House sale fell through, solicitor at fault?

Leanne1812

Hi forum,

I am hopeful someone on here can advise me.

Firstly this is in Scotland where I know the law is different

My story is 3 years ago I was buying a property to rent out. 2 days before completion my solicitor rang me to inform me that the sale could not go through as the owner had secured debts on the property and the bank obviously would not let them sell. I had no idea that it could get to this stage in the proceedings and then fall through. My solicitor blamed the sellers solicitor for not checking and I accepted this. I had already paid my solicitor for his work and he advised me to seek compensation for my expenses( mortgage had already been arranged and the money was sitting waiting to be transfered) He suggested the expert who worked at his branch could help us pursue through the courts which we agreed to. We tried to pursue the seller through various means, court order, sheriff officer and letter of inhibition at a cost of £500!! All in vain............the debt now stands at over £4000 and it seems unlikely we'll ever recover our losses.

So, after all that ( I hope you can all get the gist of it!) does anyone have advice as to whether my solicitor was to blame for not finding out this information or is it just one of those things that can go wrong? I feel aggrieved as I still paid him his money in full yet I wonder was he at fault.

Also I feel so angry at the seller for thinking they could just do this at so much cost to us and walk away scot free.

Many thanks in advance.

Leanne

silvercar

In E&W you would have no comeback. A minute before exchange the seller can pullout for no reason.

In Scotland things are different, but I would still think it is for the seller's solicitor to ensure that there is sufficient money to release the charges; your solicitor would have no way of knowing what charges were on the property and when they were placed.

If you are asking if your solicitor should have known that the seller's weren't in a position to sell, the answer is probably not.

If you are asking if your solicitor should have advised you to pursue the seller for your costs, that is debatable. Your solicitor should have realised the sellers were mortgaged upto their eyeballs, whether he could be expected to realise that you would get no money from them is a grey area.
Why can't you put a charging order on their house to prevent them selling without paying you the money you are owed?

googler

If your solicitor can show that he made all possible efforts to get the selling solicitor to disclose truthfully his client's affairs, then he's unlikely to be held liable, either by The Law Society, or by a court.

If the other solicitor has basically pulled the wool over your solicitor's eyes, or lied to your solicitor, then you have to pursue the other solicitor, either through the courts or via Law Society - but it sounds as though you've done this already.

silvercar

googler wrote: »

If your solicitor can show that he made all possible efforts to get the selling solicitor to disclose truthfully his client's affairs, then he's unlikely to be held liable, either by The Law Society, or by a court.

If the other solicitor has basically pulled the wool over your solicitor's eyes, or lied to your solicitor, then you have to pursue the other solicitor, either through the courts or via Law Society - but it sounds as though you've done this already.

You can't sue the seller's solicitor - you have no contractual relationship with him.

You could possibly sue the seller, if they breached missives.

Leanne1812

silvercar wrote: »

In E&W you would have no comeback. A minute before exchange the seller can pullout for no reason.

In Scotland things are different, but I would still think it is for the seller's solicitor to ensure that there is sufficient money to release the charges; your solicitor would have no way of knowing what charges were on the property and when they were placed.

If you are asking if your solicitor should have known that the seller's weren't in a position to sell, the answer is probably not.

If you are asking if your solicitor should have advised you to pursue the seller for your costs, that is debatable. Your solicitor should have realised the sellers were mortgaged upto their eyeballs, whether he could be expected to realise that you would get no money from them is a grey area.
Why can't you put a charging order on their house to prevent them selling without paying you the money you are owed?

Thanks for your advice. The reason i'm asking this question 3 years down the line is that one of my husbands work colleagues is buying a house and he thought after hearing what happened to us our solicitor may have been at fault. Our solicitor did comment to us that he wondered if the sellers solicitor was properly qualified as he tried to withdraw from the sale with only 2 days to completion which is apparently impossible to do at the stage we were at.

The Letter of Inhibition that we obtained is equivalent to the charging order in E&W ( I believe) and unfortunately the house was eventually repossesed which overruled the inhibition so we got nothing there either.

It looks like we have just been extremely unlucky but I believe there's no time bar on this debt so we may well try to pursue at a later date if we feel the sellers are better off financially to pay this debt. It just seems so unfair that through no fault of our own we were left hugely out of pocket.

Thanks again for clearing this up. I didn't like to feel our solicitor may have been at fault as he has dealt with 3 other house sales for us and I would gladly use him again.

dopester

Leanne1812 wrote: »

It looks like we have just been extremely unlucky but I believe there's no time bar on this debt so we may well try to pursue at a later date if we feel the sellers are better off financially to pay this debt. It just seems so unfair that through no fault of our own we were left hugely out of pocket.

So all this happened 3 years ago.

You think yourself unlucky with your wannabee BTL purchase? How much were you about to pay for the property? How much was it later worth or sold for as a repo? How much is it worth today? You've probably been very lucky that it didn't go ahead.

Anyway as regards the £4000 blown away, just another BTL education as far as I'm concerned. Think of it as just one of the commercial risks you take on in this sector. It isn't just some sure thing, paradise money-maker. Education.

martindow

Leanne1812 wrote: »

I believe there's no time bar on this debt

Is this correct?

Leanne1812

martindow wrote: »

Is this correct?

I'm positive that's what our solicitor told us. At £150 p/h I would hope he knows what he's talking about.

Leanne1812

dopester wrote: »

So all this happened 3 years ago.

You think yourself unlucky with your wannabee BTL purchase? How much were you about to pay for the property? How much was it later worth or sold for as a repo? How much is it worth today? You've probably been very lucky that it didn't go ahead.

Anyway as regards the £4000 blown away, just another BTL education as far as I'm concerned. Think of it as just one of the commercial risks you take on in this sector. It isn't just some sure thing, paradise money-maker. Education.

It's completely irrelevant that this happened to be a blt purchase, it could have happened with any house sale.

Yes I do consider myself unlucky. We already have 2 blt which perform very well for us. We had a tenant lined up for this property and it caused all sorts of problems for us and the tenant. It's a long term investment for us and we're looking into buying another property soon so don't be so down on blt it does work.

silvercar

Why didn't you buy it following repossession?

Notwithstanding your solicitor's expensive knowledge, I thought unacknowledged and unsecured debts are not legally enforceable after 5 years in Scotland. (6 years in E&W), so unless you get some acknowledgement or a charging order equivalent, you may find that you can't chase. Also, if the debtor becomes bankrupt in that time, the debt forms part of the bankruptcy.

Leanne1812

silvercar wrote: »

Why didn't you buy it following repossession?

Notwithstanding your solicitor's expensive knowledge, I thought unacknowledged and unsecured debts are not legally enforceable after 5 years in Scotland. (6 years in E&W), so unless you get some acknowledgement or a charging order equivalent, you may find that you can't chase. Also, if the debtor becomes bankrupt in that time, the debt forms part of the bankruptcy.

We did try to buy the property but it was too late, an offer had already been made which the bank had accepted. I did contact them directly about this letter of inhibition and explained our situation but unfortunately they are only interested in getting their money, repossession wipes out our claim.

I am going to phone and clarify how long we could pursue this debt and i'll let you know.