Bridging loan penalty due to bridge company's legal firm delay by a few days

Clin_the_building

I used a bridge loan to buy a new build house that was supposed to take one year to build but ended up taking four years due to "covid supply issues". We had short notice of completion but already had a mortgage agreed in principle and all we had to do was re-apply and get the hard checks done. Obviously the original mortgage offer expired and we were advised by our brokers that when we needed the mortgage it would be straightforward. 

In the meantime, because we had our post redirected to our temporary rented property for only six months it turned out my wife had a CCJ issued to our old address as she had overlooked changing her vehicle log book until a year after we had left our original property, our fault I know. 

She works for a health trust as a nurse practioner and gets £55 taken out of her wages each month for parking, the parking company missed the fact that she already paid for parking, perhaps lack of communication between the Trust and the parking company. Nevertheless she had the parking fine escalate in to a CCJ being issued without our knowledge which came to light when we re-applied for our mortgage. 

In a rush to fund the property I took out a bridging loan for up to 12 months to buy our house. I was prepared to pay the £3k a month until we had paid the CCJ off and used a legal firm to make it disappear and re-apply for a mortgage. 

Ten months later we had our ducks in a row and had mortgage approval, hoping to avoid the last two months of bridge payments we were ready to pay it off. The bridge company's solicitors notified my legals that there was a delay in land registry registration (they held the ownership docs), I got the impression that they had been rather sloppy. What if we had been in a position earlier..... but they told us they would escalate the application as there was a backlog. 

It got to the 12th month and they were still waiting I was told. The bridge deadline was approaching, I was getting very concerned. 

The Bridge company's legals said the registration was imminent, I trusted them and resigned myself that I'd have to pay the full 12 months, fair enough. 

The deadline date passed and magically the registration was completed 3 working days after the deadline, I was told that although it was their legals fault I would still have to pay the £23.5k penalty charge when we had been ready for the last 2 months. 

Call me suspicious but I feel as if the registration issue was strung out so that the bridge company could issue penalty charges despite it being their legals sloppiness. 

I was wanting to know if anyone else has ever had such a narrow coincidence with a bridge company? 

On reflection it seems like an easy scam and perhaps the bridge company and their legals may have manipulated the situation. There was no admission or compassion from the bridge company over their legals delay which sucked up a large amount of our savings....thoughts would be appreciated? 

I want to make it clear that I was okay with the bridge charges over the 12 months as initially agreed and the CCJ was our own fault but the penalty leaves a very sour taste!

user1977

I don't follow why registration is an issue here - you don't need to wait until registration is complete before discharging a charge, or taking out a new mortgage. What did your solicitors make of it? 

Clin_the_building

user1977 said:

I don't follow why registration is an issue here - you don't need to wait until registration is complete before discharging a charge, or taking out a new mortgage. What did your solicitors make of it? 

Thanks for replying, my solicitor said that the new mortgage Building Society insisted that registration was completed before funds could be transferred. I'm no expert on procedures but tried to gen up on things by research online and my broker. Perhaps I naively expected good conduct from all parties....as I said I'm keen to know if anyone else has had the same 'coincidental' penalty charges.

user1977

Clin_the_building said:

user1977 said:

I don't follow why registration is an issue here - you don't need to wait until registration is complete before discharging a charge, or taking out a new mortgage. What did your solicitors make of it? 

Thanks for replying, my solicitor said that the new mortgage Building Society insisted that registration was completed before funds could be transferred.

At which point you ought to have dumped them and looked for a different lender with more sensible attitudes, it certainly wouldn't have cost you £23.5k.

Clin_the_building

user1977 said:

Clin_the_building said:

user1977 said:

I don't follow why registration is an issue here - you don't need to wait until registration is complete before discharging a charge, or taking out a new mortgage. What did your solicitors make of it? 

Thanks for replying, my solicitor said that the new mortgage Building Society insisted that registration was completed before funds could be transferred.

At which point you ought to have dumped them and looked for a different lender with more sensible attitudes, it certainly wouldn't have cost you £23.5k.

Appreciated, thank you

saajan_12

Is the bridging loan company the same as the final mortgage lender? If not, then why does an inflexible requirement by the mortgage lender become the fault of the bridging loan company? 

Could you not look for another lender if the deadline was approaching? 

Clin_the_building

Basically the bridge company's solicitors had not registered the property with land registry, they had 12 months in which to do it, we may have wanted to pay it off at six months then they're still would have been a delay as they hadn't registered.....all was left until the last minute by bridge co solicitors.

loubel

12 months to register a new build is quite quick these days. Unless the bridging company have actually said that they could and should have done something to speed this up I can't see you having much argument against the penalty.