Breach of Contract

moneyistooshorttomention

GDB2222 wrote: »

"I know my own EA (when I sold last house) demanded proof of income/where deposit was going to come from/etc." Perhaps I am cynical, but this was probably so your EA could introduce your buyer to an IFA and get a kick-back.

Yep...I know that sort of thing goes on.

But I don't think my EA did that sort of thing and, in the event, told me which (well-known) building society my buyer was with. That, in the event, was exactly the building society I would have chosen myself in their position (as they had a good deal going then). As for the legal person used by my buyer - I had my EA on the phone asking if I'd ever heard of such-and-such conveyancing firm (as they certainly hadnt) and we both googled to find out who they were and established separately that they "would do".

EDIT; Just done a quick check on the terms of my last EA. My memory was correct - they don't charge anything if the sale doesnt go through (even if it's down to the vendor just changing their mind). A bit risky for them one might think - but I don't think so somehow as they're steadily getting bigger and better-known and I've watched them growing since I used them and then steadily watched an outcrop of their "for sale" boards going up in my last area.

GDB2222

Miss_Samantha wrote: »

He would only be responsible for your loss.

However, your loss may include what you have to pay to compensate for the loss of the person up the chain (the person you are buying from), and so on.

Note that this is not in addition to his deposit (if he does lose it): For example if you lose 5k but got his 10k deposit then the deposit covers your loss.

The trouble is that the way most chains work is that the most expensive house is at the top of the chain. So, the deposits increase going up the chain, and the OP's vendor will automatically have lost more than the OP's deposit.

Hopefully, the FTB will get his mortgage and this mess will sort itself out, and the only financial losses will be a bit of interest and some extra removal costs. The upset must be pretty terrible for all concerned.

Mrs36

I'm so sorry this has happened to you OP, it must be devastating. You've had some great advice here.
This is one of my biggest fears in buying/selling houses and part of the reason I've never understood why Fridays are the general completion date, as when it does go wrong it just leaves everyone hanging all weekend, it must be intolerable.

I hope today brings some clarity, if nothing else.

DaftyDuck

It's this increasing loss up the chain (not always so, but common) that means the OP should not be relying on a conveyancer who has no experience of this; it's time to find someone who understands the ramifications, and can act quickly to mitigate any loss.

It's worth realising that their own conveyancer might be partially at fault, so may have a less-than-balanced approach to following this through. Did they actually secure a deposit, how much, and is it secured via the buyers solicitor correctly? Too late to fret on that now, but the conveyancer might be partially liable.

The most likely outcome is (and I'm sure we all hope) that the minor mortgage glitch is sorted by lunchtime, and all progresses reasonably smoothly from now. However, there is a minute chance this could spiral into a catastrophic loss for the OP. It's for this reason I think they need to get additional advice immediately, from a bricks-and-mortar nearby solicitor who has met this problem and understands it. Doesn't mean dumping their conveyancer - indeed, don't do so!

The problem is exacerbated by being at the bottom of the chain, with a buyer who may well have no further assets, so there are no funds additional to the deposit to chase. Under those circumstances, it's imperative that a solicitor act to minimise any further loss.

Irrespective of whether the OP's solicitor has dealt with this scenario before, they surely ought to be able to answer their basic questions about the process. Otherwise what's the point of engaging them to negotiate and advise on the contract?!

Well, a conveyancer conveys... but does little else. If the money isn't there to complete, they'll be utterly at a loss to act; they may not even be legally qualified to act. In fact, they often seem at a complete loss when the buying/selling process throws up a minor glitch. This is (potentially) not minor, and needs an experienced hand to advise.

GDB2222

Has the OP said that their solicitor is unfamiliar with this process? If not, why is it being raised?

davidmcn

GDB2222 wrote: »

Has the OP said that their solicitor is unfamiliar with this process? If not, why is it being raised?

From the OP:

Does anyone know where we stand ?
Do we get our expenses back?
What happens to our buyers deposit?
Will our building society charge us an erc as our funds will be returned to them?

Sorry for all the questions but our Estate Agent and conveyancer have never had this happen after exchange.

which suggests that their conveyancer couldn't answer those questions.

eddddy

moneyistooshorttomention wrote: »

EDIT; Just done a quick check on the terms of my last EA. My memory was correct - they don't charge anything if the sale doesnt go through (even if it's down to the vendor just changing their mind).

I think you've misunderstood your EA's contract

Many EAs (including perhaps yours) don't charge a fee if the buyer changes their mind before they exchange contracts.

But if the buyer exchanges contracts, as in this case, the fee will be payable.

(In your contract, look for a term that says something like: "Except for any previously agreed additional costs, commission fees will become due on exchange of contracts")

G_M

The last sale I did I had the EA contract amended such that their fee was only payable if a sale Completed.

This was a negotiated term. Whether any EAs ever use that within their standard terms I don't know.

But for the OP, the answer will be in his contract.

martindow

Sometimes a 10% deposit of the person at the bottom of the chain is just passed up and used as each persons deposit even though is is less than 10% of higher prices. If this is so in the OP's case that would be a good thing.

GDB2222

martindow wrote: »

Sometimes a 10% deposit of the person at the bottom of the chain is just passed up and used as each persons deposit even though is is less than 10% of higher prices. If this is so in the OP's case that would be a good thing.

That is absolutely the normal process in chains. I can't see how it helps, though.