Remortgage - standoff - any advice appreciated

redblueandgreen

Hi,

I’m currently 4 months into a remortgage where part of the objective was to clear the remaining help to buy and consolidate some debts.

After 4 weeks of referring to an amendment with the lender, finally the solicitors have now provided further detail. The lender has made it a condition to pay off the debts first before transferring the funds. I had assumed that the solicitor would do this through their client account, but they are now saying that would breach account rules and they are not allowed to act as a banking facility. After reviewing the solicitor regulator authority website and finding a case study which literally says they can, the solicitor has now replied with this is not the solicitor account rules, this is the SRA rules  for conduct and separate to the solicitor account rules for use of client account.  Whilst the conduct rules allow for it, the account rules do not‘.

Is this unusual, what options do I have?. I’m reluctant to start again with another solicitor, but if I do would I still be liable for costs for the original solicitor? 

Any advice greatly appreciated

Thanks

user1977

Solicitors are being unnecessarily awkward, they're certainly allowed to do this as part of a transaction, and it's reasonable where e.g. the lender needs assurance that other debts are being paid simultaneously with completion.

Yes they're not allowed to use their client account as a banking facility, but that means e.g. letting clients leave their funds there for no reason connected to a case they're dealing with.

redblueandgreen

That my understanding too, I even sent them a case study example on the regulators web site which clarifies it’s a related transaction

Hoenir

redblueandgreen said:

The lender has made it a condition to pay off the debts first before transferring the funds.

I'm uncertain and wondering if there's misunderstanding. This infers that the lender will not release the funds until the condition is satisfied. Rather than the solicitor themselves settles the "debts" upon completion. 

On completion day there's no way that the solicitors administration team is going to be dealing with ad-hoc payment requests. Too much else going on. 

user1977

Hoenir said:

redblueandgreen said:

The lender has made it a condition to pay off the debts first before transferring the funds.

On completion day there's no way that the solicitors administration team is going to be dealing with ad-hoc payment requests. Too much else going on. 

Seems perfectly feasible to me for them to do so, but in any event it's not the excuse they've given.

lfc321

You say “the lender has made it a condition to pay off the debts first before transferring the money.”

Does the solicitor think you are asking them to settle your debts (using other clients’ money) and then reclaim that money when your mortgage funds arrive?

If that’s what they think you’re asking them to do, I can see why they won’t agree to do that. 

Hoenir

Definately sounds as if there's a case of speaking cross purposes. 

kingstreet

Look for another lender. Plenty will allow remortgage funds to be used to repay debt on completion.