Developer with mortgages on apartments
If a developer has got a mortgage on a block of apartments, and they go bust: Anybody know what happens to owners of individual apartments?
Can the bank re-claim the apartment?
Thank you
"Mortgage" means "Dead Hand".
Any bank that has an unpaid mortgage will always claim ownership of the property it has lent the money against.
That is why it is a "Dead Hand", no-one else has any rights until the mortgage owner says so.
Sadly,
Your man on the grassy knoll.
Sadly ,
harrowell is right. Your solicitor should have told you about it.
Jack
Mortgages
Most developers have mortgages on apartments or at least the banks have registered an interest over the apartments. Developers borrow heavily from the banks to build the development in the first place.
BPAG
sunsnowski,
It would be good if you clarified your situation. Although you may be making stage payments you do not have ownership until title is passed to you. Until this time the developer has ownership, and may mortgage what has been built. If title is passed to you then the mortgage should have been cleared, and your legal representative should have checked this.
Pam,
you're completely messing things. No one's speaking of any individual mortgage before act 16. Please, read carefully what exactly sunsnowski is asking.
Best,
Jack
Thank you all for your comments.
Just to clarify, I was asking in the unlikely event should a developer go bust before you have the title deeds, and the developer has a mortgage on the block of apartments - would the developer's lender re-claim the apartment.
My queries have now been answered. Thanks again.
Thank you all for your comments.
Just to clarify, I was asking in the unlikely event should a developer go bust before you have the title deeds, and the developer has a mortgage on the block of apartments - would the developer's lender re-claim the apartment.
My queries have now been answered. Thanks again.
Hi All,
Unfortunatelly you are right. The bank will not be the owner, but the bank will resale the apartment to take back the credit loan which had been granted.
Hi BG_lawyer,
I think, the bank will become the rightful OWNER if they claim loan repayment as per their loan agreement with the developer . You can't sell something you don't own (unless you're an agent or acting legitimately on someone's behalf).
In the worst case scenario - if the bank declines to renegotiate with the developer new terms and decides for a write-off , they will become directly owners of any asset, used as security against the loan. In many cases in Bansko this was the land AND the building.
best,
Jack
Hi BG_lawyer,
I think, the bank will become the rightful OWNER if they claim loan repayment as per their loan agreement with the developer . You can't sell something you don't own (unless you're an agent or acting legitimately on someone's behalf).
In the worst case scenario - if the bank declines to renegotiate with the developer new terms and decides for a write-off , they will become directly owners of any asset, used as security against the loan. In many cases in Bansko this was the land AND the building.
best,
Jack
Hi Jack,
Yes, you are right - nobody could sell some others property is case as you say (unless you're an agent or acting legitimately on someone's behalf). But agree that you are an owner if you have a document which certifies that you are a owner. The bank has no such document. When the land, apartments are being mortgaged the owner is still the developer. And the bank is just the lender. There is a contract between the bank and the developer for the loan but the bank is not the owner. It is stipulated in that contract a special clause that if the debt provider stops to pay the month installments the bank could sell the property to cover the debt. Even, even the property is in a process of offering to other buyers, if the debt provider pay the outstanding fund of the loan, he remains the owner of the property. As you say right "acting legitimately on someone's behalf". The bank is acting on the debtor's behalf to sell the peroperty on ( we call it "public sell") public sell. There potencial buyers give different prices and that one who give the highest price wins.
I speak in general. Your case might be some other conditions.
Kind Regards