Seller's solicitors not answering questions, being unreasonable or just incompetent?

Tony_R

Hello,

This is a very long question. I would really welcome any feedback though.

I am currently in the process of buying a house. The house is from a part exchange/building company, where the current occupants have bought a new build and traded this house in for it, and I'm buying the house from the builders. We have already paid for the survey which valued it at £235,000, while our bid was originally £246,000. I took a builder along to reinspect who agreed with me that most of what the things which the surveyor picked up on were just incorrect. Anyway we agreed not to reduce our price.

We also noticed a "option agreement" which the previous occupants had agreed with another building company allowing them to purchase the site (along with a number of ajoining properties). That was put in in 2007, but planning permission was never granted. We asked the sellers to withdraw the "option agreement" from the land registry which then confirmed and sent our solicior a copy of the letter to land registry confirming it, and we were happy.

However, yesterday I received this letter from my solicitor, which is quite worrying.

I have now heard back from the Seller’s Solicitors with some of the additional replies to enquiries.

Unfortunately the Seller’s inform me that the Solicitors who acted for the Registered Proprietors have confirmed that their client is not willing to reply to questions numbered 4 and 6 through to 12 inclusive nor points 19 to 21 inclusive. I am not sure why this is but if the Sellers have already tied up their deal with the Sellers this may be the reason. However this is not assisting in your purchase and you should think very carefully before proceeding in the light of this.

Likewise your Seller’s are not prepared to enter into a clause in the contact to say that they will complete their registration prior to the time that you must buy the property. I would not recommend that you proceed on this basis. I have put a clause in the contract, as below:-

[24. The Seller is the owner or has contracted to acquire the Property from a third party but in the event that the Seller’s title has not been registered then the title shall comprise a copy of the entries in the register and filed plan with the Seller’s vendor as proprietor together with a copy of the Transfer to the Seller from the Registered Proprietor to the Seller duly executed by the parties and if the like situation arises by the Completion date then the Title documents to be provided to the Buyer shall comprise EITHER (where registration is yet to be applied for) the documents of title leading to the Seller’s acquisition a completed Land registration AP1 form, a cheque for the Land Registry fees, Transfer from the Registered Proprietor to the Seller duly executed by the parties from the Registered Proprietor to the Seller duly executed by the Parties, Land Transaction Certificate, the undertaking at 2 below, form DS1 and the Transfer to the Buyer and up to date clear HMLR search in the name of the Seller OR (where registration has been applied for) 1. copies of (a) the form DS1 (b) the Transfer to the Seller and Land Transaction Certificate (c) the Land Registry application cover completed by the Seller’s Conveyancers 2. An undertaking by the Seller’s Conveyancers to deal with any requisitions from the Land Registry so registration can be perfected on the Seller’s application and 3.]

Without this clause there is no guarantee that I can make to you that the property will be passed to you. The Seller’s Solicitors have offered that upon completion they will forward to us the Transfer to their client from the Registered Proprietor together with the necessary form for the Land Registry and pay the application fee to the Land Registry. However, this does not go far enough as if there are requisitions to be raised by the Land Registry then they must deal with the same. Unfortunately therefore I cannot recommend that you proceed until this is deal with. I do need also to report matters to your Mortgagees who will not accept the position as it stands.

Likewise the Seller’s Solicitors say they will supply any discharges of mortgages but can only do so once they receive the same themselves. Clearly an undertaking is required to discharge mortgages.

Finally the Seller’s Solicitors say that they will not, despite previous affirmation orally, confirm that they will insert a clause to the contract to say that the option agreements will be removed from the title. Whilst the same appear to have been removed from the title, it does not take into account any that may be in place before completion.

There are a number of approaches that you can adopt:-

1. You can go back to the Seller’s Solicitors for a third time asking them to amend the contract although this may be a waste of time in the light of their letters.
2. I can explain to the estate agents why matters cannot proceed unless alterations are made so that they can put pressure on the Seller’s to do so.

I have already pointed out to the Seller’s Solicitors that their client agreed to the clauses which I have proposed in other contracts on other properties and I can see no reason why they cannot do so here. You will be prejudiced if you agree to the clause which they have offered.

There are other clauses in the contract which are not ones that I would recommend and these are as follows:-

1. They are insisting that VAT will be payable on the transaction. Clearly the price you are paying should be without VAT and indeed I cannot see how the same would apply for a property which is not brand new in any event.
2. There is a clause in the contract to say that you will forfeit the deposit whether they are responsible for the completion not taking place. This is clearly not fair. I have asked them to confirm that this will only apply in the event that you default from your contract.

I appreciate the above are fairly heavy matters that you need to consider and I await hearing from you in due course. If you need to see me or speak to me then do not hesitate to do so.

Below are the questions which the sellers/builders are unwilling/unable to answer and had for approximatly a month before they exchanged with the current people living there. They will then sell on to us.

4. To the Vendor’s and registered proprietors knowledge, has the property suffered from:-
(a) Wet/dry rot?
(b) Wood infestation?
(c) Subsidence?
(d) Flooding?
(e) Radon Gas contamination?
6. Please confirm that the Vendor and registered proprietor will not arrange for the telephone to be disconnected without prior reference to the Purchaser.
7. Is the telephone to be transferred? If not, please provide details of the existing telephone number.
8. Please confirm that all of the Vendor’s and registered proprietors property and rubbish will be removed from the property including the loft and garage (if any) on or before completion.
9. Please confirm that any damage caused to the property by reason of the removal of fixtures and fittings will forthwith be made good by the Vendor and registered proprietors to the reasonable satisfaction of the Purchaser.
10. Is the Seller or the registered proprietors aware of any planning applications within the immediate vicinity of the property?
11. Please forward in relation to the construction and alterations of the property.
i. the relevant Planning Permission
ii. Building Regulation Approval (or if not obtained the Regularisation Certificate from Building Control)
iii. Final Certificate of Completion of Works under Building Regulations
iv. Any consent required under restrictive covenants contained in the deeds – we note they are required
12. In view of the “Cottingham v Attey Bowers & Jones” case please confirm that the Sellers or the registered proprietors have made no application for Building Regulation consent that has been refused by the Local Authority.
19. Please confirm whether there has been any correspondence from any authorities concerning the railway at the rear of the property which could affect the property and, if so, please forward copies to us.
21. Please forward to us Water Service Charges. This is particularly important as the water is metered.

Now I'm pretty sure the VAT on the house purchase and us losing a 10% deposit if they pull out is just wrong. But the solicitor needs to go back to them. I obviously won't agree to that.


Them not being willing to to put a clause, guaranteeing the "option" is removed, is just wrong?
The same for them not putting the clause registering the house needs to be rectified.


But, before the solicitor gets back to them about that he wants me to decide whether I want to go ahead with no answer to the other original questions (4,6-12,19-21), which they had for a month before exchanging contractswith the current vendors. Apparently they complete on the 25th. They got no answers to our questions, so exchanged anyway, and don't seem to bothered by those questions, and seem shocked why we need them answered. Some of the questions do seem very minor, but others don't. Are we being unreasonable insisting on those questiosn being answered?



If we walked now we would lose £400+vat on solicitor feeds, £60ish on the chancel+enviromental search. We have told our solicitor not to proceed with the other searches till we get satisfactory answers. We'd also lose £470 for the survey.



My current thought is to give them a deadline of next Friday to get everything answered and threaten to walk. Is that unreasonable?

timmyt

Tony_R wrote: »

Hello,

This is a very long question. I would really welcome any feedback though.

I am currently in the process of buying a house. The house is from a part exchange/building company, where the current occupants have bought a new build and traded this house in for it, and I'm buying the house from the builders. the builder may either have taken a transfer from he registered owners, which must be registered at the Land Registry...and who take only days to register it, or they have a blank transfer they can add your name to so the builder contracts with you but gets the transfer from the registered owner. We have already paid for the survey which valued it at £235,000, while our bid was originally £246,000. I took a builder along to reinspect who agreed with me that most of what the things which the surveyor picked up on were just incorrect. Anyway we agreed not to reduce our price.

We also noticed a "option agreement" which the previous occupants had agreed with another building company allowing them to purchase the site (along with a number of ajoining properties). That was put in in 2007, but planning permission was never granted. We asked the sellers to withdraw the "option agreement" from the land registry which then confirmed and sent our solicior a copy of the letter to land registry confirming it, and we were happy. that has to be removed from the title which I assume is on there....not knowing what the 'option' says is hard but it will presumably bind you once you buy so is not acceptable to your lender

However, yesterday I received this letter from my solicitor, which is quite worrying.




Below are the questions these are very general and are quite frankly irrelevant and can be checked by you independently or not at all. i do conveyancing and these are too many general questions. If the registered owner has sold, why should they answer them, and even if they did, not sure how the replies become contractual to you when your contract I assume is with the builder which the sellers/builders are unwilling/unable to answer and had for approximatly a month before they exchanged with the current people living there. They will then sell on to us.






Now I'm pretty sure the VAT you don't pay VAT ever on a residential building on the house purchase and us losing a 10% deposit if they pull out is just wrong. But the solicitor needs to go back to them. I obviously won't agree to that.


Them not being willing to to put a clause, guaranteeing the "option" is removed, is just wrong?
The same for them not putting the clause registering the house needs to be rectified.


But, before the solicitor gets back to them about that he wants me to decide whether I want to go ahead with no answer to the other original questions (4,6-12,19-21), which they had for a month before exchanging contractswith the current vendors. Apparently they complete on the 25th. They got no answers to our questions, so exchanged anyway, and don't seem to bothered by those questions, and seem shocked why we need them answered. Some of the questions do seem very minor, but others don't. Are we being unreasonable insisting on those questiosn being answered?



If we walked now we would lose £400+vat good price as your lawyer seems thorough on solicitor feeds, £60ish on the chancel+enviromental search. We have told our solicitor not to proceed with the other searches till we get satisfactory answers. We'd also lose £470 for the survey.



My current thought is to give them a deadline of next Friday to get everything answered and threaten to walk. Is that unreasonable?

see in red.

in addition, why is the buolder not the new registered owner. until you answer that i cannot comment on the lawyers suggsted clause 24, but I agree the wording of it as a clause. if the builder is not the registered owner, then clause 24 is a must, as what are they currently offering to you if they are not the owner?

<sebb>

I'm surprised you havent walked away already!
As for the questions I'd want questions 4 8,9 and 11 to be answered.

poppysarah

You're going to lose a bit if you walk now. But keeping your sanity is more important.
Questions need to be answered.

Ignite

Forget the phone stuff. BT will always close the account when somebody moves and a new number will normally be put on the line. Therefore that is not worth worrying about.

As somebody has already said, 4, 8, 9 and 11 are very important and you should not buy if these have not been answered. 19 is rather important as well. 12 could be relevent if you are looking at doing work to the property. As far as the water costs go, you can find this information out from the water company. They will be able to estimate how much you will use based on the number of people living in the property.

Tony_R

I agree 4, 8, 9 and 11 are the most important ones for me. However the sellers (the building/part ex) company now say that the people they are buying from are refusing to answer the questions, and they are purchasing the house from them regardless. They complete their deal with the currnet vendors on the 25th. Surely, if we pulled out, whoever else buys from them will ask the same questions?

My current thought of action is to give them a deadline of next Friday to get those 4 questions answered. Again, if they refuse/are unable to answer, we will simply walk away.

If those are answered successfully we will give them another week to get the bigger quesions answered.

a) Us not paying VAT.
b) Having to forfeit 10% if they pull out, and not us (quite ridiculous).
c) Getting the registration clause sorted. This may be easier, once they have completed their purchase.
d) Getting the "option agreement" clause put back in.

The "option agreement" is something the current vendors agreed with another building company a few years ago. This gave the building company an option to buy the house (along with some others), demolish it and build a new development.

They never got planning permission, but it is still in the deeds/title. They now say it has been removed from the title/deeds (which is good). But they are refusing to put in a clause into the contract to confirm their will no more "options" in the deeds before we complete. I really cannot see why they cannot agree to this.

Tony_R

After giving it a lot of thought over the weekend, we have decided to walk away.:(

We do really do love the house, but head is going to rule over heart on this one. They have no real excuse of not getting answers to those earlier questions, they had them for over a month before exchanging with the current vendors.

The refusal to put guarantee the title transfer, the refusal to put a guarantee that there will be no option agreement in the deeds, the requesting of VAT on the house purchase and expecting us to lose 10% even if its their fault, is far too much.

I could give them a chance to rectify it, but they just seem really underhand to me. These cannot simply be mistakes, if they are I'll suggest they sack their solicitor.

I'm going to tell my solicitor first thing in the morning that we are withdrawing our offer. I guess it's common courtesy to tell the EA directly, or would the solicitor do that?

Milliewilly

Tony_R wrote: »

After giving it a lot of thought over the weekend, we have decided to walk away.:(

We do really do love the house, but head is going to rule over heart on this one. They have no real excuse of not getting answers to those earlier questions, they had them for over a month before exchanging with the current vendors.

The refusal to put guarantee the title transfer, the refusal to put a guarantee that there will be no option agreement in the deeds, the requesting of VAT on the house purchase and expecting us to lose 10% even if its their fault, is far too much.

I could give them a chance to rectify it, but they just seem really underhand to me. These cannot simply be mistakes, if they are I'll suggest they sack their solicitor.

I'm going to tell my solicitor first thing in the morning that we are withdrawing our offer. I guess it's common courtesy to tell the EA directly, or would the solicitor do that?

I think thats the right decision based on what you have posted. There is no harm letting the EA know - your solicitor may charge you a phone call to do it!

timmyt

those questions you had outstanding (4,8,9 etc) are trivial and virtually all lawyers do not raise them - you can have a surveyor answer them for you. the seller is under no duty to warrant the state and condition of the property in this country. have a survey

the option agreement is not registered and your title will reveal any more - sounds like there are none

and

why they have not been registered yet as the owners has not been explained yet to us readers, but sounds easily overcome.

pity for you as a better lawyer acting for you would probably have explained the issues far better.

Richard_Webster

Builder's solicitor seem to have been rather lax as in my experience they tend to ask everything under the sun when they are acquiring a property in part exchange so they can answere enquiries from future buyer's solicitors!

<sebb>

timmyt wrote: »

those questions you had outstanding (4,8,9 etc) are trivial and virtually all lawyers do not raise them - you can have a surveyor answer them for you. the seller is under no duty to warrant the state and condition of the property in this country. have a survey

They've had a survey done! I dont think they are trivial at all.

Refusal to say whether any work has been carried out and if building regs were complied with? I'd want to know this!! And I'd want to see the certificates. You'll need to provide them to your next buyer.

Also, as for 8 and 9, I doubt anyone would be very happy to move into their new home with a whole pile of rubbish left there that needs disposing of later.

Perhaps the answers to some of the questions arent that important, but the fact that they won't answer them is far more telling IMO.