Are we there yet?

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Amazingly, yes, we nearly are!  Remember the lovely lady at the Crofting Commission who was going to give me a ‘wee bump’ through the system?  Well, she bumped extremely well and on Thursday night last week, when I was doing my every-few-days-just-in-case inspection of the Crofting Register (okay, and because I’m nosey and it’s interesting to see who owns what bits of land round here!) I discovered that not only were the crofts now on the register as of 29th February, but that I’m listed as the tenant!

I went screaming upstairs and shoved my laptop under the nose of my mostly-asleep husband and then tossed and turned half the night until my solicitor opened for business on Friday morning.  Would it be possible to get the money transferred and pick up the keys that afternoon?

Sadly not, as it turns out.  Firstly, she hadn’t been notified that the registration had gone through by the seller’s solicitors, secondly there’s a bit of paperwork for the seller’s solicitors to do involving transferring the payment that goes with the croft and she doesn’t want to release the funds until she’s checked that’s correct, which is fair enough and a good point.  So she’s chasing the seller’s solicitors to get that done and if I cross my fingers very, very, very hard, I might get the keys in the next few days.

However, I did take a pair of wire cutters and snip the ‘For Sale’ signs off both croft gates this afternoon – I’ll leave them with the seller’s solicitor when I pick up the keys.  That’ll get the village talking!

Get set…

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So I won’t be getting the keys for Christmas, but I’m a gigantic step closer – my solicitor has just emailed to say that the final query has been resolved and if I’m happy, then she is happy to issue the letter concluding missives.  (If you’re unfamiliar with the Scottish house-buying system, concluding missives means that you’ve bought it – you cannot now back out of the transaction without incurring very heavy financial penalties.)

All that needs to happen now is for the executor to sign the transfer paperwork and for the Crofting Commission to confirm acceptance of the transfer and put me on the Crofting Register as the tenant.  Hopefully we should be done and dusted some time next month and then the real work begins!

The countdown has begun

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I’ve had a letter from my solicitor!  It enclosed the reply from the seller’s solicitors, several maps and the entries from the Crofting Registers for the two crofts.  I’m not exactly certain why or how, but it seems that because the crofts are still held in Ethel’s name, it makes the paperwork an awful lot simpler and cuts out a lot of the waiting around for the Crofting Commission to approve things.  I think, although I may be wrong, that it essentially now treats me as if Ethel had nominated me to take over the tenancies.

Anyway, my solicitor has asked me to confirm that I’m happy with a few changes they’ve made to the clauses (things like the sellers not being able to warrant that the electricity works properly or there are no contaminants, because they’re the executors and haven’t lived there – usually in Scotland you have 2 weeks after the date of completion to report serious defects to the seller, this will essentially be cancelled) and as long as I am, then all I have to do is deposit the purchase price in my solicitor’s bank account and the other side will start the paperwork – my solicitor will hold the money in escrow until they’ve confirmed the transfer of the tenancies has been completed correctly.

So it’s SHOW ME THE MONEY!! time.  I am paying £95,000 for the two tenancies, so I’ve rung up the financial institution that runs the part of the family trust I’m borrowing the money from to see how much is in there.  This makes me sound like a total rich kid – I’m not, my father died when I was relatively young and his investments were put into a trust fund to provide an income for my mother for the rest of her life and capital growth for me and my half-brother to inherit after she dies.  For one reason or another, it’s split between two financial institutions and the bit I’m borrowing hasn’t been paying Mum an income for a number of years now, so my brother and I, as the trustees, decided that the trust would be better off loaning me the money to do this and I’ll pay Mum an income off it at a rate of base rate + 3%.

They told me that there was £91,500 in there and all we needed to do was write to them to confirm that we wanted to liquidate it (1% fee for liquidating it) and close the account.  They’ll also take a pro rata amount out for the quarterly management charge, so I’m expecting to get around £90,000 transferred into my bank account early next week, though this is a bank not renowned for its customer service skills, so I’m half-expecting it to go wrong somewhere!  The remaining £5,000 will either come out of my savings or Mum will add to it from her Premium Bonds so she gets the monthly amount she’s expecting in income.

Buying a croft

by In Ethel's House, Projects Tagged , , , , , , , 4 Comments

When is a house not a house?  When it’s a croft.

Technically, when I say I’ve had an offer verbally accepted on a house, that’s not strictly true.  I am, in fact, buying two croft tenancies, one of which happens to have a house on it.  Many crofting tenants have bought out their tenancies and become owner-occupier crofters, these two still remain as tenancies and the house site has not been decrofted, so the Scottish Ministers own the land and, assuming that I’m considered a suitable person to be assigned the tenancies, I will have to pay them rent for the crofts until I can buy them out.  The buy-out figure is usually 15 times the annual tenancy (which will not be huge – to give you an idea, the 3.12 acres that go with the house we currently live in was bought out by the previous owner for under £100) but once you’ve become an owner-occupier, if you sell the land on within ten years (recently increased from five years), you have to pay half the difference between the amount you paid and the current value back to the landlord.

It’s all a bit of a legal minefield and having a solicitor who understands crofting law is absolutely essential.  The formal offer that went in for these two tenancies ran to 23 clauses on top of the Scottish Standard Clauses and includes things that wouldn’t have crossed my mind, such as ensuring the crofts are sold “together with the whole permanent improvements, including the dwellinghouse” (it would be a shame to pay all that money and find they’ve bulldozed the place…), that “it is an essential condition of this offer that the Crofting Commission consents to the assignation of the tenancies” (it would also be a shame to pay all that money and not be able to do anything with the place) and various other clauses that ensure I don’t get stuck with any very large bills or long-lost claimants to the tenancies popping out of the woodwork.

The other big stumbling block is because the purchaser of the tenancies doesn’t own the ground the house sits on, it’s completely unmortgageable.  Even the bridging loan companies I rang wouldn’t touch it (not enough equity in our current house to back it up).  One absolute right a crofting tenant has, however, is to buy the house site from the landlord and have it decrofted – usually an area of 0.2-0.5 acres is permitted to be taken out of crofting tenure to give some garden space as well.  This then makes the house suitable for mortgage lending purposes. I’ll talk about finances in another post – I will be completely transparent about money on this blog – but I’m in the very fortunate position of being able to borrow money from family to make the initial purchase, on which we’ve agreed I’ll pay interest of Bank of England base rate plus 3%.

One of the conditions of the Crofting Commission thinking me a suitable person to be assigned the tenancies is that I work the crofts.  So I’m not only taking on a renovation project, I’m taking on just under 10 acres of fields, which means I’m going to be learning to keep sheep and make hay as well.  Never a dull moment!