Sale Blocked by Potential Claim

Mandalena

Please can anyone advise me if there is a way through the following mess?

I was on the verge of exchanging contracts when I received a call from my estate agent. My buyers had been informed by their solicitor that there was a potential claim by my neighbour for tree root damage. By coincidence my buyers share the same solicitor as my neighbour. The neighbour and this solicitor are personal friends. Their solicitor thought it right to inform my buyers.
My buyers then requested me to find out more from my neighbour and sure enough there are concerns that one of my trees is causing her a problem and the matter is now in the hands of her insurance company.
The buyers solicitor has been trying to get me to admit liability in order to sell the house but as I yet don't know much about the issue and the tree is in a conservation area so it would need a great deal more investigation before the tree is proven responsible or not.
My buyers are very keen to proceed, the claim has not yet materialised, the delay has already been 6 weeks. Is there a way forward, my buyers have not been advised of one, my solicitor says I must wait for the claim to appear?
The property I am hoping to buy will soon be re-marketed.
I would be really grateful for your comments.

System

TBH I would report the buyers solicitor. There is at the moment no dispute. He should not be mentioning anything that is within another clients confidentiality, regardless of the fact that they are friends.

There is a definite conflict of interest.

Yorkie1

You're right about the confidentiality issue, !!!!!!, but it's possible that the solicitor hasn't actually breached any rules of conduct.

From the way the first post is worded, it is possible that the solicitor came by the information in his status as friend and not as solicitor. The matter is in the hands of the insurers and not legal bods at present.

Alternatively, even if he came by the information through his professional role, if authorised / requested by the client then he may disclose the information.

If you plan to report the solicitor, might be worth checking what's actually happened first.

Mandalena

Thanks for your replies. The solicitor has written that she is acting for both the buyers and my neighbour. When she disclosed the information her words were according to my buyers, "I shouldn't be telling you this, but .....
The problem is that I can't see how the buyers can proceed, because they now know about the issue of the tree they could be more liable than myself who didn't know, as it is a liability issue it has to be proved that I knew about the problem and failed to take any action. Also once my insurers are informed they may block the sale of my house. If there is a way through this both parties would be glad to hear of it.

Milliewilly

Mandalena wrote: »

Thanks for your replies. The solicitor has written that she is acting for both the buyers and my neighbour. When she disclosed the information her words were according to my buyers, "I shouldn't be telling you this, but .....
The problem is that I can't see how the buyers can proceed, because they now know about the issue of the tree they could be more liable than myself who didn't know, as it is a liability issue it has to be proved that I knew about the problem and failed to take any action. Also once my insurers are informed they may block the sale of my house. If there is a way through this both parties would be glad to hear of it.

I would be taking a dim view of these actions by the Solicitor. Her actions have effectively scuppered your sale or at least incurrred you more costs. The relationship between the buyers solicitor and your neighbour should not have been brought into the discussions of the sale. Discuss it with your solicitor.

Mandalena

Thanks for your reply.
I have discussed the issue with my solicitor and he agrees there is a conflict of interest but hasn't suggested taking any action against her as yet, perhaps he feels it would be counter productive as the main aim is to complete the transaction. I don't think my buyers are too pleased either with their representation not to mention the estate agent because I am both buying and selling through them.
The delay has unfortunately already cost me thousands of pounds because the property I hoped to buy needs refurbishment and I will not be able to benefit from the lower VAT rate. It is a commercial property and was to provide me with a home and income solution which is now on hold.
When the claim arrives, if it ever does, it could be for far less than what I have already potentially lost never mind the distress caused to all concerned.
I just wish I could move things forward, be really glad to hear your ideas.

Vincenzo

It is difficult to comment on the claim without knowing the detail but presumably it would be covered by your buildings insurance?

The problem is the claim has not yet been made and when the new owners take out insurance they will need to declare knowledge of this potential claim, otheriwse any claim they later made might be invalid.

Just a thought (I have no experience in this area) but could your buildings insurance policy be 'transfered' to the new owners, as is sometimes done in cases where a property has a history of subsidence? If this can be done, neither party should have a great cause for concern.

Alternatively once the claim is lodged and your insurance company is aware of it, there should be nothing to stop you moving on.

Mandalena

Vincenzo wrote: »

It is difficult to comment on the claim without knowing the detail but presumably it would be covered by your buildings insurance?

The problem is the claim has not yet been made and when the new owners take out insurance they will need to declare knowledge of this potential claim, otheriwse any claim they later made might be invalid.

Just a thought (I have no experience in this area) but could your buildings insurance policy be 'transfered' to the new owners, as is sometimes done in cases where a property has a history of subsidence? If this can be done, neither party should have a great cause for concern.

Alternatively once the claim is lodged and your insurance company is aware of it, there should be nothing to stop you moving on.

Thanks for your reply.
Because the claim is a liability issue it should hopefully be covered by my contents insurance. My solicitor suggested transferring the benefit of my insurance but we got no response to this offer. Because the solicitor has been trying to get me to admit liability on behalf of her neighbour other alternatives have not been considered. I don't know whether she informed my buyers of the offer or not.

Milliewilly

Vincenzo wrote: »

It is difficult to comment on the claim without knowing the detail but presumably it would be covered by your buildings insurance?

The problem is the claim has not yet been made and when the new owners take out insurance they will need to declare knowledge of this potential claim, otheriwse any claim they later made might be invalid.

Just a thought (I have no experience in this area) but could your buildings insurance policy be 'transfered' to the new owners, as is sometimes done in cases where a property has a history of subsidence? If this can be done, neither party should have a great cause for concern.

Alternatively once the claim is lodged and your insurance company is aware of it, there should be nothing to stop you moving on.

The new owners would not be liable as the claim would be classed as 'pre - inception damage' by the new owners insurers - it has to be a space of (I think 7 years) for the claim to go onto the new owners insurance.

Just a thought - has the buyers survey highlighted any problems?

If the claim process has actually started from the neighbours side did they not even mention anything to you knowing your house was up for sale and this could cause a problem?

Vincenzo

Mandalena wrote: »

Thanks for your reply.
Because the claim is a liability issue it should hopefully be covered by my contents insurance. My solicitor suggested transferring the benefit of my insurance but we got no response to this offer. Because the solicitor has been trying to get me to admit liability on behalf of her neighbour other alternatives have not been considered. I don't know whether she informed my buyers of the offer or not.

It does sound like the third party solicitor is the problem here. Your solicitor should have a quiet word and suggest that it would be in the interest of all parties to allow the sale to proceed with the benefit of the insurance and deal with the claim as and when (and if) it materialises. You will not, after all, be in a very coopoerative mood should your sale fall through!

I would also be inclined to call The Law Society for advice on the situation and whether the third party solicitor should be acting for your buyers.

Assuming yoru buyers are not happy with the situation - speak to them / your estate agent about switching solicitors and offer to cover any extra costs for this.

Mandalena

No, the neighbour did not mention anything to me at all about the tree at any time until I asked her about it having been told by my buyers who thought I should know. In fact my neighbour told me she had discussed it with her solicitor and they had decided to tell my buyers but not me, rather puzzlingly.
Apparently her subsidence problem is long standing and if my tree caused it I wonder why I haven't been told about it, I have lived next door for 7 years and am a reasonable person and would have tried to find a solution.