from buying a property outright, or by paying off any
outstanding mortgage.

The answer is simple - subject to anything in the mortgage to
the
contrary - the mortagee's charge will be over the originally
mortgaged
plot. That is all they would be able to sell (or take
possession of)
as of right, though that would cause immense difficulty to C
and might
well make him come to some sort of arrangement. The only way to
reach
the other bit of land would be to obtain judgment (for the
debt) and a
charging order over it.

I'm only playing devils advocate, but as I understand it, a
defaulting house purchaser only incurs a debt if the sale of the
property realises less than the outstanding mortgage, which in
this case would be very unlikely.
Any sale would also be hampered by the fact that the property
extends beyond the boundaries defined in the title deeds and
mortgage.
I assume that that would have to be resolved before the property
could be sold.
Mike.

Mike G wrote:

" wrote in message
...
Even in the 21st century you still get people who
have the idea that the mortgage lender owns the property and it
is somehow being bought in instalments.

Maybe so, but I think few would believe they really own a
property until they have the title deeds in their possession.
Either from buying a property outright, or by paying off any
outstanding mortgage.

AIUI, you do have possession of the deeds, though there is little need
for them now if the land is registered with the Land Agency.
I'm too young to remember clearly, but afaik, the Building
Society/lender used to keep the Deeds in their safes as collateral, but
the need for that has changed over the years for the vast majority of
houses/land.

If you default, then a clause recorded, and agreed by the landowner when
arranging the loan, in the deeds, allows any proceeds of sale of the
land to go to the Lender to cover the outstanding debt.
Separate action is needed to force the sale of the land.
Alan.


--
To reply by e-mail, change the ' + ' to 'plus'.

" wrote in message
...

The answer is simple - subject to anything in the mortgage to the
contrary - the mortagee's charge will be over the originally mortgaged
plot. That is all they would be able to sell (or take possession of)
as of right, though that would cause immense difficulty to C and might
well make him come to some sort of arrangement. The only way to reach
the other bit of land would be to obtain judgment (for the debt) and a
charging order over it.

I haven't looked at a mortgage deed for, oh, such a long time. Does a
typical deed contain something that stops the borrower making alterations
that reduced the valued of the *mortgaged property* without permission of
the lender? Fairly clearly, major building works that join the mortgaged
property up with adjacent uncharged land could considerably reduce the value
of both parts, when separated. In order to realise its charge, and this is
surely the point of the OP's original query, the lender would have
physically to sever the extension from the main house. It might end up with
a room with no windows, etc etc etc.