Move from hell, purchasers failed to complete HELP!

Jhoney_2

franklee wrote: »

My understanding is that there is one deposit passed up the chain, possibly the amount gets topped up along the way but the deposit passed up is commonplace. The same money can't remain with buyer 3 and be returned to buyer 1. If every link in the chain paid their own deposits separately in cash then I'd agree with you but usually they do not, they rely on the deposit being passed up the chain.

A charging order would depend on there being enough equity in the property as the mortgage lender gets paid first. My point was if the amount after sale of the property isn't enough after the mortgage lender, tax man and professional fees have been paid. Simply having ownership of a property doesn't mean you can afford to pay all the costs, even after a sale, especially in the days when remortgaging to take money out or indeed house price falls can occur. Of course the person with a charge can wait many years until prices rise enough but that's not much comfort when being sued by someone up the chain in the present day.

B1's deposit is with his solicitor and upon exchange belongs to B2 (his vendor and goes to his solicitor on exchange or just before completion) and it's in the "pay to my vendor pot -notionally or otherwise". B2 does the same with B3.
All in the chain are required to provide a (usually 10%) for exchange- presumably not the end of the chain but that may well be the case. Most do it from savings etc so I am struggling with the top up scenario as else everyone up the chain has much less to lose by breaking the contract. It cannot be the same money imo, each solictor would contact the one up the chain and say, we have funds and the signed docs, you can go ahead and do the same.

As I stated in a previous post :

The system works well enough (albeit way too slow due to time to retrieve searches etc which is not the fault of the conveyancer), it's the people involved that can make or break it's successful execution.

Getting money back under any system would have the same issues of affordability, delay and restitution. That risk also applies to mortgage lenders, loan companies etc as per many a MSE post so nothing new there.

silvercar

Deposits are passed up the chain, but only in the sense of money changing hands and remaining with the vendor's solicitor.

Everyone is responsible for the deposit they have paid, but it is commpn practice for the buyer to allow their vendor to use their deposit as part of the deposit going along the chain.

So A pays B £3,000, B pays C the £3,000 received from A plus B's own £2,000 giving C £5,000,....

Each vendor is considered to have received their deposit from their immediate buyer in full, even though in practise some of that money is coming from another deposit.

Jhoney_2

silvercar wrote: »

Deposits are passed up the chain, but only in the sense of money changing hands and remaining with the vendor's solicitor.

Everyone is responsible for the deposit they have paid, but it is commpn practice for the buyer to allow their vendor to use their deposit as part of the deposit going along the chain.

So A pays B £3,000, B pays C the £3,000 received from A plus B's own £2,000 giving C £5,000,....

Each vendor is considered to have received their deposit from their immediate buyer in full, even though in practise some of that money is coming from another deposit.

Thanks for making it much clearer than I was able to SC, but that is what I was trying to say:)

ruggedtoast

House buying and selling in England is so horrible.

franklee

Jhoney wrote: »

Thanks for making it much clearer than I was able to SC, but that is what I was trying to say:)

It shows your earlier comment that A's deposit is with the solicitor and therefore obliged to be returned isn't that straightforward. It can't be returned by the solicitor as it has all gone to C. It confirms my point that there isn't enough ready cash in the chain to give A his money back if B defaults on sale and purchase which is the example we were discussing:

C keeps the £5,000. But £3,000 of that was originally A's. So A is out of pocket by £3,000. A has to go to court to force the sale or sue for his money back - assuming B can pay. Meanwhile C may be suing B was well if the £5,000 he got wasn't enough.

Admitted B would have to be in serious and unexpected difficulty to do that or perhaps to have acted recklessly.

Jhoney_2

franklee wrote: »

It shows your earlier comment that A's deposit is with the solicitor and therefore obliged to be returned isn't that straightforward. It can't be returned by the solicitor as it has all gone to C. Not in my opinion. Assuming they all put the required 10% deposit in at exchange as is usual, B would thus have 3K of own money for his 5K deposit to C with his solicitor.

It confirms my point that there isn't enough ready cash in the chain to give A his money back if B defaults on sale and purchase which is the example we were discussing:

I disagree that this would be the case.

C keeps the £5,000. Yes But £3,000 of that was originally A's. In theory yes, So A is out of pocket by £3,000. Yes A has to go to court to force the sale or sue for his deposit money back - assuming B can pay I don't think so. Meanwhile C may be suing B was well if the £5,000 he got wasn't enough.Yes.

Admitted B would have to be in serious and unexpected difficulty to do that or perhaps to have acted recklessly.

I think i'll wait to hear Silvercar's view on that because as he points out in his first paragraph - it is at that point with either B or C's solicitor? So my expectation is that the relevant conveyancing professional holding the 3k would pass it back down the chain to A or in OP's situation back to OP's buyers solicitor to whom it legally or at least contractually belongs? They can't just hang on to it because someone else is going to sue them and may need it.

We will obviously wait to hear from OP if he wishes to discuss further, but as in the one of the threads I linked to, he got his damages and the deposit on top so how did that work? I dont remember offhand.

Appreciating your views on this btw

franklee

Jhoney wrote: »

So my expectation is that the relevant conveyancing professional holding the 3k would pass it back down the chain to A

In that case C wouldn't keep the 3K. Yet it's supposed to be part of the deposit to protect C if B defaults. In a nutshell that 3K doesn't exist twice so only one person can have it.

At least the example is very unlikely to happen. People in chains who default probably do it on one side of the transaction, purchase or sale, and not both. Not sure if they'd default on both if say they die and their estate takes a while to raise any IHT and settle.

Jhoney_2

franklee wrote: »

In that case C wouldn't keep the 3K. Yet it's supposed to be part of the deposit to protect C if B defaults. In a nutshell that 3K doesn't exist twice so only one person can have it.

At least the example is very unlikely to happen. People in chains who default probably do it on one side of the transaction, purchase or sale, and not both. Not sure if they'd default on both if say they die and their estate takes a while to raise any IHT and settle.

But in reality at that initial stage, wouldn't B's solicitor have 8K at his disposal. so A's 3K(10%) and the 5k he moved up the chain for purchase of property C (buying deposit @ 10%)? I appreciate that little money may move around in practice, but if as the deposit suggests, we should all be able to complete independent of others in the chain , bs solictor would have taken 10% (e.g 5K) from him too wether passed up the chain or not and that's where I am of the opinion that there is 2 lots of money, some rightly returned to A and 5k that is his own?

It is a minefield without doubt but thankfully, OP has a very good chance of getting his money repaid in full with costs as set out in the contract and I for one will be very happy to learn that it does. Naturally, noone would have wished OP to go through this experience in the first place and that would have been preferable.

Crashy_Time

Jack_Johnson_the_acorn wrote: »

Nah, It's because you're incapable of clicking 1 button correctly. :money:

Spell it out please, because it seems to happen a lot, to other posters as well.

Megamonty

Bit of an update, the Solicitor at the bottom sent a bit of a snotty e-mail saying that they "still had to consult their client over paying any damages". He also said that we should not be claiming for any food, a hair dryer, and an extension lead to use it with (so it would reach the only mirror left in the house!!).

Just wish you could claim for stress and misery!, complaint to the law society now imminent as he really should have checked that they had the position to complete. They boast on their website of being conveyancing experts, "in what I don't know".