Our blog this week is about the total cost; of both time and money; for a client when a broker does not give a quick NO!

The client ticked all the right boxes; the property was a higher priced single asset worth £1.8m, unencumbered. Borrowing was 54% LTV.

The client was referred to Baya financial after three valuations and zero offers.  The point of referral to us was approximately 3-4 month’s after the client made their initial enquiry.

This particular property was registered in error at the point of purchase. It should have been in a Limited VAT registered company, but instead, it was registered in the applicants personal name.  The result was the formation of a Deed of Trust from HMRC so as to avoid duplicating Stamp Duty Land Tax (SDLT).  The Deed of Trust recognises that the beneficial interest in this property is the company, but the legal interest is the individual.

The client was, then, advised incorrectly, to move to a new Special Purpose Vehicle (SPV); a company set up specifically to own a single asset. At this stage, the advisor failed to recognise that it would always have to link to the original Ltd company because of the existence of the Deed of Trust.

The important thing with ALL cases that have a curve ball is to take the time to have a fully comprehensive fact find.  Once there is transparency between the client and the Broker, the Broker is best equipped to find a solution or to give a timely NO!

With this particular case, it helped that the client was absolutely transparent and efficient with providing the information.  We also have extensive knowledge of company structures, which definitely helped with this case.

A fee of 1% was agreed, but not applicable unless we got a formal offer– no upfront fee was charged, even though it was a previously declined case. We completed the case for the full amount required in just five weeks.

One thing that you can’t put a price on is the cost of the undue stress and time.

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