Incorrect Redemption Figure

Obsoletepaul

Hello all, first time posting.
Several years ago, I purchased my first home on an equity scheme. I owned 75% and the remaining 25% owned by the equity scheme supplier. Upon the sale of the property, the equity supplier dealt with my solicitor as stipulated by them. I instructed my solicitor based on the above facts and paid them extra to deal with the redemption - I also advised them via email of the 75/25%. Upon completion, I expected a considerable sum of residual funds so that extensive works could be conducted at my new property. Upon moving in (on completion) I began to pay for and instruct that works be done - in excess of £20K (Kitchen, Bathroom, Windows - etc.).


Three weeks after completion, I received a letter from my solicitor stating that the redemption figure provided by the equity scheme supplier was wrong - considerably wrong. My solicitor contacted the scheme and they advised that they had made a mistake but the monies is required to be paid to release the charge on the property (my old property).


Unfortunately, I spent the monies in good faith based on the fact my solicitor was handling the matter. I do have some of the proceeds of the sale left - but certainly not all of it.


My solicitor and the equity supplier have reached a stalemate. The equity supplier wants the full monies, my solicitor wants them to remove the charge and I don't have all of the funds available to me. The equity scheme are blaming my solicitor and my solicitor is blaming the equity scheme.


My questions:

• Does it matter to me that a charge exists on a property I no longer own?
• Is my position fair? i.e I spent some of the monies in good faith.
• What happens if I can't pay off the full balance?
• What should my solicitor do?
• What happens if the charge stays on my old property and the debt increases due to interest?

I also received a threatening phone call from the equity scheme in which I explained the above and they advised me that the charge is accruing interest at £130.00 a month!!!


I feel utterly lost.


Thank you in advance.

silvercar

Does it matter to me that a charge exists on a property I no longer own?

Your contract of sale between you and the new buyer would require you to give the property to the new owner with clear title. So your legal obligation is to ensure all charges are removed.

Your solicitors may have given a legal undertaking to the buyer's solicitor that they would ensure this happened.

If the charge isn't removed, expect your buyer's solicitor to be unhappy to say the least.

With fault being thrown around a compromise may be that the equity holder put a charge on your new property and you pay that off in stages. This would require their agreement.

Obsoletepaul

silvercar wrote: »

Your contract of sale between you and the new buyer would require you to give the property to the new owner with clear title. So your legal obligation is to ensure all charges are removed.

When you say 'your' legal obligation - surely this is my SOLICITORS legal obligation? They dealt with the sale from start to finish, that's what I paid them for...

TrickyDicky101

Obsoletepaul wrote: »

When you say 'your' legal obligation - surely this is my SOLICITORS legal obligation? They dealt with the sale from start to finish, that's what I paid them for...

They are your agents - so they act in your stead but it is still your legal obligation on which they act.

You may well have recourse to complain (and possibly receive compensation from) to your solicitors about this, but don't exepct to get the full £20k or whatever outstanding written off - you still owe this money.

davidmcn

Obsoletepaul wrote: »

When you say 'your' legal obligation - surely this is my SOLICITORS legal obligation?

No. It's your contract. You signed it.

That's separate from the possibility that you might have recourse to your solicitors, but from what you've told us I'm not sure why you would.

DragonQ

If you owe the money, you owe the money, but I can't see how the can expect you to just cough it up given that the equity scheme supplier was the one that made the mistake (if I've understood your post correctly). Some kind of repayment scheme will have to be set up, surely? Under the circumstances I'd demand 0% APR over a period of time where you'd feel comfortable paying whatever is owed, but it's hard to understand exactly what happened and when from your post.

Obsoletepaul

DragonQ wrote: »

If you owe the money, you owe the money, but I can't see how the can expect you to just cough it up given that the equity scheme supplier was the one that made the mistake (if I've understood your post correctly). Some kind of repayment scheme will have to be set up, surely? Under the circumstances I'd demand 0% APR over a period of time where you'd feel comfortable paying whatever is owed, but it's hard to understand exactly what happened and when from your post.

Yes, the equity supplier gave the wrong redemption figure to my solicitor via letter. My solicitor then 'redeemed' the loan based on this figure and the property completed. 3 weeks later, my solicitor received notice from the equity scheme that they had made a mistake. My solicitor had the opportunity to notice the error based on my initial instruction but failed to do so.


I've made a £10K without prejudice offer and instructed the solicitor to make this on my behalf. This wouldn't discharge the whole balance but it's all we have left.


I have since researched a defence of 'Unjust Enrichment' - Change of Position


I have changed my position based on the facts presented to me and disposed of funds in good faith. I have later been told a mistake happened which meant that I wasn't entitled to these monies. However, to expect all the monies back would prejudice me as I acted in good faith. I think the 3 week delay really didn't help - it's surprising how much and how fast you can spend when renovating a property.

davidmcn

You haven't given us the figures, but I think the question arises of whether or not you ought to have noticed that the figure was probably wrong.

Obsoletepaul

davidmcn wrote: »

You haven't given us the figures, but I think the question arises of whether or not you ought to have noticed that the figure was probably wrong.

The property was sold and I was expecting a considerable sum anyway as the property I bought needed considerable works. As such, the figure provided to me upon completion I trusted as correct, especially considering the transaction was handled by my solicitor. I suppose it begs the question, why employ a solicitor to conduct conveyancing if I'm also expected to check that they've got the figures right?

kingstreet

Presumably the amount due wasn't 25% of the selling price?

davidmcn

Obsoletepaul wrote: »

the figure provided to me upon completion I trusted as correct, especially considering the transaction was handled by my solicitor. I suppose it begs the question, why employ a solicitor to conduct conveyancing if I'm also expected to check that they've got the figures right?

Normally the client will have a better idea than the solicitor of whether the third party's statement is correct or not. Maybe that's not the case here but we can't tell that from what you've said.

If I sold my property, I know (roughly) how much I think is due under my mortgage, but my solicitor wouldn't have a clue, so if my redemption statement said £20,000 rather than £200,000 she'd be entitled to believe the bank and let me have the windfall.