Timelines for payments on sale completion - solicitor c*ck ups

Melanie1972

Hi

It's been 10 years since I sold a house so memory is a bit short on the facts on this.

Due to mess ups by the solicitor, my sale completed quite late in the day on Friday 3rd May.  They have had the audacity to charge me CHAPS fees on my completion statement for the payment back to myself.  The mortgage was fully redeemed as I have a gap between sale and purchase of my next home.  I won't go into detail, but aside from all the other issues I had with them I wanted to know what the timelines for payment should have been:

1. Repayment of surplus money to me - in my view should be same day (CHAPS cut off is 5pm for sale day electronically) and they had the correct account details by 3.30pm.
2. Payment of the outstanding mortgage to my lender - again should be same day in my view as the redemption statement was worked on money being received on Friday 3rd.  I'm about to call my mortgage provider as we are now on 9th May, my account still shows the mortgage as outstanding and my old mortgage payment has come out of my bank account today.  In your experience, is the payment automatically stopped when a mortgage is redeemed even if there is less than a week to go?

TIA
M

BarelySentientAI

1.  Depends how busy the office was.  Next working day does not seem unreasonable, or are you suggesting they've held on for longer?

2.  Less than a week until a direct debit payment, then I would expect the payment to still happen.  Mortgage redemption is however long the lender needs - again, I would not expect same day account update.

Tiglet2

Look at the terms and conditions you signed up for with your solicitor.  It will almost certainly mention a charge for transferring the proceeds to your lender and to you by CHAPS.

When there is a mortgage to redeem, it would be unlikely that any surplus funds would be transferred to you immediately, until the solicitor has confirmation from the lender that the funds sent to them to redeem the outstanding mortgage was sufficient to repay it.  As you completed "late in the day", they may have only been able to send funds after the cut off point and possibly not till the Tuesday, the first working day following completion.

Melanie1972

Tiglet2 said:

Look at the terms and conditions you signed up for with your solicitor.  It will almost certainly mention a charge for transferring the proceeds to your lender and to you by CHAPS.

When there is a mortgage to redeem, it would be unlikely that any surplus funds would be transferred to you immediately, until the solicitor has confirmation from the lender that the funds sent to them to redeem the outstanding mortgage was sufficient to repay it.  As you completed "late in the day", they may have only been able to send funds after the cut off point and possibly not till the Tuesday, the first working day following completion.

The redemption had a date the payment was due by to not incur further charges

Melanie1972

BarelySentientAI said:

1.  Depends how busy the office was.  Next working day does not seem unreasonable, or are you suggesting they've held on for longer?

2.  Less than a week until a direct debit payment, then I would expect the payment to still happen.  Mortgage redemption is however long the lender needs - again, I would not expect same day account update.

The reason they got their information late in the day was due to their incompetency dealing with the exchange of contracts (and other issues leading up to this).  I had to chase them continually for my funds with endless promises of callbacks throughout the process, so yes, I'd suggest they hung onto it for as long as possible.

BarelySentientAI

Melanie1972 said:

BarelySentientAI said:

1.  Depends how busy the office was.  Next working day does not seem unreasonable, or are you suggesting they've held on for longer?

2.  Less than a week until a direct debit payment, then I would expect the payment to still happen.  Mortgage redemption is however long the lender needs - again, I would not expect same day account update.

The reason they got their information late in the day was due to their incompetency dealing with the exchange of contracts (and other issues leading up to this).  I had to chase them continually for my funds with endless promises of callbacks throughout the process, so yes, I'd suggest they hung onto it for as long as possible.

That doesn't really answer the question though.  How long did they have your money for after you had provided the correct information?  In complete working days.

user1977

Melanie1972 said:

Due to mess ups by the solicitor, my sale completed quite late in the day on Friday 3rd May.  

Meaning what time exactly? They can't send funds out any earlier than whenever completion occurs. And in practice it often runs into the next working day anyway - they'll be concentrating on getting the completions done, especially on Fridays. Pretty normal for redemptions/surplus funds to be sent out on the Monday.

Bear in mind the cut-off time for your solicitor's purposes is going to be a fair bit earlier than 5pm, as any payments generally need another level of authority and then their cashroom team to process (and they'll have a pile of other transactions to do). Something like 3.30pm would be normal. Their terms of business might say something about it.

propertyrental

Melanie1972 said:

Due to mess ups by the solicitor, my sale completed quite late in the day on Friday 3rd May. 

This is really not that unusual (especially in chains?) and can be the result of any one or more of multiple factors.

 They have had the audacity to charge me CHAPS fees on my completion statement for the payment back to myself. 

This is NOT 'audacity' - it will be clearly listed in the solicitor's Terms of Business that you will have read before instructing them to act for you.

Besides, why should they pay 3rd party (ie the bank's) fees?

 The mortgage was fully redeemed as I have a gap between sale and purchase of my next home. 

So presumably your solicitor also had to pay a CHAPS fee to redeem the mortgage.

 I won't go into detail, but aside from all the other issues I had with them I wanted to know what the timelines for payment should have been:

1. Repayment of surplus money to me - in my view should be same day (CHAPS cut off is 5pm for sale day electronically) and they had the correct account details by 3.30pm. Most (all?) banks have a cut-off around 2.30/3,00 PM for CHAPS transfers, not 5.00 PM

And of course there is inevitably a delay between the solicitor's bank receing the funds, and their admin person spotting it, and arranging the CHAPS transfer.

One issue with Completing on a Friday - it's a busy day as many house buyers/sellers like to complete on a Friday (Mad!) so the solicitor is juggling multiple Completions which inevitably impacts of the time-line

2. Payment of the outstanding mortgage to my lender - again should be same day in my view as the redemption statement was worked on money being received on Friday 3rd.

Given that it was probably impossible to arrange the CHAPS transfer by 3.00 PM (or whenever the relevant bank's CHAPS cut-off is), the redemption statement will need to be adjusted on the following Monday before the mortgage can be redeemed.

  I'm about to call my mortgage provider as we are now on 9th May, my account still shows the mortgage as outstanding and my old mortgage payment has come out of my bank account today.  In your experience, is the payment automatically stopped when a mortgage is redeemed even if there is less than a week to go?

TIA
M

The DD for your mortgage will not be cancelled till the mortgage is redeemed. If you have over-paid this month, the over-paymen will be returned to you.

Tiglet2

Don't forget that Monday 6th was a bank holiday, so the first working day after Friday 3rd was Tuesday 7th.

Hoenir

Melanie1972 said:

1. Repayment of surplus money to me - in my view should be same day (CHAPS cut off is 5pm for sale day electronically) and they had the correct account details by 3.30pm.

In your experience, is the payment automatically stopped when a mortgage is redeemed even if there is less than a week to go?

The client reconcilation of funds needs to be performed by the Solicitors accounting team. This isn't going to happen the same day. Never has. 

The CHAPS fee is simply a recharge of the fee levied by the bank. That' s how all disbursements work including search fees etc. 

Direct debits are set up 10 days in advance of the due date. These are mass runs. Not possible to edit the data. Again been the same way for many decades.