Solicitors holding house deposit funds - secure?

davidmcn

In any event, if we're talking about the loan funds then until completion it's the lender's money, not yours. I'm surprised they are advancing it so early as usually they don't want money to be lying around longer than necessary before they get a registered security.

Pugster

davidmcn wrote: »

In any event, if we're talking about the loan funds then until completion it's the lender's money, not yours. I'm surprised they are advancing it so early as usually they don't want money to be lying around longer than necessary before they get a registered security.

The loan funds are from re-mortgaging our existing property (let-to-buy) which we are using to purchase a 2nd property. The option was to either transfer the funds to our bank account or a solicitor.

Effectively I think they are now our funds (it is secured on our existing property), but I could be wrong.

Perhaps as this is a Let-to-buy situation (the remortgage from property A being the deposit for property is the reason for the earlier transfer.

davidmcn

Pugster wrote: »

The loan funds are from re-mortgaging our existing property (let-to-buy) which we are using to purchase a 2nd property. The option was to either transfer the funds to our bank account or a solicitor.

Effectively I think they are now our funds (it is secured on our existing property), but I could be wrong.

Perhaps as this is a Let-to-buy situation (the remortgage from property A being the deposit for property is the reason for the earlier transfer.

Yes, it makes more sense now you explain what's going on! It is your money then.

princeofpounds

As pointed out, the money legally has to be in a client account, and so will be safe from the solicitor going bust, if so.


Then, if the solicitor is naughty and doesn't put it in a client account, the SRA (regulator) has a compensation fund that, in normal circumstances, will reimburse clients.


The only time I can ever recall people getting caught out is if they send money to someone who isn't actually a solicitor. There is a scam where people pretend to be solicitors, and give many similar details to a regulated solicitor, but are actually fake. I can't remember the specific details of how it works, and I think it's really rare.

alchemist.1

Pugster wrote: »

Yes that is a pretty good point. It is early and will cost. We did have to redeem an existing mortgage with our current provider to get this mortgage, so I don't know if that's why they did it early.

It's not very money saving I know, but I'm not too concerned with the interest. There is a good chance the chain would collapse if we don't exchange next week. This will cost us much more than the interest on the mortgage.

Cheers all for your super fast responses. I really do appreciate it. (p.s you know where I'll be posting when the solicitor runs off with the cash!)

Dont worry you have the Solicitors Indemnity Fund.

chris_m

princeofpounds wrote: »

The only time I can ever recall people getting caught out is if they send money to someone who isn't actually a solicitor. There is a scam where people pretend to be solicitors, and give many similar details to a regulated solicitor, but are actually fake. I can't remember the specific details of how it works, and I think it's really rare.

There have been some cases where emails have been intercepted and scammers have sent an email to the client, purporting to be the solicitor and requesting that, due to some plausible reason, payment is sent to a different bank account.
Not particularly common though.