I am in the process of buying a house from a person who has IVA

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alex121
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by alex121 » Wed Feb 14, 2018 4:46 am
Hi, I am in the process of buying a house and the people we are buying from have an IVA that apparently came to an end last April, but never got finalised.
They started the process of closing this out in November, after they had accepted our offer. They have since been through 2 28 day notice periods to advise their creditors that they are ending their IVA and in the last few days of the 2nd period of the creditors has come back to say they don’t agree. They are now entering a 21 day period where all the creditors can vote to agree or disagree with ‘something’ (closing out the IVA - not sure of the terms or how this is being structured). Can someone advise if this sounds normal? From all the reading I have done, it sounds a lot more staightforwaed to close out the final stages and I am concerned the sellers aren’t being 100% transparent about the situation.
Can anyone advise what the next steps would be should there be agreement in the next 21 days? And whether they should be in a position to then sell their house to us.
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kallis3
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by kallis3 » Wed Feb 14, 2018 8:44 am
Hi,

If no completion letter has been received, there will be a restriction at Land Registry which your solicitor will have picked up on.

Check the sellers name on the Insolvency Register to see if they are still on there.
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Foggy
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by Foggy » Wed Feb 14, 2018 9:09 am
This doesn't sound quite straightforward and it could be that the sellers are being as open as they can be, but are being bamboozled by their IP. In reality the situation can be solved by you, as regards to the purchase. The resstriction is there to protect the creditors if the house is being sold, NOT to frustrate a sale ---- your conveyancer needs to contact the IP directly and get him to remove the restriction. The conveyancer will have to undertake to send the sale proceeds direct to the IP and then the IP will sort out whatever needs to be sorted out with his clients and their creditors --- the house will pass to you without any restriction.
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Lisa Thomas
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by Lisa Thomas » Wed Feb 14, 2018 9:24 am
If they are simply closing the IVA in the normal way because it has completed successfully then their IP simply needs to send a CC to creditors with a final report, creditors would not vote on this.

It sounds to me as if they might have put forward a variation to creditors, perhaps to sell the house, and creditors might have rejected it.

If the variation is on the basis of injecting some proceeds from the sale and it has been rejected there is a risk they may not sell the property as they would lose all of their equity into the IVA (unless and until their total debts, interest and costs have been paid in full).

I would think a summary explanation from the Supervisor to the solicitors would be useful so you know what is actually happening before you lose any funds on surveys etc.
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Shaun Vickery
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by Shaun Vickery » Wed Feb 14, 2018 10:28 am
It appears to depend on whether their IVA was completed and it's just a matter of removing the restriction on the property, or whether there is some question regarding whether the IVA is finished at all. I doubt the former on the basis that creditors are still having to vote. Therefore it would really depend on what stage the customers are at, something I suspect you need to clarify.
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