Responsibility for establishing funds available before exchange

londonman42

I very much suspect that the solicitor acting for the man buying the house of the lady who is buying our flat only carried out very cursory checks on the man's funds available for purchase.  Her sale to him was agreed in October last year but it took until Jan 2 this year for contracts to be exchanged due to his funding issues.  All OK so far.  Completion set for Jan 27.  Which came.  And went.  No funds.  In fact, the deposit hadn't even been paid.  New completion date set for Feb 5.  Which came.  And went.  No funds.  Still no deposit which finally arrived Feb 11 at which time we issued a Notice to Complete.

Third Completion date set for Feb 19.  Which came.  And went.  No funds. Man flies abroad to get rest of funds.

Fourth and final Completion date set for today with an ultimatum.  Do it or we rescind.  By close of play yesterday it was clear it wasn't going to happen.

Today our solicitor unable to contact either hers' or his solicitors.

An email from his solicitor saying that the main loan should be 'with him shortly'....'hope to hear soon'.  Little knowing that our solicitor had a copy of an email from the mans' lender saying that there were underwriting background checks still to do ...time indeterminate.

So yes...time to rescind obviously.  But before doing that. we'll give him one last chance of 20 working days to complete providing he gives us an extra £10,000 outside the contract.  After all..he stands to lose £85,000.  Should focus his mind.

But his solicitor ...gross negligence or simple incompetence.  Report to the Law Society ?  He's a senior partner in a firm of solicitors and not someone in a conveyancing farm.

Thrugelmir

londonman42 said:

But his solicitor ...gross negligence or simple incompetence.  Report to the Law Society ?  He's a senior partner in a firm of solicitors and not someone in a conveyancing farm.

For what?  The solicitor is only acting on his clients instructions. Not in his remit to say or disclose anything. 

eddddy

I expect the solicitor warned his/her client about the risks of exchanging contracts before completion funds are available - and the client instructed the solicitor to proceed anyway.

But your comment about the "deposit hasn't been paid" seems strange. Contracts wouldn't have been exchanged, if the solicitor didn't have the deposit stated in the contract.

Perhaps you mean that the contract stated a reduced deposit - i.e. Less than 10%. That obviously makes it more difficult to recover losses as a result of the failure to complete.

[Deleted User]

How does your solicitor have an email from a random buyers lender?? 

londonman42

Thrugelmir said:

londonman42 said:

But his solicitor ...gross negligence or simple incompetence.  Report to the Law Society ?  He's a senior partner in a firm of solicitors and not someone in a conveyancing farm.

For what?  The solicitor is only acting on his clients instructions. Not in his remit to say or disclose anything. 

My understanding is that the solicitor is supposed to see proof that sufficient funds are available before letting the exchange go ahead.

londonman42

eddddy said:

I expect the solicitor warned his/her client about the risks of exchanging contracts before completion funds are available - and the client instructed the solicitor to proceed anyway.

But your comment about the "deposit hasn't been paid" seems strange. Contracts wouldn't have been exchanged, if the solicitor didn't have the deposit stated in the contract.

Perhaps you mean that the contract stated a reduced deposit - i.e. Less than 10%. That obviously makes it more difficult to recover losses as a result of the failure to complete.

They were exchanged without the deposit. Full 10% deposit.

londonman42

Deleted_User said:

How does your solicitor have an email from a random buyers lender?? 

People hit Reply All? 

I see that you're a mortgage adviser.  Is it normal that a lender will do underwriting checks before releasing the funds to complete ?

Thrugelmir

londonman42 said:

eddddy said:

I expect the solicitor warned his/her client about the risks of exchanging contracts before completion funds are available - and the client instructed the solicitor to proceed anyway.

But your comment about the "deposit hasn't been paid" seems strange. Contracts wouldn't have been exchanged, if the solicitor didn't have the deposit stated in the contract.

Perhaps you mean that the contract stated a reduced deposit - i.e. Less than 10%. That obviously makes it more difficult to recover losses as a result of the failure to complete.

They were exchanged without the deposit. Full 10% deposit.

Was your solicitor aware? 

davidmcn

londonman42 said:

Thrugelmir said:

londonman42 said:

But his solicitor ...gross negligence or simple incompetence.  Report to the Law Society ?  He's a senior partner in a firm of solicitors and not someone in a conveyancing farm.

For what?  The solicitor is only acting on his clients instructions. Not in his remit to say or disclose anything. 

My understanding is that the solicitor is supposed to see proof that sufficient funds are available before letting the exchange go ahead.

Your understanding is wrong. They should, of course, advise their client that they'll need to have the money ready for completion, and some might in practice want to make further checks rather than get embroiled in this sort of hassle, but they don't have to.

londonman42

We have rescinded.   As an aside, people really do need to be careful about Reply All as buried in one of the emails is the Completion Statement of the putative sale from her to him !

PasturesNew

It's the solicitor's job to check the availability and source of the funds, to ensure that at exchange and completion everything's in order.  The solicitor will have asked where the money's coming from, then the responsibility is with the buyer to come up with that and show any necessary documentation where things are unusual/from abroad etc.  It would not be the solicitor's fault if the buyer failed to pull their money together in time.  The solicitor only has an obligation to ensure that at exchange and completion the money is available, legal and so your contract is not compromised.

The buyer can be telling all manner of stories to that point, which the solicitor has to believe to be true ... and their responsibility is to either question them further to make them uncomfortable if they're lying, or to trust that the buyer will come through with the money.  The solicitor is not their mother. 

The solicitor's job is purely to protect your house and to ensure that you get your funds, as per contract, if/when the contract is drawn up and exchanged.