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#Post#: 64479--------------------------------------------------
Re: Legal Charge on a Property
By: andy_foster Date: March 27, 2025, 11:26 am
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The OP has said that without the cost of legal advice, he would
be earning more interest from his friend than he is currently,
but that if he paid for legal advice, it would cost him more
than the extra his friend would be paying him.
There is a saying about only lending money to friends if you are
happy to lose both...
Not entirely sure what advice the OP is looking for, other than
"free".
#Post#: 64586--------------------------------------------------
Re: Legal Charge on a Property
By: coffee pot Date: March 28, 2025, 5:24 am
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I think, mome rath, you have everything back to front. Add the
costs associated with the CH1 including getting your own review
to the principal, the amount you are charging your friend. That
way you get protected and the deal goes through. They get to pay
a bit more each month.
If they can't afford that I think mome rath probably needs to
take a long hard look at whether they should get involved at
all.
#Post#: 64615--------------------------------------------------
Re: Legal Charge on a Property
By: Mome Rath Date: March 28, 2025, 7:36 am
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Thanks guys, this is all most helpful. I can see now that both
myself and my friend have approached this the wrong way. In
particular, failure to consider the cost of setting up an
apparently simple loan. My friend first asked the conveyancing
solicitor, who said they couldn't act due to conflict of
interest. So he got another solicitor to prepare the CH1. It
now transpires that I should have instructed the other
solicitor.
I was hoping for some information about what I should expect to
see on a CH1. and what to look out for that could make it not
valid. To my non-legal eye the form looks straight forward and
all the names, addresses, full title guarantee, amount loaned,
interest etc. all seem to be correct. I am lending to a trusted
friend I have known for approx. 40 years. I consider the risk
of him deliberately defaulting is very low. He is purchasing a
residential property in his own name and will be living there.
He is not a business or company. There is one other loan from
another mutual friend. There is no other mortgage.
I am wondering now if having a 'charge on the property' gives me
any useful legal rights in the real world if I have to guess
whether a court would grant a possession order. My loan is
approx. 10% of the current property value.
#Post#: 64646--------------------------------------------------
Re: Legal Charge on a Property
By: Southpaw82 Date: March 28, 2025, 10:33 am
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A proper charge absolutely gives you protection - but with a
lack of relevant details it’s impossible to say how much.
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