Can a conveyancing solicitor refuse to give advice about Right to Buy?

Mokka

My solicitor, who is also acting for the mortgage company, and who knows I will be seeking to recover this money, should advise me about this. I must say this issue does worry me a bit, with the solicitor not giving me any useful advice on any matter (you should see his pathetic report, I could have a written better one).
I had a brief discussion with the mortgage company several months ago when I assumed that I will be given the rent refund due to delays with the sale (it's now over 9 months of entitlement to the refund) and they did not seem overly concerned, as the price would come down.

Should we succeed in getting this money later, we can negotiate with the landlord to use it as a payment for major works bill. In any case our current mortgage offer allows unlimited overpayments without penalties.

If we lose this mortgage offer we will have to apply for a higher interest one. The increase in costs of repayment would be comparable to the amount we are seeking to recover, if not higher.

That's why I do not think it is reasonable for us not to sign the contract, if we can go ahead with the purchase. Courts always look at the reasonableness of each party's behaviour.

Of course if the landlord in any way causes this sale to fall through, the of course we will not have any choice other than litigation.

sydenhambased

Why do you think you'll have to borrow at a higher interest rate if you apply for a new mortgage?

I ask as I suspected we were in the same predicament when we pulled out of an offer and offered on a new property a couple of months back.

We went through a broker, and pre MMR were offered 3.64%. Offering on the new place (post MMR) we were told the rates had gone up to 3.89% - approx. £1500 extra over the 5 year fixed term (25 year mortgage but we'll switch after the fixed term). Broker "haggled" the rate back down.

A month or so later I look at Santander's rates and see the five year fix is back down to 3.64%.

Just because a rate's gone up doesn't mean it hasn't or won't go down again!

Mokka

sydenhambased wrote: »

Why do you think you'll have to borrow at a higher interest rate if you apply for a new mortgage?

Just because a rate's gone up doesn't mean it hasn't or won't go down again!

If I did have a choice, like a normal buyer, I would not have a problem.
Unfortunately RTB mortgages are a completely different kettle of fish. And RTB mortgages for concrete high rise are like black swans. Or white rhinos. Or gold dust. The two banks who potentially will accept such applications have higher rates (including my current one).
Also you cannot change a mortgage deal for 5 years (not with a landlord like mine anyway, who will not do anything to the tenants' advantage)

silvercar

My solicitor, who is also acting for the mortgage company, and who knows I will be seeking to recover this money, should advise me about this. I must say this issue does worry me a bit, with the solicitor not giving me any useful advice on any matter (you should see his pathetic report, I could have a written better one).

I suspect your solicitor feels that his work will be complete once the sale goes through, so he doesn't need to worry about it.

I think that if you get the lower price for the property before completion then you will need to declare it to the lender and it could consequently mean the mortgage application process has to be restarted and that could impact on the rate you get.

Nothing definite in this game, but getting the lower price now, could ironically mean that you end up with a more expensive mortgage. So pursuing this now may or may not cost you more in the long run.

Should we succeed in getting this money later, we can negotiate with the landlord to use it as a payment for major works bill. In any case our current mortgage offer allows unlimited overpayments without penalties.

All good.

Also you cannot change a mortgage deal for 5 years (not with a landlord like mine anyway, who will not do anything to the tenants' advantage)

For the benefit of anyone reading, to expand on this issue. The RTB discount is put as a charge on the property. So any sale made within 5 years kicks in a repayment of the discount. The way mortgages are legally structured means that changing lenders requires the owner of this charge (the Local Authority) to agree to a deed of postponement. Councils can be difficult and slow in dealing with this.

That's why I do not think it is reasonable for us not to sign the contract, if we can go ahead with the purchase. Courts always look at the reasonableness of each party's behaviour.

Of course if the landlord in any way causes this sale to fall through, the of course we will not have any choice other than litigation.

I am not convinced you would win. Let's look at a different argument and draw parallels.

I want an iphone 6 lets say. The cheapest way of getting it is to buy outright from Apple. Apple have a loan deal available, but they turn me down, I appeal they look at it again but still reject me; forcing me to buy through O2 that now charges more for the phone, but give me the credit. Can I now sue Apple for denying me the opportunity to buy at the lower price? No of course they can't. I didn't need to go elsewhere I could have borrowed elsewhere or I could have stuck with my old phone.

Same for you, you could have borrowed elsewhere - it is not the local authority's fault that mortgages are scarce for your type of property, you could have taken a higher loan elsewhere, or you could have stuck with what you had and continued renting.

A court is never going to let you blame the local authority for the mortgage market. The fact that you sign the contract knowing the issue is still outstanding won't go in your favour.

Greeneyes86

I'm trying to get a mortgage for rtb I high rise, any chance of knowing who you have a mortgage with? It would make a difference of whether I can buy my property or not. The offer is near to expiry so any information you can give would be invaluable. Thanks a lot in advance.

Mokka

Why do you say your offer is expiring? Have you been served Notices to Complete?

How long ago did your landlord issued Section 125 (offer) Notice?

Greeneyes86

Well the time to buy was 12 weeks, which have already gone. I'm now awaiting another letter from housing association which will give me 6 weeks, then another one should follow with another 6 weeks. But mortgage takes about 6 weeks to sort out, as I was told in HSBC. That is, if everything goes smoothly.
Natwest said they will consider giving me mortgage only to take my money for surveyor fees and now declined for property being on 10th floor of 16 floor building. I have told them this from the very beginning!! Why say you would consider then?? Very frustrating. Any advice is hugely welcome and appreciated

Greeneyes86

About 6 weeks is what housing association told me. So as soon as I receive next letter I'm on a limit of 6 weeks. Did you go through mortgage advisor or directly with bank?

Mokka

It is not that relevant what they have told you- what matters are the formal Notices. To compel the tenant to complete the landlord has to issue Section 140 Notice giving them 56 days to respond. If there are no disputed issues about the lease/paperwork the landlord can issue Section 141 Notice giving the tenant another 56 days to complete. After that you would have to re-apply for RTB all over again and have the new valuation. If you tell the landlord you would intend to do just that it might put them off serving these Notices to complete- a new application would mean doing all the work all over again. If you haven't received these formal notices do not stress- the clock only starts ticking after you've received them and you will have 112 days at least.

Our lender HSBC was direct access only so we could not use a broker. You can use a broker if you want to go with Santander.

If you want to make absolutely sure whether the bank would lend on high rise Google 'bank xxx lending criteria'. This will usually show a website for brokers. You can find our the eligibility criteria for yourself. You will find 99% of banks will say: 'will not lend on blocks of flats over 4/5 storeys high.' Some will have 'will not lend on ex Local Authority flats'.

Good luck with your application.

Mokka

silvercar wrote: »

... you could have borrowed elsewhere - it is not the local authority's fault that mortgages are scarce for your type of property, you could have taken a higher loan elsewhere, or you could have stuck with what you had and continued renting.
A court is never going to let you blame the local authority for the mortgage market. The fact that you sign the contract knowing the issue is still outstanding won't go in your favour.

Thanks for your responses silvercar. You seem to have tapped into all of my anxieties.
My argument would be that it is the LAs statutory duty to enable us to exercise our RTB and since they no longer offer mortgages themselves we have to rely on a mortgage to buy. By causing the loss of the mortgage they would have, in effect, deprived us of our Right to Buy, and would have failed in their statutory duty. The landlord had no good reason to behave the way they did and they were fully aware of the mortgage expiry date. My feeling was they would have had had time explaining why this was not misfeasance (or at least nonfeasance).

The good news is that we finally received legal advice from a barrister who suggested to write a letter that we are completing without prejudice and reserve the right to claim money due to us at a later date. Much simpler and more elegant than my rather hysterical letter about 'completing under duress'.

Even better news is that we have finally managed to complete. Without receiving the outstanding rent refund/discount, but still, at least we did not lose our mortgage offer.

Fingers crossed we will get somewhere with the Ombudsman.

Big thanks to everyone on this forum who supported us during this hellishly difficult process, which our landlord turned into a real nightmare. As if getting a mortgage wasn't hard enough!