Failed to complete - Penalty Issued - Help needed with some advice

NETACCT

Hi All,

1. Housing group had a single contract to sell all the flats (76 in total) to an Investment Company.
2. I had an agreement to buy a flat from the Investment Company.
3. Its Sub-Sale structure
4. My solicitor is not on the banks short list panel. So there is another solicitor involved from bank's side
5. Completion date was 11 Jan 2017
6. As per the contract between Housing Group and Investment company, completion of all the flats must happen on same day (11 Jan 2017)
7. Bank's solicitor did not finish their inquiries even as of today and they are still continuing it with my solicitor
8. As the inquiries are still continuing, funds were not released on time
9. I missed the completion date and failed to complete
10. As per the contract between Investment Company and Housing group, Investment Company completed the sale of my flat in their name
11. Investment company will now transfer the lease on my name but there are demanding penalties for failed completion and costs to them. Around £19K
12. Mortgage situation is still unclear and I believe, it will be now invalid as the transaction will be back to back sale

I have only two options now,

1. Loos all the deposit and be liable for future loss
2. Complete the sale in cash (which I can't manage as of now) and plus pay the penalties, around £19K

I really don't know what to do in the current situation?

Whose fault it is?

My solicitor or bank's solicitor? and how to prove it?

Any help or guidance will be really highly appreciated

Thanks & Regards

Thrugelmir

Why did you agree to exchange contracts without the mortgage funding being in place?

Lenders solicitor cannot be responsible for something over which they had no control.

Your solicitor must have warned you of the consequences of doing so. As they too had no control over events and the time it would take to resolve them.

davidmcn

It sounds like it's your fault for exchanging without making sure your funding was in place.

NETACCT

Mortgage was approved and offer letter issued and received on 22 Oct 2016.

Bank's solicitor had min 50 working days to complete the legal inquiries.

glosoli

I don't have anything of value to add however it just goes to demonstrate why you should use a solicitor that is on the lenders approved panel, essentially your solicitor must report to your banks solicitor (who is likely to operate like a chicken battery farm), which turns what should be a 6-8 process into a much longer process. I don't know why people do it to be honest. I feel like in this particular case this decision has cost you a lot of money.

NETACCT

Its new build flat and its common to use the solicitor recommended by the seller.
damage is already done and lots of things are at stake...
Past is past and nothing can be done about it.

I am looking for some practical advice if it can help to some extent?

Marvel1

NETACCT wrote: »

Whose fault it is?

My solicitor or bank's solicitor? and how to prove it?

I would have to say yourself for agreeing to the dates, enquires take time.

glosoli

If any of the other 75 flats also used their recommended their solicitor, in my experience of the timescales associated with second representation, you won't be the only one in this boat.

FBaby

7. Bank's solicitor did not finish their inquiries even as of today and they are still continuing it with my solicitor

Which inquiries are they? Related to the mortgage? Are you saying that they approved but then retracted as they discovered something that requires more inquiry? Is it something they would claim you should have declared? Was the letter of approval subjects to conditions?

anselld

NETACCT wrote: »

Mortgage was approved and offer letter issued and received on 22 Oct 2016.

Bank's solicitor had min 50 working days to complete the legal inquiries.

That has nothing to do with exchange of contracts. You should not have exchanged until all legal enquiries were complete and your Solicitor should have advised you of that.

Pixie5740

NETACCT wrote: »

Its new build flat and its common to use the solicitor recommended by the seller.

No it's really not. It's far more common to use a solicitor on your lender's panel. In your shoes I'd be wanting to know why your solicitor allowed you to exchange before your lender's solicitor had finished doing his side of things.