Help, restricted covenant, title cannot be transferred

Faddi777

@gdp
1-We bought it at that time current and actual market value price for the property. ( Not for 50% value) 
Estate agent confirmed this property was listed at full ownership 

2- we paid over 100k of the last sold price to seller. I actually checked after putting the offer and when our solicitor started paper work for it. I did ask my solicitor and have proof in email.
in wich i clearly asked that this property previously sold price is 100k less than what we r paying (thats within 10 year of last bought by this seller),
And if he thinks there is any issue , condition or limitations attached with this property. Which he replied that this is all standard and we dont find any problems, all searches are fine.

3- lender did survey for the property too and they were happy with the price. Im not sure if they aware of the current situation, im scared if they found out , it can be worse for me.
Im not sure about the discount sale eligibility criteria, i really hope HA get their money back from seller and remove the condition

I have no idea how it will be sorted
The whole property buying experience  was a mess.
When spoke to Land registry office, i was told that they have returned the application or invalidate (can't remember the exact what they said) because my solicitor couldn't satisfy the requirements they asked (they ask to get consent from HA) before transferring into my name. which HA already refused to provide.

My question now is does anyone ever come across this situation, personal experience, family or friends? If so how did they resolve it?

My solicitor didn't respond to my last email. And lost contact since . 
I ll copy a para from his last email

"this is to inform you that the seller did not comply with the restriction, B4 of the Title Register, prior to the completion and for this purpose, our process of registration of property has come to a halt

Unfortunately, neither the seller nor their solicitors revealed this information during the whole transaction. Contrarily, seller's solicitors stated that there has been no breach of any restriction or covenants by the seller in their reply to our enquiries."
Lastly i would like to know that my complain against estate agent would be treated separately or would it be linked if i take legal action against my solicitor? 
Are estae agent legally obliged to disclose restricted covenant? 
  

Flugelhorn

This is really down to the solicitor to investigate and disclose, the lenders also will be relying on the solcitors for this (they won't expect you to disclose it) 

I wonder if @Land_Registry has any comments about what happens in these situations 

bobster2

Sorry - it's not clear from your previous posts...

- Do you have a mortgage on this property?
- What is the loan-to-value (LTV) percentage? You mention something about a 5% deposit.
- If you have a mortgage - did you go through a broker or apply yourself direct with the mortgage provider?

And also - this discount scheme - did the seller buy the home under a right-to-buy discount scheme? Or was the house part of an affordable housing scheme?

housebuyer143

Honestly, if you find someone on here who has had this exact situation you will be lucky, this is crazy! 

Did you ask the solicitor what they are doing or have done since the purchase to resolve this as they would have known within a few months of their mistake. I imagine this is going to take some serious talking to the HA to resolve. 
I would at this stage escalate this to a senior member in the firm as a form of formal complaint and tell them you need this resolved urgently. Once they reply, if it's not in your name of you don't have a resolution you should do straight to the ombudsman and try and get a fair resolution.

Have you seen the title deeds and can you see the restriction in the B section? I only ask as it's really strange that two solicitors have missed this. One maybe, but both...

The lender isn't going to be happy with the lawyer as they now have lent you a lot of money on a property they have no legal right to. They also might not have lent on a discounted property. I would leave that alone though and focus on getting the solicitor to resolve it. The lawyers have insurance for this.

EssexHebridean

It sounds like either the LR raised requisitions, did get the required responses, and then cancelled the application, or that the initial application was missing something vital in which case it’s “rejected”. In either case the solicitor will need to keep renewing the priority search (OS1 I think? 🤔 ) to ensure that both you and your lender are protected. (The lender will generally be on top of this, but there is no harm in asking your solicitor whether it is in place. 

anselld

INAL but it seems that the person who is riding off into the sunset with an extra 50% of market value is the vendor.  Therefore to get any sort of solution vendor would need to be sued for breach of contract with damages to the value of 50% market value plus costs.

It is not the HA who are out of pocket, it is the OP since if they ever clear up the mess and come to sell they in turn will need to sell for 50% of market value.

There may also be blame elsewhere but assigning blame is not the same as getting a resolution.

Keep_pedalling

Your situation is very unusual as it seems both sets of solicitors failed to have picked this up so I also doubt whether you will find anyone with the same experience.

This is going to take some time to sort out but you need to follow the complaints procedure set out by the Law Society against your solicitor. 

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

GDB2222

Faddi777 said:

@gdp
1-We bought it at that time current and actual market value price for the property. ( Not for 50% value) 
Estate agent confirmed this property was listed at full ownership 

2- we paid over 100k of the last sold price to seller. I actually checked after putting the offer and when our solicitor started paper work for it. I did ask my solicitor and have proof in email.
in wich i clearly asked that this property previously sold price is 100k less than what we r paying (thats within 10 year of last bought by this seller),
And if he thinks there is any issue , condition or limitations attached with this property. Which he replied that this is all standard and we dont find any problems, all searches are fine.

3- lender did survey for the property too and they were happy with the price. Im not sure if they aware of the current situation, im scared if they found out , it can be worse for me.
Im not sure about the discount sale eligibility criteria, i really hope HA get their money back from seller and remove the condition

I have no idea how it will be sorted
The whole property buying experience  was a mess.
When spoke to Land registry office, i was told that they have returned the application or invalidate (can't remember the exact what they said) because my solicitor couldn't satisfy the requirements they asked (they ask to get consent from HA) before transferring into my name. which HA already refused to provide.

My question now is does anyone ever come across this situation, personal experience, family or friends? If so how did they resolve it?

My solicitor didn't respond to my last email. And lost contact since . 
I ll copy a para from his last email

"this is to inform you that the seller did not comply with the restriction, B4 of the Title Register, prior to the completion and for this purpose, our process of registration of property has come to a halt

Unfortunately, neither the seller nor their solicitors revealed this information during the whole transaction. Contrarily, seller's solicitors stated that there has been no breach of any restriction or covenants by the seller in their reply to our enquiries."
Lastly i would like to know that my complain against estate agent would be treated separately or would it be linked if i take legal action against my solicitor? 
Are estae agent legally obliged to disclose restricted covenant? 
  

The estate agents are not liable. Besides that, if you have already accepted a payment from the estate agent, that will have settled your claim against them. You can’t have another go at them.

Unfortunately, it sounds like your solicitors are not accepting liability for this, and are instead blaming the seller. The sensible course now is to involve another solicitor to help you. That will be expensive, but you cannot leave this. You do have the award from the estate agent, and that will get you started with the solicitor fees. 

I would hope that, once you have a lawyer working for you, the matter Will be settled quickly. One course may be to make a formal complaint to the original solicitors and then go to the legal ombudsman if necessary. You don’t need a solicitor to help you with that, but my advice is to get one anyway, as it will stop the original solicitor from evading blame.

You asked whether others have been in this position, and the chances are very low. You seem to have been defrauded, and the solicitor would normally spot this and stop it happening. 

Hopefully, the solicitor is liable, because the chances of getting anything back from the seller don’t seem great.

You need paid for legal assistance, and you can’t rely on a group of well meaning people on a website. 

letom

This is quite an interesting case and one that very rarely happens because someone along the way usually finds that's there's a housing association involved in some way. In my view the level of who should be most scared is

Seller >>> your solicitor > seller's solicitor > you > seller's estate agent

To start I don't think they are going to reverse the transaction, that's quite difficult and would require the HA to go to court (which I don't think they will do). Ultimately the HA wants to ensure the discount is applied as opposed to making sure transactions don't happen.

In all likelihood the seller has committed fraud, they have lied or omitted information that has pocketed them the discount they should have given to you. As this point both lawyers may have figured this out and are therefore being very cautious about what they say due to how you need to handle information.

I would go to another (much better and more expensive) law firm, one that is also litigious and explain the situation because this is definitely negligence on the part of your lawyer. But before you sue anyone you need someone competent to make this right, if your lawyer didn't even notice this during the transaction I wouldn't have much faith in them sorting it out, this is now a complex conveyancing situation, not something I would want the cheap online lawyers handling. Whatever additional fees you incur I would expect you get back after you sue your original lawyer, with the second lawyer working on a no win no fee, which they should given the circumstances.

One very important point is who is the seller, are they UK national, have they moved abroad etc. The reason I think they should be most scared is that received quite a lot funds they shouldn't have, and one way or another they are going to be sued, if they used it for an onward purchase then I wouldn't want to be in their shoes.

Technically they should have given you a discount, and therefore owe you a massive refund. Definitely one to pick up with your new lawyers but sequencing could be 

You sue seller for discount and win > show proof to HA of discount and hope they then give consent > they give consent and change title > new lawyer sorts of amendment to the mortgage > you sue old lawyer for all additional fees (I would include anything which changes your interest rate) and some compensation

Keep_pedalling

letom said:

This is quite an interesting case and one that very rarely happens because someone along the way usually finds that's there's a housing association involved in some way. In my view the level of who should be most scared is

Seller >>> your solicitor > seller's solicitor > you > seller's estate agent

To start I don't think they are going to reverse the transaction, that's quite difficult and would require the HA to go to court (which I don't think they will do). Ultimately the HA wants to ensure the discount is applied as opposed to making sure transactions don't happen.

In all likelihood the seller has committed fraud, they have lied or omitted information that has pocketed them the discount they should have given to you. As this point both lawyers may have figured this out and are therefore being very cautious about what they say due to how you need to handle information.

I would go to another (much better and more expensive) law firm, one that is also litigious and explain the situation because this is definitely negligence on the part of your lawyer. But before you sue anyone you need someone competent to make this right, if your lawyer didn't even notice this during the transaction I wouldn't have much faith in them sorting it out, this is now a complex conveyancing situation, not something I would want the cheap online lawyers handling. Whatever additional fees you incur I would expect you get back after you sue your original lawyer, with the second lawyer working on a no win no fee, which they should given the circumstances.

One very important point is who is the seller, are they UK national, have they moved abroad etc. The reason I think they should be most scared is that received quite a lot funds they shouldn't have, and one way or another they are going to be sued, if they used it for an onward purchase then I wouldn't want to be in their shoes.

Technically they should have given you a discount, and therefore owe you a massive refund. Definitely one to pick up with your new lawyers but sequencing could be 

You sue seller for discount and win > show proof to HA of discount and hope they then give consent > they give consent and change title > new lawyer sorts of amendment to the mortgage > you sue old lawyer for all additional fees (I would include anything which changes your interest rate) and some compensation

I think any discount the seller got should go back to the HA not the OP, once done the restriction can be removed.