Conveyancer withholding some proceeds of sale of flat

brendasear

Hello, this is my first time posting.  I just read a thread very similar to my case, so it prompted me to write, particularly as I have queried my completion statement.  When I emailed the conveyancer on 19 June to ensure we were still completing that day, I was asked to obtain the completion statement myself and send it to her which I did next day by RD.  The sale completed on 19 June as planned apparently although it took another email from me to her to find that out.  Maybe that's normal, I don't know.  I heard nothing from her until I wrote on 21st June with a list of 5 questions, including will her firm pay the interest accrued if the remaining mortgage is not paid back on time, as per the completion  statement, and will they also pay the interest building up in their own account while they keep hold of my money.  This resulted in very rude answers to the questions that she did actually answer.  When I asked her to remove a fee for early completion (which I had not requested) and then send me a new statement, she was very rude about that issue, and wrote that she had forgotten to put on the statement £400 to be held in her account for a year (in case of any unforeseen issues as a result of the final accounts of my flat - she said this was normal practice), and also added another £180 fee for work relating to the Land Registry.

I'm still awaiting my money, and mortgage company has kindly allowed me until tomorrow to pay back the mortgage, but it looks like I will have to call them to update them.   I am so relieved the flat is sold, after a year and one buyer dropping out, but the service was so slow, at times snails pace, and it has taken 6 months to complete.  I made a mistake in staying with this firm because I thought they would already have a lot of necessary info, thus saving time, but I was so wrong.  In all this time, I had no tenant as I let him go, because I thought the first buyer would be going ahead, so have had a year with firstly having to find the continually increasing mortgage costs, then when my savings ran out, asking the lenders to allow me to pay in full from the sale proceeds, which they allowed.  Sorry for the long post - one thing I learned is that to save an already stressful time from becoming much worse, plus losing faith in the person who is supposed to be helping you, it pays to check out thoroughly who to use for such a large and important transaction.  

subjecttocontract

It's normal with leasehold property to withhold a sum of money known as a retention. The service charge accounts for the period of your ownership will not be issued for a few months and the retention is held in case there is a surcharge payable (by you) when the accounts are published. If there is no surcharge a call to your solicitor will usually mean the money will be refunded to your bank account.

You've got off lightly, most of the leaseholds I've sold have had a £500-£1000 retention.

propertyrental

Strange that " I was asked to obtain the completion statement myself and send it to her ". Did you draw it up yourself or obtain it from.... well.... where?

'Early Completion fees are often listed in a firm's terms of business, but should not be incurred without the client either agreeing or requesting early completion. Are you sure your contract did not have an agreed timescale with Early completion specified as sooner than x weeks/months?

thegreenone

When I sold my late Mum's leasehold flat, the solicitor phoned me in the morning of completion day to say everything was in line and did I want to go ahead.  Yes. No money held back for "unforeseen things".  The management pack should clearly state if any monies were due in the future.  I had a refund of service charge fees.

The solicitor emailed me an invoice which I agreed, they took theirs and the EAs fees from the balance they held and I received the remainder in my bank account about two hours later.  

Conveyancer vs solicitor?

I hope you get this sorted quickly and don't touch them with a barge pole again.

Tiglet2

brendasear said:

Hello, this is my first time posting.  I just read a thread very similar to my case, so it prompted me to write, particularly as I have queried my completion statement.  When I emailed the conveyancer on 19 June to ensure we were still completing that day, I was asked to obtain the completion statement myself and send it to her which I did next day by RD.  The completion statement from whom?  The solicitor?  The Management Company?  The lender?  The sale completed on 19 June as planned apparently although it took another email from me to her to find that out.  It would be very unusual for the solicitor not to advise you that you had completed.  Maybe that's normal, I don't know.  I heard nothing from her until I wrote on 21st June with a list of 5 questions, including will her firm pay the interest accrued if the remaining mortgage is not paid back on time, as per the completion  statement, Solicitors will send monies to redeem the mortgage which is dependent upon when they have the funds in from the buyer's solicitor, but will wait for the lender to confirm that the funds were sufficient to close the mortgage account and will they also pay the interest building up in their own account while they keep hold of my money.  Monies from sales and purchases go into a Client Account which pays very little interest, so don't expect much, if anything to be refunded to you. This resulted in very rude answers to the questions that she did actually answer.  When I asked her to remove a fee for early completion (which I had not requested) and then send me a new statement Many solicitors have an 'expedition' fee that they add to their fees if completion takes place less than 10 working days after exchange.  Did your transaction exchange at least 10 working days prior to completion?  Check your terms and conditions which you agreed at the beginning of the transaction, she was very rude about that issue, and wrote that she had forgotten to put on the statement £400 to be held in her account for a year (in case of any unforeseen issues as a result of the final accounts of my flat - she said this was normal practice), and also added another £180 fee for work relating to the Land Registry. As said before, this would be a retention pending published end of year service charge accounts.  Check your terms and conditions for additional work charged for dealing with the Land Registry. 

I'm still awaiting my money, and mortgage company has kindly allowed me until tomorrow to pay back the mortgage, Why isn't your solicitor paying the outstanding mortgage as that would be normal? but it looks like I will have to call them to update them.   I am so relieved the flat is sold, after a year and one buyer dropping out, but the service was so slow, at times snails pace, and it has taken 6 months to complete Six months is completely normal for a leasehold transaction.  There is considerably more work involved.  I made a mistake in staying with this firm because I thought they would already have a lot of necessary info, thus saving time, but I was so wrong.  In all this time, I had no tenant as I let him go, because I thought the first buyer would be going ahead, so have had a year with firstly having to find the continually increasing mortgage costs, then when my savings ran out, asking the lenders to allow me to pay in full from the sale proceeds, which they allowed. Unless your buyer was buying as a landlord with the tenant in situ, your tenant would have needed to vacate, so that vacant possession could be achieved upon exchange.  Timings are difficult because it can take a year to get an awkward tenant out of the property.  Perhaps your tenant left earlier than they needed to, but there is always the risk that the tenant stays put and you would have needed to evict them through the court system and bailiffs.  Better that the tenant left early rather than the alternative.  Sorry for the long post - one thing I learned is that to save an already stressful time from becoming much worse, plus losing faith in the person who is supposed to be helping you, it pays to check out thoroughly who to use for such a large and important transaction.  

I'm assuming that you are talking about the sale of your flat, not buying it.  My comments in bold.

Your solicitor needs to account for all the monies in and out before they will release the remainder to you.  On a freehold transaction with no mortgage, the monies can be paid into your account on completion day.  Where monies are owed to various third parties, the solicitor needs to ensure everyone has had their funds before releasing the remainder to you, which can take several days.  You should probably be getting it any day now.

Solicitors work to a tight schedule and often have many cases on the go, especially where the fees are cheap and the solicitor is overseeing many volumes of files.  Did you pay your estate agent more than the solicitor?  People need to understand that doing the legal work properly is a necessity but doing it in only a couple of months isn't.

subjecttocontract

Service charge fees are usually set on an estimate at the beginning of the companies financial year. At the end of that year the actual costs incurred are balanced against the estimated costs and the leaseholder either receives a credit or a surcharge. The retention is to cover the possibility of there being a surcharge and to save the potential additional work for perusing the ex leaseholder for that surcharge.

EssexHebridean

Yes retentions are not particularly unusual. Yes they absolutely should have made you aware of this. No they should not be adding on any further fees after completion and without having discussed these first.

Refer back to the quotation you were given at the beginning of the transaction - and politely decline to pay any fees for their work that are not on that quote, but do appear on the completion statement from the conveyancer (not the one you obtained from the freeholder or  managing agent which I suspect is what you are referring to them asking you to get?)  and which were not discussed with you prior to them being charged. 

As for the retention - make a diary note for a year's time to contact the firm and ask them to clarify the position, and release this money to you if nothing is payable from it, but if they have requested it to be held, I would be surprised if it remained untouched, I'm afraid! 

subjecttocontract

EssexHebridean said:

 

As for the retention - make a diary note for a year's time to contact the firm and ask them to clarify the position, and release this money to you if nothing is payable from it, but if they have requested it to be held, I would be surprised if it remained untouched, I'm afraid! 

I'm surprised at your comment. I've always had retentions returned in full if there has been no surcharge. Have I just been lucky ?

brendasear

Hello, thanks so much all for taking the time to read my post, and to post your most helpful comments.

I was under the impression that the service charges for the period of my ownership had been received by the conveyancer, as I checked with the director of the management company to check today who said all has been sent.  I had always paid over the requested amount.

I had to obtain the redemption statement myself, as the lender would not disclose it to her.  It's just that this was requested at the last minute by her, and upon my chasing. 

During the first sale, I had previously agreed with the charges for early redemption as I asked if we could exchange and complete on the same day, however they didn't consult me regarding it on the second sale, although they did reduce the fee by half.  

I thought it strange not to hear from them on the day of completion, even just a quick text would have done. I'm glad you got things sorted efficiently.

When I asked why the £400 retention fee had not been added to the first completion statement, she said she had forgotten it along with the land registry fee, and asked why I hadn't reminded her!

I will definitely make a note in the diary to chase the conveyancer regarding the retention of fees!

Jonboy_1984

Service charges are normally an estimated figure paid upfront at the start of the financial year, and the freeholder then balances the accounts at year end, and either demands any shortfall or credits any underspend against the next years estimate.

A retention is common but on our last flat sale our buyers conveyancer proposed it and our solicitor consulted with us and promptly refused it. I was confident to do so as the freeholders management agent had consistently over-estimated slightly for the previous 10 years. Your solicitor should have discussed this with you their client before agreeing to it . 

The risks of not leaving a retention are that if there is a shortfall you have to pay it over within 10 days of it being requested under the standard contract, or your buyer could take fright and pull out if you didn’t leave on…

when you do request it back in 12 months do double check the solicitors sums as when we bought the sellers solicitor got the figures wrong and ours didn’t double check them.