Charge on property discovered on moving day

The_Earl_of_Streatham

I'm hoping someone can advise on a situaution that my brother and his partner find themselves in.

They are buying for cash a house funded by the sale of one of their houses and savings.

They exchanged contracts on Wednesday 30th and were due to complete and move in the following day (yes, I appreciate this was rash but he's my brother, I'm not his keeper!).

On moving day their solicitor informed them that when trying to register the change of ownership it was discovered that somebody has a charge on the property, believed to be an ex-partner of the seller. The solicitor stopped the sale and is presently holding the money pending an outcome.

The solicitor has informed them that this charge expires in July. I have obtained the Land Registry title for the property and see only the mortgage company listed as a charge.

My questions; should the solicitor have been expected to know about a charge against the property at the point of exchange and do solicitors have privilaged access that would reveal a charge that my four quid to the land registry might not? Anything else anyone can offer would be most welcome too.

Thank you in advance.

DPJames

The solicitor really should have known about this, and flagged it up a lot earlier in the process. But what you can do about it now, I don't know.

Flat_Eric

The_Earl_of_Streatham wrote: »

I'm hoping someone can advise on a situaution that my brother and his partner find themselves in.

They are buying for cash a house funded by the sale of one of their houses and savings.

They exchanged contracts on Wednesday 30th and were due to complete and move in the following day (yes, I appreciate this was rash but he's my brother, I'm not his keeper!).

On moving day their solicitor informed them that when trying to register the change of ownership it was discovered that somebody has a charge on the property, believed to be an ex-partner of the seller. The solicitor stopped the sale and is presently holding the money pending an outcome.

The solicitor has informed them that this charge expires in July. I have obtained the Land Registry title for the property and see only the mortgage company listed as a charge.

My questions; should the solicitor have been expected to know about a charge against the property at the point of exchange and do solicitors have privilaged access that would reveal a charge that my four quid to the land registry might not? Anything else anyone can offer would be most welcome too.

Thank you in advance.

I agree with the other poster. I hope it gets sorted out. Is is your brother's solicitors that is holding the monies for him ?? or have they already been passed to the seller's solicitors - and he/she is holding them until the charge has been removed?

Do you/your brother know when this charge got registered against the Title ??

G_M

Your solicitor has been negligent. He should have
a) known about the charge well before Exchanging contracts and
b) made sure that a condition of the contract was that the charge would be lifted, either before Completion or (with a solicitor's 'undertaking') after.

I would guess you have a case for charging your solicitor with any costs you incur. So if you are homeless, and move into a hotel, send him the bill.

In the first instance, raise this via the firm's Senior Partner, or via their complaints procedure.

If you get nowhere, either
1) get advive from another solicitor or
2) complain to the Legal Ombudsman on 0300 555 0333.

The_Earl_of_Streatham

Flat Eric, thanks for the response. My brother's solicitor is holding the money. It was not passed to the seller because the charge was discovred. We don't know for certain when the charge was registered.

I'm relieved that replies are confirming my view that the solicitor should have known about this. I gather their response when challenged about not looking after their clients interests is that they have done exactly this by retaining the money.

Gonzo33

I would be interested to know why it does not show on Land Reg. Any charges should be lodged with Land Reg.

DVardysShadow

The_Earl_of_Streatham wrote: »

.... I'm relieved that replies are confirming my view that the solicitor should have known about this. I gather their response when challenged about not looking after their clients interests is that they have done exactly this by retaining the money.

They protected his money. They did not protect him from inconvenience and all the consequences which arise from moving out of wherever they were.

Negligent is my word for it, particularly if you can see the problem with a £4 Land Reg search.

The_Earl_of_Streatham

DVardysShadow wrote: »

Negligent is my word for it, particularly if you can see the problem with a £4 Land Reg search.

Gonzo33 wrote: »

I would be interested to know why it does not show on Land Reg. Any charges should be lodged with Land Reg.

Thanks for the replies The problem is that the land registry search shows nothing, except a bank, presumably the mortgage; interesting indeed.

silvercar

The_Earl_of_Streatham wrote: »

Thanks for the replies The problem is that the land registry search shows nothing, except a bank, presumably the mortgage; interesting indeed.

Sounds like a non-registered signed agreement between the two parties. Your solicitor would only know about it when the seller's solicitor told him.

Option B would be to exchange now, complete in July and rent the property until you complete.

kingstreet

This is a charge on the property to be purchased, not on the property the brother is selling?

All the vendor's solicitor has to do is obtain a settlement figure for the charge and ensure the purchase monies are sufficient to enable all charges to be fully repaid.

If exchange has already taken place, the vendor faces breach of contract issues.

What is the position with the brother's sale? Did he complete? Where is he currently residing?

The_Earl_of_Streatham

Kingstreet, thanks for the reply.
The charge is on the house being purchased. Exchange has already taken place.

The purchase is being funded by the sale of my brother's partner's house and savings, which will be replenished from the sale of my brother's house which is still in progress. That's the house they've moved back into, so they do have a roof over their heads.