Conveyancers liability on Equitable charge

Jose_Iborra

My wife and I bought our first property in March 2016 (completion) using Legal&General PPL for the conveyancing. When renegotiating our mortgage with a different lender last month, we discovered that there is an equitable charge on the property, created by an interim charging order of a county court in favour of Nationwide in November 2015. Because of this, the remortgage negotiations have been put on hold until this charge is removed.

The charge appears in the land registry documents that we received in January 2017 after completion, but we failed to notice it. Our conveyancers failed to mention it to us, and presumably also to the original lender. If we had known about the charge we would not have gone ahead with the purchase; and if they had at least mentioned it after the purchase, we would have sought removing it before the mortgage fixed period had ended. We raised this with them 4 weeks ago but they are stalling, waiting for the seller's solicitors to track down the seller. Unfortunately the seller is long ago gone to Colombia, the 2 year fixed period of our mortgage is about to expire, and that means that the mortgage interest rates will go up from 2% to 4.5%. We will be losing money in monthly premiums until the charge is lifted and we can remortgage.

What are the legal obligations of the conveyancers to us and to the original lender in this matter, and How can we apply pressure on them to resolve this asap, preferably without going to court ?

Any advice very much appreciated.

TBagpuss

When was the charge registered? You say that it was on the paperwork in January 2017 but what is relevant was when it was first registered.

The conveyancers would normally do a search in the run up to completion to check what is registered. Where liability falls will depend on when the charge was registered, and what searches were done.

Flat_Eric

Yes, please advise what your completion date was i.e when you got the keys.

Jose_Iborra

Good question. I went back to review all the paperwork and it turns out that the charge was registered after the conveyancers first check. This is the timeline:
- The conveyancers checked the title in the Land Registry on the 3rd of November 2015. The charge was not there yet.
- The charge was registered on the 11th of November
- The property was exchanged in March 2016, i.e. we got the keys.
- We received a letter of completion from our conveyancers on 31 Jan 2017, with a land registry title dated Jun 2016.

Richard_Webster

Seller's conveyancers supplied a copy of Land Registry entries dated 3rd November 2015.

Just before completion buyer's conveyancers should have carried out a Land Registry Search asking in effect if anything had happened since 3rd November.

The equitable charge should have been revealed on such search.

Buyer's conveyancers should have required this charge to be discharged on completion. They should have got an undertaking from the seller's conveyancers to do this. If they did not require this then the buyer's conveyancers were negligent and their PI insurers will have to find the money to pay off the charge.

If they did get an undertaking from the seller's conveyancers and they did not comply with it then they are liable. Also, failure to comply with a professional undertaking results in disciplinary proceedings.

If it is the buyer's conveyancer's fault they will being careful not to say too much as they can't admit liability - they have to allow their PI insurers to negotiate on their behalf.

Jose_Iborra

Thank you Richard for your detailed response !

Our solicitors have told us that they didn't know about the charge, and that they are in touch with the seller solicitors trying to contact the previous owner.

Based on that, it seems that our solicitors failed to carry out the search just before completion and therefore missed the charge. I don't understand what they expect to obtain from the previous owner, as even if they manage to track him down, the charge is no longer his problem.

On our side this is a time sensitive issue, because of the increased mortgage premiums, so any advice on how to apply pressure on our solicitors will be very appreciated.