Solicitor problems

littlecherry

Can anyone help/advise?

We are first time buyers and are in the process of purchasing a property - our solicitor has told us were coming up to completion etc.

The vendor appointed her husband to conveyance - he's not a qualified conveyancer however we were told that they can still go ahead and do it (this is something we were told at the start).

Our solicitor has just told us our lender will only loan us the money if the vendor instructs a solicitor - he said he discussed this before (with the husband, which we were not aware of) and he stated if this issue arose he may require us to cover the fee of the vendors legal representation!

Is this normal? Do we HAVE to pay these costs? Our quote for conveyancing in total was aprox £800 does this mean this is aprox what the seller is looking for us to pay?

I will be calling my solicitor on Monday to discuss this, I just wanted some advice from here first.

Many thanks.

terryw

I doubt very much if your lender have made it a condition of granting a mortgage that your vendor employs a solicitor. If your vendor has no mortgage on his property then it makes perfect sense for him to DIY the clerical work involved - his main concern is receiving the sale price at the same time as he hands over the transfer.

If there is a mortgage (as is likely) then your vendor by DIYing has a problem. He must settle the mortgage before or at completion. This is fine if he has a bundle of cash to do this, but again it is unlikely. The problem is that your solicitor will not hand over the purchase price until he is absolutely satisfied that the mortgage is paid off. In the olden days (until about ten years ago) this was solved by completion taking place at the office of the vendor's mortgage company. Your solicitor would hand over a draft to cover the mortgage and the mortgage company would give a receipt or an undertaking, and the balance would be given to the vendor in return for the completed transfer document. Everyone then left quite happy with the arrangement.

Nowadays the mortgage companies require the mortgage to be paid off by post or electronic transfer.
Your solicitor must be absolutely satisfied that the mortgage will be paid off but unfortunately he obviously can't accept the vendor's word or an undertaking from the vendor. This is where a solicitor for the vendor is required - your solicitor will happily accept an undertaking from another solicitor.

From a practical point of view, all this means is that it is extremely difficult for a DIYer to do their own completion if a mortgage is involved.

The good news is that your contract (prepared by your solicitor) covers this. The obligation is laid firmly on the vendor to clear all mortgages before or at completion. It is up to your vendor to arrange a method of discharging the mortgage. This is his problem - you should not certainly not be paying his expenses in clearing his mortgage.

Bananamana

littlecherry wrote: »

Can anyone help/advise?

We are first time buyers and are in the process of purchasing a property - our solicitor has told us were coming up to completion etc.

The vendor appointed her husband to conveyance - he's not a qualified conveyancer however we were told that they can still go ahead and do it (this is something we were told at the start).

Our solicitor has just told us our lender will only loan us the money if the vendor instructs a solicitor - he said he discussed this before (with the husband, which we were not aware of) and he stated if this issue arose he may require us to cover the fee of the vendors legal representation!

Is this normal? Do we HAVE to pay these costs? Our quote for conveyancing in total was aprox £800 does this mean this is aprox what the seller is looking for us to pay?

I will be calling my solicitor on Monday to discuss this, I just wanted some advice from here first.

Many thanks.

Yes your lender may require the vendor to appoint a solicitor before they release funds.

I am presuming the vendor has no mortgage over their property or is repaying it before completion. If not your solicitor should have taken a firm stance against DIY a long time ago.

As its your lender who requires him to appoint someone it is arguable the cost should fall to you. Really though? You should push for the vendor to pay.

terryw

I thought that this topic would bore the pants of most people, but as a few peeps have thanked me, there is obviously some interest out there, I thought that I would give a little more information.

For what it is worth, I sold a house as a DIYer and I had this problem -paying off the mortgage to the satisfaction of the buyer's solicitor on or before completion. As luck would have it, there was no chain either side and I happened to know the buyer's solicitor from some twenty or more years ago. The mortgage company would only accept redemption via drafts or electronic means to their head office.
I rang the buyer's solicitor to arrange a completion date, and we had a nice little chat about the old days. He was retiring shortly, and must have been in a good mood.

He suggested that he would pay off my mortgage from the sale price and then send me the difference once he received confirmation from the mortgage company that the mortgage had been settled. I was quite happy (nay estatic!) with this suggestion and this is exactly what happened. I received the net proceeds four days later.

I don't for one moment suggest that other solicitors will be so accommodating, and this story may be of little use to the OP.

Just out of interest, have any other DIYers had this problem in recent years and how have they solved it?

LadyLawyer

The last post is the most useful to you. There are implications not just because of the mortgage that may exist on the property you are purchasing but also because your mortgage lender (and you as it goes!!) need to know you are sending the purchase monies to someone who can be held accountable for handing over an executed transfer deed (without this the property will not be able to be registered in your name for a start) and can provide evidence of any mortgage redemption. To be honest this is something that should have been sorted out much earlier but if you solicitor is not very experienced they may not have taken a firm stance or thought it is not as important as it is. Your vendor should pay his own costs just as you are, and if he does not want to, then he should have required a higher price in the beginning to sort this out.

As far as the contract goes this is always drafted by the sellers or their legal representatives and therefore unless this chap is a retired solicitor or some such other professional your solicitor will already have had to spend a lot of time doing this guy's job for him and rewriting his paperwork if he/she is unlucky.

The point about the mortgage is exactly right, I have been in this situation and insisted I pay of the mortgage on the property my clients are buying, but I didn't have a mortgage lender on my client's purchase to answer to and if you are borrowing your solicitor will need to report to the lender how exactly they intend to deal with this situation.

Your quickest route of getting this sorted is have a word with the estate agents to get your vendor moving forward in an appropriate way and if necessary they may need to drop their commission a bit to help cover his legal fees. His should be less than yours though.

terryw

LadyLawyer wrote: »

The last post is the most useful to you. There are implications not just because of the mortgage that may exist on the property you are purchasing but also because your mortgage lender (and you as it goes!!) need to know you are sending the purchase monies to someone who can be held accountable for handing over an executed transfer deed (without this the property will not be able to be registered in your name for a start) and can provide evidence of any mortgage redemption. To be honest this is something that should have been sorted out much earlier but if you solicitor is not very experienced they may not have taken a firm stance or thought it is not as important as it is. Your vendor should pay his own costs just as you are, and if he does not want to, then he should have required a higher price in the beginning to sort this out.

As far as the contract goes this is always drafted by the sellers or their legal representatives and therefore unless this chap is a retired solicitor or some such other professional your solicitor will already have had to spend a lot of time doing this guy's job for him and rewriting his paperwork if he/she is unlucky.

The point about the mortgage is exactly right, I have been in this situation and insisted I pay of the mortgage on the property my clients are buying, but I didn't have a mortgage lender on my client's purchase to answer to and if you are borrowing your solicitor will need to report to the lender how exactly they intend to deal with this situation.

Your quickest route of getting this sorted is have a word with the estate agents to get your vendor moving forward in an appropriate way and if necessary they may need to drop their commission a bit to help cover his legal fees. His should be less than yours though.

Thank you, LadyLawyer, for a smashing post. You have given some excellent advice and suggestions.

I really do not wish to fall out with you, but I must take take issue over this paragraph:

"As far as the contract goes this is always drafted by the sellers or their legal representatives and therefore unless this chap is a retired solicitor or some such other professional your solicitor will already have had to spend a lot of time doing this guy's job for him and rewriting his paperwork if he/she is unlucky."

Way back about 1970, I became a DIYer. In those days, believe it or not, solicitors had an absolute monopoly over the fees on the simple transfer of property. Their fees in real terms were far higher than today where competition has caused drastic reductions. I bought a new Datsun car for £1000 and had no "fees" to pay but to buy a cheap dwelling for £800 I was compelled to pay £250 costs. "No way", quod I, already a fledgling MSE.

I read the books, mainly "The Conveyancing Fraud" by Michael Joseph. One helluva guy, may he rest in peace.

The actual mechanics of a purchase or sale were (and still are) absolutely straightforward. Bluntly, if anyone has the ability to complete a passport application and send it off without checking and knowing that it is corect then said person has the ability to do the clerical work involved in the purchase or sale of a property. The passport application is by far the most difficult!

Over the years, I have bought and sold over sixty properties all DIY.
I could bore you or amuse you with many stories of the c*ck-ups made by the professionals. I shall spare you these stories, you will be pleased to hear.

The Solicitors Act which gave the legal profession the monopoly was repealed, and scandalous prices came down.

Solicitors do not. Repeat "do not" do the other guy's work for him. It is far more likely that the DIYer will do the work of the incompetent or lazy solicitor.

All of my stuff above does not really help the OP. Follow the advice already given.


On the other hand, if any wayfarer from cyber-space is reading this
thread, and they are buying or selling WITHOUT a mortgage then do the clerical work yourself. You will save a fortune, but more important, you will be in control of the whole ritual dance. Go to the reference library and check out the self-help guides.

If you are buying or selling WITH a mortgage then you have the completion problem outlined in earlier posts.

bw

terryw

P.s. I hope that the OP keeps us up to date. Thanks

M.Holloway

I'd recommend you get the vendor to instruct a solicitor. Purely so that if things go wrong, the solicitors will be insured (£millions)

The mortgage provider will be thinking the same thing "some guy...no insurance...gonna try to do this on his own...risk = high...errr"