• Bankruptcy Forfeit Clause

    By Guest on 08th Nov 2014

    i am trying to sell my shared ownership property but have been told,i cannot get a mortgage due to a bankruptcy clause in the lease,can i still sell my share of the house even if i can't buy it

  • 1 Answers

    By Guest on 30/12/2014


    I am assuming you are referring to a clause which says that the landlord can forfeit the lease in the event that the tenant becomes bankrupt. A lease containing such a clause will not be acceptable to a mortgage lender since it would lose it's security if the borrower were to become bankrupt (which is quite likely if he can't pay his mortgage). You can therefore only sell to cash buyers (and even then a competent lawyer would advise a buyer not to proceed). You should have been advised of this very onerous clause when you purchased and you should contact the solicitor that acted for you at the time as depending on what advice you were given he may have been negligent. You should also contact the landlord with a view to rectifying the lease.

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