I am currently experiencing serious financial problems. My son has lived with me for the last 22 years. Could I sell the property to him to prevent the property being repossessed? If so does it have to be for the full market value?
Any transfer to your son either for no consideration (a gift) or at an undervalue (less than market value) could be deemed to be a deliberate attempt on your part to defraud your creditors under the provisions of the Insolvency Acts, and could be subsequently overturned by your Trustee in Bankruptcy should you be declared bankrupt within a period of five years from the date of the gift.
Provided there is sufficient equity in your property then you can of course sell to anyone you wish (including your son) for the full market value provided of course there is sufficient to repay the amount owing on the mortgage, inclusive of all arrears and costs. If the sale value is less than the amount owing on the mortgage (negative equity) you can only proceed with any such sale with the express consent of the Lender.
You would not be able to transfer the property to your son, or anyone else, without first repaying the mortgage as the Lender has a Restriction registered against your property title preventing any such dealings without them first being repaid their loan. In the event of a negative equity situation you would need to negotiate a settlement or they will repossess and sell at auction. It may of course be in the Lender’s interest to agree to a sale even though they will not receive the full repayment as they will save the costs of repossession and subsequent remarketing and will receive a larger sum from the net proceeds.
* Emyr Pierce is Managing Partner of Emyr Pierce Solicitors in Rhiwbina, Cardiff, Western Mail Conveyancer of the Year, specialising in Domestic and Commercial Property. Contact www.emyrpierce.co.uk or email firstname.lastname@example.org