Legal advice first time buyer

[Baileylord234]

Hi everyone,

I am a first time buyer. I have been in the process three months so long enough for a chain free empty property. I exchanged on the 16th dec, due to complete on 17th when I got an EMAIL from my solicitor not even a phone call to inform me that completion cannot happen as a historical charge was found on the property right after she sent my mortgage funds to the sellers solicitor. It took me a further 2 hours to get through to her on the phone to figure out what exactly was going on just for her to tell me “not my fault sellers solicitors where supposed to removed the charge” with absolutely no clear plan or explanation to where I stand. The charge is a 27 year old previous morgage that was never removed from the land registery and the sellers solicitors claimed it would be impossible to remove the charge and told me to get indemnity insurance which my lender would not accept in any circumstances. This happened on Wednesday which gave them 3 days to sort this out or come up with some sort of action plan on what happens next but I got absolutely no contact from anyone unless I asked for an update on what happened. It seems all the solicitors want to do is point fingers instead of actually do anything and it’s really taking a toll on my heath the stress it’s caused me as even if I get my deposit back I’ll be out at least £2500 not including any smaller costs I’ve incurred along the way which would make it near impossible for me to afford a different house anytime soon. I’m also paying for insurance on the property as I was told not to cancel it as ir would mean the property would be uninsured and I would be liable as I exchanged and signed contract. Solicitors are now closed for two week for Christmas so I have to deal with 2 weeks of stress and uncertainty. I just don’t know what to do and wondering if anyone has been through anything similar and if the hosue doesn’t complete if I would be able to claim costs from anyone? I am actually getting ill with stress and have a feeling I have a long roads in front of me which I will be unable to cope with.

 

[BUDFORCE]

Yea your mortgage lender won't be completing on the mortgage if there is a charge on the property that can't be removed.

It'll adversely affect the title and make the property unsuitable security.

Sorry, I'm probably not helping and I'm saying something you already know, that isn't your fault though not the fault of your mortgage lender either.

You've been unlucky though.

 

[Baileylord234]

Surely there should be a way the charge can be removed tho. I could end up with nothing as I don’t earn a great amount so building up the lost funds could take me months. So unfortunately it’s not a case of walk away and find another house because I couldn’t afford legal fees surveys and morgage advisor fees for another property for at least another year

 

[nutsnut]

It shouldn't be difficult for you solicitors or the sellers solicitors to access land registry and find out who the charge is with, they've actually already done that to evidence the first charge etc.

If its a lender, they will need to write to the lender to obtain approval for that security to be released. You wont be able to apply a 2nd charge to the property as the debtors against the first ans 2nd charges will be different.

I have come across similar scenarios whilst doing property undertaking, it shouldn't ve hard for the sellers solicitors to resolve as long as the first debt has been settled to will be settled with the proceeds of the sale.

 

[R.C.Anderson]

Also, just to calrify, if you've already exchanged contracts, that means you've leagally agreed to purchase the house, which is why you need to keep insurance on it (e.g. if it burns down before completion, you are still legally obligated to purchase the property, so you want insurance to cover this). This also means you'll most likely be liable for 10% of the purchase price if you didn't complete (this can vary, but 10% is the standard & will be stated in your paperwork), rather than just your legal fees etc.

I'm sorry if it sounds like I'm making things worse, that's not my intention, I just wanted to make sure you were aware of the state before you make a decision. In short, your best option is to get onto your solicitors on a daily basis to push them to get this sorted. It might not be common, but it won't be the first of last property for this to happen with, so they should know what to do (although I'd expect most of the work would be on your seller's solicitors, you need yours to be pestering them).

 

[Haggisman]

Also, just to calrify, if you've already exchanged contracts, that means you've leagally agreed to purchase the house, which is why you need to keep insurance on it (e.g. if it burns down before completion, you are still legally obligated to purchase the property, so you want insurance to cover this). This also means you'll most likely be liable for 10% of the purchase price if you didn't complete (this can vary, but 10% is the standard & will be stated in your paperwork), rather than just your legal fees etc.

Would the OP not have a case against one of the involved solicitors for any losses incurred?

After all, it's due to their **** up that he's in this situation!

 

[Slam62]

I would think that the exchange of contracts is invalid, it’s impossible for you to complete the purchase.
Your solicitor transferred funds over which they had no right to so that part is nothing to do with you.
I would refuse to take possession and tell your lender your solicitor is liable for the money.
Also your solicitor needs to give you your deposit back.
As for the rest of the expenses they will also be liable for those as they have been negligent.

It will take time but your solicitor needs to tell you the real state of play.

Just to add , they were wrong to exchange contracts and wrong to transfer funds , I expect your lender will be after them as well. I’m pretty sure though, at some point this will dawn on your solicitor and they will shift heaven and earth to get it sorted.

Have you got somewhere to live in the meantime? You can charge any costs to your solicitor.
I would keep paying the insurance but technically you’re not liable for anything to do with the house at this stage.
Unless you’ve omitted something important your solicitor is liable for everything as far as your concerned.

 

[BUDFORCE]

I have come across similar scenarios whilst doing property undertaking, it shouldn't ve hard for the sellers solicitors to resolve as long as the first debt has been settled to will be settled with the proceeds of the sale.

I'm guessing there is a complication though.

Yes removing the existing charge is usually bread and butter, the fact, upon release of funds that couldn't happen would indicate there is some unforeseen issue.

You get all sorts of weird things come up, usually quite mundane but can cause an issue, although usually can get sorted out.

You never know the party that holds a charge on the property might not be a mortgage lender, could be a private individual, say that person passed away and the finance was never repaid.

Although you'd thought that would be checked sooner.

It's bloody rare though, particularly for this to happen at the last minute, it would suggest someone somewhere did **** up.

 

[R.C.Anderson]

Would the OP not have a case against one of the involved solicitors for any losses incurred?

After all, it's due to their **** up that he's in this situation!

Quite likely, but unless an agreed by all parties beforehand, I'd expect the liabilities still exist & any recovery of losses would likely come seperately (and likely through the solicitor's liability insurance, if they've failed to do their job properly, which it looks like they have)

 

[Nigel Kingdon]

I thought that for around £4 you can request a copy of the deeds from the Land Registry, this will show who the creditors/chargees are.