Every purchaser should ask questions about their purchase and be satisfied that they are making the right decision for them at the right price. Part of instructing a legal adviser is the need to ensure that they are fully informed and have been independently advised prior to making a very substantial purchase – perhaps the most substantial purchase of their lives.
This course looks at some of the difficulties involved in dealing with negotiations on price prior to exchange of contracts, which can include disclosures to mortgage companies (and a resultant reconsideration of mortgage terms); genuine problems with the property that could impact purchasers for many years to come; and unforeseen costs that could make the property an unaffordable purchase or bad investment decision.
All of these must of course be taken into consideration when advising purchasers (and indeed sellers), and the rights and positions of both parties should be carefully thought about and put first in accordance with the professional adviser’s relevant code of conduct.
With all of those genuine concerns in mind, we also have to note that changes in purchase price or negotiations are unfortunately a problem area for property fraud and mortgage fraud. Within genuine transactions, we can sometimes find the odd file or instruction that is intended to misstate a purchase price to:
• gain additional mortgage funding (a form of mortgage fraud);
• save on SDLT inappropriately (tax evasion); or
• facilitate the large movement of monies between two connected parties in circumstances indicative of money laundering.
Sometimes these transactions are intentionally opaque and confusing, so the legal adviser will have difficulty keeping up with what happens, or when the conveyance moves on to the next stage in a conveyancing team process, the new advisers will be caught out by all the changes. Confusion and a changing picture allows those intending to commit a crime to make it more difficult to catch them or prove they were doing something wrong.
This webinar and the accompanying notes cover this aspect of negotiations on price; that being the consideration of possible frauds and other suspicious circumstances. We do however recognise that negotiation and genuine concern can arise in a transaction and this webinar is not intended to disrupt that process; rather to ensure the legal adviser takes a moment to ensure the bona fides of his or her client and their transaction.