• Thursday, June 20, 2024
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How to resolve problems involved in sale of real estate property FIDEL EHIZIBUE IGENEGBALE

real estate property

Amongst services provided by a registered firm of Estate Surveyors and Valuers, is the sale of property.

When an estate firm is commissioned to perform this function, some problems, legal and man-made, are usually encountered by the firm in the course of carrying out the brief. These problems are so critical that if not carefully handled will involve the firm in litigation.

This write-up will examine the procedure involved in real property sale, problems usually encountered and proffer solutions to them.

When an instruction to sell a property is received by an estate agent, same is acknowledged and request made for photocopies of title documents to the property. In acknowledging the letter, conditions of service, for example professional fees, are clearly stated.

Arrangement is made for inspection of the property in the company of the client as the case may be. During Inspection, all the relevant data which include location, description, accommodation, services provided, condition of the property are collated in the field and any other relevant information.

Probable sale value is assessed and agreement reached with the principal on the reserved price.

The duty of making searches at the appropriate Land Registries to ascertain whether or not there are encumbrances on a property lies on the purchaser or his Agent

Furthermore, searches are made at the Lands Registry to ascertain status of the property, regarding encumbrances or other charges.

The mode of finding prospective purchasers, which include, Advertisement in Print, Electronic/Social media and display of the firm’s sign/bill boards on the property, will be discussed and agreed with the Principal.

Also the method of sale (i.e. Private treaty, tender or auction) will be agreed with the seller.

On securing interested buyer/purchaser, letter of offer is given to the prospective purchaser. Such letter usually state sale conditions, which include selling price, deposit payable; completion date; legal, statutory and other fees; whether or not the sale is subject to existing tenancy etc. Copies of the letter of offer are signed, dated and returned by the prospective purchaser to the Agent thereby signifying acceptance of sale conditions.

If there is a counter-offer, which is acceptable, a letter of acceptance containing the same conditions are given to the prospective purchaser(s).

When deposit is received, contract is entered into including the date of final payment. This is usually within a specified period of the deposit or at the execution of the Deed of Assignment, whichever is earlier.

Transfer documents such as Deed of Assignment, Indemnity and/or Irrevocable Power of Attorney are prepared and executed.

In the circumstances where the property for sale is mortgaged, a letter of undertaking is obtained from the mortgagee that if payment is made, the title documents covering the property will be forwarded directly to the Agent. This is imperative especially if the loan is to be settled from the proceeds of sale. The agent ensures that proceeds of Sale is more than needed to liquidate the loan. He also ensures that he pays directly to the mortgagee.

After the payment is made, Deed of release is obtained from the mortgagee and passed over to the purchaser.

Prominent problems encountered when given the instruction to sell a property include,

– Non-availability of transfer documents

– Lack of written instruction to sell the property

Related News

– Mortgage

– Multiple agents with different sale conditions on the same property

– Absence of written agreement between the parties on the completion date

– Gazumping

In order to alleviate the problems associated with the sale of real property. I hereby proffer the following recommendations;-

Date of final payment of the purchase price should be agreed in writing, duly signed and witnessed by the parties concerned.

The Estate Agent should always ensure that he is fully involved in collecting the title document of a mortgaged property sold. When left with the Vendor/Mortgagor alone he may refuse to transfer title or he may collect the sale proceeds without settling the mortgage debt. As a property under legal mortgage cannot be properly and legally transferred to another party without first paying the debt, since the mortgagee has the original title document.

The inability to legally pass title over to the purchaser could lead to litigation involving the Agent, the Vendor etc.

Where there is no charge on the property, the Agent should insist on collecting the original title document before remitting the purchase price to the Vendor.

The Agent should ensure that more than one Agent is not briefed to handle the sale of the same property to avoid crisis.

Multiple listing of property for sale by agents within the same locality should be adopted. The list which should be in form of sales particulars with the location of property, conditions of sale and agent to contact clearly stated this should be distributed among Agents, to save the prospective purchasers the inconveniences of having to go round all the agents. It will also save the agents embarrassments imminent in marketing the same property with different sale conditions.

The duty of making searches at the appropriate Land Registries to ascertain whether or not there are encumbrances on a property lies on the purchaser or his Agent. That is, caveat emptor. His Agent must ensure that he (the Agent) carries out necessary searches and advise his Client accordingly because his Principal may sue him for negligence.

The Estate Agent should ensure he agrees on the purchase price of the property with his principal in writing before any commitment. Otherwise he may accept a price which his principal will subsequently reject and may consequently subject himself to ridicule.

The Estate Agent should ascertain the true owner of a property before selling because it is actionable for someone to attempt to sell another person’s property without the owner’s consent. If the person who gave the instructions to sell is an Agent or representative, the Agent should ensure that he collects a copy of the Power of Attorney empowering the Agent to so act. If the instructor is a beneficiary, there must be a probate or letter of administration to that effect. If he is not the sole beneficiary/executor/executive, it is imperative to obtain a written consent of the beneficiaries/executors/executives, otherwise the other parties may vitiate the Sale contract.

All registered Estate Surveyors and Valuers should ensure better professional services at the approved scale of fee provided and in addition display a high level of integrity.

Transfer documents should be prepared and executed at the appropriate time. Delay may be dangerous. In particular, the Agent must ensure that the Deed of Assignment is executed before proceeds of sale is remitted to the Vendor or Mortgagee whatever the pressure under which the property is being sold.

It is my candid view that a lot of battle necks will be avoided if we give consideration to the above recommendations.

Igenegbale, an estate surveyor and valuer, is a property market analyst