Help, restricted covenant, title cannot be transferred

Faddi777

Hi everyone, 
Im in urgent need of help/ advice, im so confused with the whole situation. 
I ll try to keep the long story short.
Bought our first ever property 2021. After exchange and completion we waited few month before contacting  HM land registry asking when will we receive the change of title document. 
I was advised that they have sent our  solicitor few queries and waiting for confirmation and untill then they can't process the transfer. 
After a while we found out that there was restricted covenant on title which doesn't allow seller to sell the property without consent of housing association. 
Basically the seller bought this property on Discount sale scheme. Which means the seller only owns the 50% of the property and if seller wishes to sell , they have to get housing association/council involved in the sale and follow the procedure in contract which didn't happen at any point during the sale .
Now we are in a very messy situation and don't have any clue that how this will resolved.
I had literally no experience or idea about house purchase or legal side of it. I completely relied on my solicitor with good faith.
In this situation who is responsible for this mistake.
- My solicitor
-Estate agents (do they have duty of care to provide this sort of information to potential buyers?)
- the Vendor (who clearly would have known about this )
Just to add i have complained against Estate agent to PRS, and after submitting all communication and evidence,
PRS suggested resolution is to be awarded the fee estate agent received from sale of this property to me.
Do you think its reasonable offer ?
As if i had to reverse this whole transaction, i would suffer a big loss. The money we put in to decorate the whole property, also  the interest rate has gone up, we were looking for similar properties and they are about 30k more than this property, our property gone up around 22k more according to valuation we had online.
As estate agent saying they were not made aware of such conditions from seller. So its solely not their fault beacuse my solicitor at that time should do depth searches and investigation as part of his work.
Any input will be highly appreciated.
There has been lot of struggle, pain, stress and sleepless nights during the day we put our offer and uptil now. Im really scared of even going to another solicitor after having such horrific experience with this solicitor.
I ll be so grateful of any advice.
Thanks 

Flugelhorn

I wouldn't rely on the estate agent to have noticed this at all  but I would have expected the solicitor to review the title and any restrictions on it 

So did the vendor sell the property to you for the market rate even though the HA owned 50% of it? presume he didn't give any of the money to the HA?

_Penny_Dreadful

Faddi777 said:

Hi everyone, 
Im in urgent need of help/ advice, im so confused with the whole situation. 
I ll try to keep the long story short.
Bought our first ever property 2021. After exchange and completion we waited few month before contacting  HM land registry asking when will we receive the change of title document. 
I was advised that they have sent our  solicitor few queries and waiting for confirmation and untill then they can't process the transfer. 
After a while we found out that there was restricted covenant on title which doesn't allow seller to sell the property without consent of housing association. 
Basically the seller bought this property on Discount sale scheme. Which means the seller only owns the 50% of the property and if seller wishes to sell , they have to get housing association/council involved in the sale and follow the procedure in contract which didn't happen at any point during the sale .
Now we are in a very messy situation and don't have any clue that how this will resolved.
I had literally no experience or idea about house purchase or legal side of it. I completely relied on my solicitor with good faith.
In this situation who is responsible for this mistake.
- My solicitor
-Estate agents (do they have duty of care to provide this sort of information to potential buyers?)
- the Vendor (who clearly would have known about this )
Just to add i have complained against Estate agent to PRS, and after submitting all communication and evidence,
PRS suggested resolution is to be awarded the fee estate agent received from sale of this property to me.
Do you think its reasonable offer ?
As if i had to reverse this whole transaction, i would suffer a big loss. The money we put in to decorate the whole property, also  the interest rate has gone up, we were looking for similar properties and they are about 30k more than this property, our property gone up around 22k more according to valuation we had online.
As estate agent saying they were not made aware of such conditions from seller. So its solely not their fault beacuse my solicitor at that time should do depth searches and investigation as part of his work.
Any input will be highly appreciated.
There has been lot of struggle, pain, stress and sleepless nights during the day we put our offer and uptil now. Im really scared of even going to another solicitor after having such horrific experience with this solicitor.
I ll be so grateful of any advice.
Thanks 

In terms of money from the estate agent that sounds pretty decent. It’s your solicitor that should have realised the restrictions. I’d start with a formal complaint to the solicitor who handled your purchase and then escalate your complaint to the Legal Ombudsman if you’re not satisfied with the solicitor’s response. 

https://www.lawsociety.org.uk/public/for-public-visitors/using-a-solicitor/complain-about-a-solicitor

silvercar

What does your solicitor say? If you solicitor has messed up, they should put it right. If they fail to do so you put in a complaint. If you are unhappy with the result of the complaint you go to the ombudsman.

shared ownership/ shared equity/ help to buy etc are concepts solicitors will be familiar with, so I’m very surprised that your solicitor missed it, if that is indeed what happened. The seller’s solicitor often gives an undertaking to sort all the charges on the property, so it may be that the seller’s solicitor hasn’t completed all necessary actions.

Flugelhorn

silvercar said:

shared ownership/ shared equity/ help to buy etc are concepts solicitors will be familiar with, so I’m very surprised that your solicitor missed it, if that is indeed what happened. The seller’s solicitor often gives an undertaking to sort all the charges on the property, so it may be that the seller’s solicitor hasn’t completed all necessary actions.

Good point, maybe it is the seller's solicitor who is still sorting this 

Keep_pedalling

I doubt whether the HA actually own 50% otherwise we are talking about outright fraud. It is more likely that the restriction meant that your seller would have to refund the HA the discount they received if they sold within a few years of purchase. Either way it seems your solicitor has been negligent and it is down to them to sort this out.

housebuyer143

Was it on a discount as in they should have sold the house to you at a discounted price? Some discounts are like this. The LA doesn't own half but legally the seller must sell it to you at the discounted rate as they got when they bought it. 

Regardless of what went wrong, the solicitor is wholly to blame. I would put in a formal complaint. You want the title updated into your name (as a bare minimum) and compensation for financial loss you have suffered. If you are not happy with the it response (and I would ask what they have been doing for the past 2 years to resolve this because they definitely know about it) escalate it to the ombudsman. 

knightstyle

Which solicitor did you use?  Was it a decent local one as is regularly recommended on here or was it one of the robo units who pay the estate agent a commission to put their name forward?
Hopefully it was a local firm and you can arrange an appointment to see them to get a clear picture of what has happened.  Insist they get a reply from the HA detailing what the problem is.

bobster2

Keep_pedalling said:

I doubt whether the HA actually own 50% otherwise we are talking about outright fraud. It is more likely that the restriction meant that your seller would have to refund the HA the discount they received if they sold within a few years of purchase. Either way it seems your solicitor has been negligent and it is down to them to sort this out.

Yes - if HA still owned 50% - the discussion wouldn't be about a restrictive covenant preventing the transfer - it would be about a joint proprietor not agreeing to the sale. And surely there's no way a solicitor could have failed to spot this.

EssexHebridean

This could be either shared ownership or RTB. In either case though, the solicitor should have spotted it and I would have expected that it would be detailed in correspondance during the purchase, and also if Shared Ownership in the report on title given to the OP by the solicitor.

aoleks

the estate agent has nothing to do with it, whatever those above say, and you're not entitled to any "refund" (what refund? seller pays agent fees). also, if it comes to it, that amount will be a drop in the ocean compared to the costs you'll incur, so do not accept anything.

the solicitor is at fault and something doesn't add up, as every solicitor checks the title as if their life depends on it. if not, that's a big mistake and the solicitor should set it right. raise a formal complaint with your solicitor's firm, lay out all the facts and ask for a resolution, in whatever shape or form, but do NOT contact the housing association directly, only talk to people through a solicitor at this stage.