Completed on house, now demand for more money from Solicitor ....

Morglum

Hello,

I have recently bought a property and completed on this and have been moved in since the start of the year. The solicitor we used to purchase the house has today sent a letter stating that they have messed up the Financial Statement and in fact the advance from the Mortgage company was not as much as they thought and are 900.00 short from their accounts.

They are asking for a cheque from us even after we have paid in full the Completion statement
settled with them weeks ago and have paperwork to show the financial statement at the time etc.

Do I legally have to pay this or is this error theirs and they are accountable for it. Our mortgage lender sent them the same details as we had, this clearly shows the amount to be loaned and the arrangement fee to be added to the mortgage (this is the 900.00 they have used in their figures incorrectly) seems like they did not read it though correctly.

Just need some advice where I stand as I don’t have the full amount to hand if I need to pay it straight away. They have not made any demands as of yet.

Thank you for any advice you can offer

kingstreet

Did the lender add the fee to the mortgage, or did it deduct it instead?

What you have read may not be what actually happened and you need to check with your lender.

Some lenders only add fees as long as the total does not take you into a new loan to value band.

ie a lender offering a 90% mortgage may not be prepared to add the arrangement fee to the loan if the loan then exceeded 90%. They may be more than happy to add it as long as the total remains under 90%.

If the fee was deducted, you would have been required to make up the difference and the fact your solicitor misinterpreted the offer letter doesn't absolve you of the responsibility for paying what you (may) owe.

Check what amount was actually sent to solicitor by lender.

pinkshoes

If the £900 hasn't been added on to the mortgage, you will need to either pay it in cash, or get it added on, and perhaps insist that the solicitor foots any admin fees for this, given it was their mistake. I'm assuming here that you had it in writing that the £900 was to be added to the mortgage...

DVardysShadow

It looks to me like the solicitor drew down your loan amount less mortgage lenders fees, rather than the exact loan amount intended. So you mortgage is now for the exact amount which you needed to borrow for the purchase, rather than for £900 more.

If the above is not the case, you need to understand exactly how the discrepancy arose and deal with it accordingly. But if it is the case, then the right solution IMO, is for the solicitor to draw down the extra £900 from the mortgage, paying any fees themselves.

cattie

Ask yourself if the solicitor had made a mistake in their favour & owed you money, would you be happy for them to think you should just wave goodbye to it, since completion has happened & you hadn't realised the error beforehand?

Not an occurrance as unlikely as you might think, as I received a cheque from my solicitor a couple of months after completion on this house as they had realised an error in their completion statement, that I hadn't picked up on. Honesty is something we all like when we are the beneficiary of it, but sadly it isn't always a 2 way thing.

Morglum

Thank you for the prompt response.

Our LTV was 85%. The arrangment fee was 900.00 GBP.
It clearly shows in the details from the lender sent to the solicitor that the mortgage (not sure if allowed to quote figures etc) was X amount and the above fee was to be added to the mortgage figure.
The amount to borrow was very clear and did not include the arrangment fee.

So the final completion statement from the solicitor has worked out the figures from the mortgage fee + the arrangment fee of 900.00 GBP as the amount to be lent.
This is where they are short 900.00 GBP from the final figure they gave us to complete. Only after have they worked out that the loan was for X amount and not this amount + the 900.00 GBP

Hope that makes more sense.

DVardysShadow

Morglum wrote: »

Thank you for the prompt response.

Our LTV was 85%.The arrangment fee was 900.00 GBP.

• It clearly shows in the details from the lender sent to the solicitor that the mortgage (not sure if allowed to quote figures etc) was X amount and the above fee was to be added to the mortgage figure.
  

• The amount to borrow was very clear and did not include the arrangment fee.

So the final completion statement from the solicitor has worked out the figures from the mortgage fee + the arrangment fee of 900.00 GBP as the amount to be lent.
This is where they are short 900.00 GBP from the final figure they gave us to complete. Only after have they worked out that the loan was for X amount and not this amount + the 900.00 GBP

Hope that makes more sense.

The 2 statements are in conflict. Either you are borrowing the arrangement fee or you are not. You need to sort out this question

If you have borrowed the arrangement fee, then the solicitor needs to draw down the agreed loan minus £900. If you have not borrowed it, then the solicitor needs to draw down the entire loan and you need to pay the £900 to the lender.

TrickyDicky101

I think what the op means is that the solicitor made a mistake in their sums and has returned £900 too much.no mistake has been made in regards to drawing too little our too much from the lender.

If this is the case it seems fair to repay the solicitor over an agreed period, not necessarily all in one go.

kingstreet

I agree with TD.

Looking at the OP's clarification, it appears the solicitor has read the gross mortgage advance figure and carried that over into the completion statement as the net amount.

As a consequence, the solicitor has requested £900 less from the OP and has effectively paid part of the OP's deposit for them.

I can honestly say if I'd been asked for £900 less than I was expecting as I exchanged contracts, I'd have asked the solicitor to check the figures. The OP has had the use of this money for a few months, but now is the time to pay it back, or at least to make an arrangement to pay.