Negligent Conveyancer?

jdesousa

Hello Forum,


My wife and I are selling our house which has a couple of covenants on it.

When we purchased the property our conveyancer advised us that the convenants were nothing to worry about as the holder of one of them was untraceable and the other covenant only restricted us from building a railway on our land. We decided that we did not need indemnity insurance as we were not planning on building a railway.

The purchaser of the property's solicitor has noticed that there are additional restrictions in the railway covenant and the covenant holder is still active. They have asked that all permissions and so on are retrospectively obtained and we are expected the fees for these approvals to run into several thousand pounds.

In this case, as the purchaser will not accept indemnity insurance as she has fallen foul of it in the past, having our own indemnity insurance would not have made any difference as it only pays out if the covenant holder contacts the owner and not vice-versa.

Do we have a case for negligence against our original conveyancer? He did not spot the additional condifitions in the railway covenant.

Many thanks,


John

pie81

You could possibly have a case for negligence. Depends on all the facts (is the covenant capable of different interpretations? how many years since you bought your home - there could be a limitation issue?)

However even if he was negligent, there is an issue as to what loss you have suffered by reason of the negligence. What would you have done differently if he had pointed out the additional restrictions?

Would you have paid less for the property - hard to prove, as the seller might not have agreed to a reduction. Would you have got indemnity insurance - doesn't actually help you as you wouldn't be covered anyway as you say above. Would you have gone and got the consents - if so then you would have incurred the costs anyway.

I think first you need to identify how you would have been in a better position if the issue had been spotted, then question whether he was negligent not to spot it.

hope that helps.

jdesousa

Thanks for your reply.

I think we should have been advised to do the same as our purchaser is being advised to do - ie, ensure that any modifications to the property have the correct consent of the covenant holder. Our main gripe is that the conveyencer neglected to say that any extensions to the property were subject to approval of the "railway" covenant, he appears to have missed this stipulation entirely.

silvercar

Sounds like you have a nervous / fussy buyer.

When you bought chances are you would have taken an indemnity policy as the hassle of getting consents would have taken too long, so you would be in the same position you are in now.

The last thing you want to do is contact the covenant holders as that will mean you can't take out an indemnity policy.

In your position, I would tell your buyers that all you can do is take out an indemnity policy and let them make the decision whether to proceed or pull out.

jdesousa

I know what you mean - we do have a fussy buyer, she has already indicated she will walk away - but if we tell her "thanks but no thanks" there is every chance that any future buyer may be given the same advice given that:

a) The current buyer has been advised this.
b) My conveyancer has told me she would have done the same.

The holder of the restictive covenant is well known in our area and to my mind we should have been fully advised of the restrictions when we made the purchase.

silvercar

I appreciate you may be able to pursue your conveyancer for negligence, but focus also on what you do now.


You are the owner of your property and you have to work out a way forward. I see two options:

a) take out an indemnity policy which will cover your buyers;

b) start the ball rolling to get the necessary consents. Think how long this will take and how much it will cost. Can you afford this time/ money?

As the rules on indemnity policies stop you taking one out if you have tipped off the covenant holder that you haven't got consents, it is an either/ or situation - not both. So you need to decide, with advice from your solicitor, which avenue to follow.