Help, restricted covenant, title cannot be transferred

GDB2222

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 don’t think that the OP should sue the seller. His solicitor should sort out the issue at the solicitor’s expense. If the solicitor then wants to sue the seller, that’s their problem. 

SDLT_Geek

GDB2222 said:

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 don’t think that the OP should sue the seller. His solicitor should sort out the issue at the solicitor’s expense. If the solicitor then wants to sue the seller, that’s their problem. 

Someone claiming needs to show that they have "mitigated their loss".  Sometimes this could involve claiming off another party.

So if OP just claims against their own solicitor, they might find their claim is resisted on the basis that they have not mitigated their loss by claiming against the seller.

user1977

Keep_pedalling said:

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. 

Why would the HA end up with the money? That isn't the point of the restriction.

The problem may however be that the lender wouldn't have wanted to lend on the affordable housing scheme at all, so the OP can't even afford the 50% - in which case I guess it's possible the whole transaction would have to be unravelled (or the solicitors stick their hands in their/their insurers' pockets to make up the price).

user1977

letom said:

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.

They don't need to work on "no win no fee", in cases like this I've seen the negligent party (or really, their insurers) hold their hands up at an early stage and acknowledge that they'll meet the additional legal costs for sorting it out.

anselld

Keep_pedalling said:

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. 

No.  If the covenant requires each sale to be made at a 50% discount to market value there should be no money to give to the HA.  It is the buyer who is out of pocket by not getting the discount.

Tiglet2

Faddi777 said:

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? 

@Faddi777
The only situation vaguely similar that I remember was where a seller had marketed her home for sale through an Estate Agent, found a buyer and then both of them instructed solicitors in the sale and purchase of said property.

The property was originally purchased by the seller through the Right to Buy Scheme from the freeholder (the Council). 

The seller had owned the property for 8 years so thought that the qualifying period of 5 years had passed, whereby she no longer had to pay back a percentage of the original discount she had received from the Council.  That was fine, she met the criteria, however, there was a Restriction on the title of the property which meant that purchasing the property under the Right to Buy scheme was bound by a covenant called “The Right of First Refusal‟. Under section 156A of the Housing Act 1985 the Right of First Refusal applies where there is to be a disposal, e,g. a sale.

The Right of First Refusal allows social landlords to buy back homes purchased under the Right to Buy scheme and which the owner then wants to sell on. The Government’s aim was to provide a mechanism through which homes sold under the Right to Buy scheme can revert to being social housing where a need exists, at a price that is fair to owners of such properties who wish to resell them, without imposing any undue delay.

Leaseholders and Freeholders who purchased their property through the Right to Buy scheme after 10th August 2005 and who wish to resell the property within 10 years of it being transferred to them must offer their former landlord the Right of First Refusal on purchasing the property.

The former landlord can mean the Council who conveyed the Right to Buy on the property, or its successor if the Council’s housing stock is transferred to another Housing Authority, or another registered Social Landlord nominated by the former landlord. 

The Seller hadn't realised she needed to offer the property back to the Council, so the transaction was delayed as she needed to retrospectively offer the property back to the Council and then wait for their response over whether they wanted the property back or they were willing to provide Consent to sell on the open market.

It was the buyer's solicitor who had raised the enquiry about the Restriction and the seller's solicitor who had to deal with it.  

I do not know from the information you have shared if the above is similar to your situation, but perhaps to understand it better, I would suggest you look at all the paperwork supplied by your solicitor during the course of your purchase.

The solicitor would have sent you a copy of the registered title (in the previous owner's name) as well as a Report on Title, together with a copy of the enquiries they raised, which tells you what they have found out about the property, before you exchanged.

Could you take a look at the Title they sent you as well as the Report on Title and a copy of the raised enquiries and quote exactly what the Restriction at B4 says, redacting any identifying information?  Look at the enquiries raised and see if they enquired about that Restriction?  If they did enquire about the Restriction, what was the Seller's Solicitors response to it?  Please quote exactly what the enquiry(ies) were and also the responses from the Seller's Solicitor.

Once you have that information, you may be able to get some better advice from experienced posters on here, who should be able to piece together what exactly happened and where the fault lies.

This is a legal problem and Estate Agents are not legal experts, so no blame can be directed at them for not understanding restrictions on a title, even if they were aware that there was one. 

sheramber

Have you got legal cover on your house insurance?

letom

anselld said:

Keep_pedalling said:

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. 

No.  If the covenant requires each sale to be made at a 50% discount to market value there should be no money to give to the HA.  It is the buyer who is out of pocket by not getting the discount.

What makes this interesting is it could actually work both ways, as you say but as at the original purchase the HA gave up 50%, they could argue that they are due this fee/discount now that the discount "chain" has ended. This could potentially turn into a 3 way (seller, buyer and HA) or maybe 4 way fight, if you include the buyer's bank , for the cash. It's why I wouldn't want an evidently rubbish online solicitor, who has already missed something big, to be fighting my corner.

user1977

letom said:

anselld said:

Keep_pedalling said:

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. 

No.  If the covenant requires each sale to be made at a 50% discount to market value there should be no money to give to the HA.  It is the buyer who is out of pocket by not getting the discount.

What makes this interesting is it could actually work both ways, as you say but as at the original purchase the HA gave up 50%, they could argue that they are due this fee/discount now that the discount "chain" has ended.

On what basis could they do that? The property is still meant to be sold only at a discount, that doesn't end because somebody has attempted to sell it for full market value. The HA's role is to enforce that, not collect any "overpayments".

GDB2222

user1977 said:

letom said:

anselld said:

Keep_pedalling said:

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. 

No.  If the covenant requires each sale to be made at a 50% discount to market value there should be no money to give to the HA.  It is the buyer who is out of pocket by not getting the discount.

What makes this interesting is it could actually work both ways, as you say but as at the original purchase the HA gave up 50%, they could argue that they are due this fee/discount now that the discount "chain" has ended.

On what basis could they do that? The property is still meant to be sold only at a discount, that doesn't end because somebody has attempted to sell it for full market value. The HA's role is to enforce that, not collect any "overpayments".

I have never bought a property like that, but I would very, very much hope that the resale restriction would have been noted on the LR. The OP makes reference to B4 of the charges register, so presumably that is it.

If it was on the LR, then the buyer’s solicitor would have been aware of it, and it’s extraordinary that they would have proceeded without protecting both the buyer and the lender. If they did make a serious mistake, it’s even more extraordinary that they are not now holding their hand up and admitting responsibility.

 I wonder whether an individual in the firm is covering things up, and just wishing the problem will go away? Which, it won’t, of course. 

There’s been such a flurry of conveyancing activity in the last couple of years that there may be quite a few of these problems waiting to come to light when the property next comes up for sale. 

A formal complaint to the senior partner might get things moving. Or, as I suggested earlier, get a solicitor involved to move things along.