Hi mathlete

If the property had no equity at the start, then the house is safe. The Trustee would only have an interest if the property was sold within the period of the Trust Deed and there equity was released. He would be entitled to 50% of the net figure.

Both the mortgage and builders have a security over the property and the Trust Deed will not affect this.

Mark

Hi mathlete.

Is the suggestion that there is a clause in the agreement with the builders related to personal insolvency?

Have they raised any questions about this subject?

Thanks Mark, that's what I thought.

TDA - yes that's the suggestion, but the builders have not raised any questions. My ex's solicitor has suggested that we have defaulted on their second charge. I'm not sure how this is possible given that we have no payments to make, and that the security is still in the house. There is no danger to their share of the equity.

I have been on their web site and can't find anything in the terms and conditions of a shared equity purchase relating to a trust deed. In fact the only mention of any financial status is a sentence saying that they will be sympathetic to those in financial hardship.

I'm pretty sure it's just a solicitor making work for himself as apparently he'll 'sort this out' for her.

Hi mathlete.

Maybe ask for details of the "default" to be provided to you?

I suppose its not unusual for insolvency clauses to exist in contracts, but whether they'd in any way be enforced is another question altogether.

Hi mathlete,

Do you still have any paperwork in relation to the builders security over your property? This may or may not have details on "default" reasons. I see you have looked on their website but this may not contain specifics in terms of the secured loan.

Even if there was such a clause in the security, I would be surprised if the house builder took steps to enforce any such clause because you have entered into a Trust Deed.

A letter from your Trustee confirming that they do not have any interest in the property should be sufficient to stop them asking questions regarding your Trust Deed.

I dealt with a case like yours fairly recently and there was indeed a clause in the housebuilder's security documentation giving them the right to call up the debt if the person intered into an insolvency procedure. I think it is probably pretty standard.

Before the person signed the trust deed he spoke to the builder and got confirmation from them that they would not activate this clause. I aI would be very surprised if your housebuilder took a different view, mathlete. Like the other experts have said - technically your wife's solicitor may well be correct, but in reality there is unlikely to be a problem to solve

Hi Kevin,

Interesting point to note for future re the clause.

I'll filter this useful information down to our advisors.

Every day is a learning day as they say.