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Scottish Trust Deed Forum
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Topic starter
26/02/2013 4:31 pm
Hoping for some opinion or thoughts from the experts. (whenever the desk is cleared and no-one's on the phone ans self-torture appeals)
People may have been offered or be offered alternatives to selling or being repossessed. Apart from SARB, what are the likely impacts on a trust deed/sequestration in terms of equity deemed present at the start, relinquished interest of equity or incomce/expenditure figures.
For people in difficulty or anticipating difficulty in relation to property owned, there are several potential solutions not likely to be widely known but increasingly offered.
Sale And Rent Back,(SARB) discussed on another thread, is not now legally offered by anyone, whether a company or an individual. This is despite the fact that it was a very attractive option for many but abused by too many and FSA stopped it.
Guaranteed Rent Would involve a signed agreement for a person or company to take over the management and letting of the property whilst passing a guranteed rent to the owner, regardless of the occupancy.
Sale on an option Would involve an agreement to sell at a stated price within a stated timescale, usually with a separate tenancy agreement running alongside. The tenancy would be renewable like any other and the sale would complete at the price agreed if the tenant /buyer chose to use the option within that time.
Delayed Completion Would involve an agreed definite sale at a price stated but date of entry some months or years away. May or may not involve the buyer renting or managing rental of the property.
Where equity exists for example, does the trustee have the obligation to sell if the agreed sale will complete within the duration of the seller's trust deed or sequestration?
Where arrears are stopped as a result of guaranteed rent or lump sum paid to clear arrears, can the property still be sold by the trustee / lender.?
26/02/2013 11:00 pm
Generally speaking, a trustee could allow any of these options to take place, but they would need to be a good reason why.
Sooner or later, if there is equity in a property then it will have to be gathered in - so I'm not sure how that would be achieved under a Guaranteed Rent arrangement. A trustee could certainly still look to sell despite an agreement like this being in place - there doesn't have to be mortgage arrears.
Scottish Debt Solutions Expert - Ask me for help setting up a Scottish Trust Deed or Debt Arrangement Scheme plan.
Topic starter
26/02/2013 11:26 pm
Thanks Kevin, I assumed equity would still need to be realised where it existed. Where it does and the sale is scheduled within the necessary timescale , that would be ok though?
Topic starter
26/02/2013 11:31 pm
Guaranteed rent would most likely be attractive to an owner of a negative equity property who thinks they would like to stay on the property ladder versus trying to get back on it with fatally damaged credit, no deposit etc and wait however long it takes for property values to rise.
27/02/2013 10:09 am
If there is equity then I guess a trustee would weigh up the circumstances and make a decision based upon that. It may depend upon factors like how they see the housing market going forward, how much rent is being gathered versus the mortgage payment etc. I think in general if a property is to be sold most trustees would prefer to do it sooner rather than later unless there is a good reason to delay.
Scottish Debt Solutions Expert - Ask me for help setting up a Scottish Trust Deed or Debt Arrangement Scheme plan.
Topic starter
27/02/2013 11:53 am
Got it, where equity is a small amount, perhaps 3rd party paying it over early would end a trustee's interest other than the income from rent?
Large amount of equity likely to require a sale sooner?
