Completion statement issued after completion - £20k+ owed

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Isthisforreal99 said:

Surely you know how much the final mortgage offer was for vs the purchase price?

Regrettably I didn’t not check the mortgage offer as I’d asked my broker to put in an application for a certain amount, but a lower amount was applied for instead. I assumed that the agreed amount had been applied for. Of course, I should have not assumed this. 

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user1977 said:

Are you certain they are actually asking you to pay a £20k shortfall and not that you've misinterpreted what they've sent you in some way? What have they said to you?

Yes they are asking us to pay the shortfall. There is no misinterpretation from us. We have spoken on the phone about the invoice three times, as we were/are really surprised. 

They have simply said it’s due. Literally nothing else has been said at all. I haven’t yet questioned why it’s been sent after completion, as I want to avoid it sounding like I don’t want to pay. It’s not that, it’s that we should have been told before completion. We would not have completed if we knew this balance was due. 

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user1977 said:

How was the transaction funded if it has in fact completed? I don't expect the solicitor has dipped into their own overdraft by £20k...

Back to this question, yes how would they have completed the purchase without all the funds? Would the seller still be waiting for the extra £20k? Or do they have a very big overdraft?

mta999

This is very unusual - obviously the solicitor has to wire the funds to the seller on completion and the seems to be a 20K shortfall so where did that 20k come from?

 I doubt it came from their client account.

user1977

Sounds very odd, even if they had made a mistake I'd expect them to say they can't complete until they receive the extra £20k. If it was a much smaller shortfall then perhaps they'd cover it themselves

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mta999 said:

This is very unusual - obviously the solicitor has to wire the funds to the seller on completion and the seems to be a 20K shortfall so where did that 20k come from?

 I doubt it came from their client account.

I have calculated that it’s come from a reduced mortgage amount. I calculated the amount we needed to borrow to ensure the equity would cover all additional costs with a surplus of £10k. Asked our mortgage advisor to submit the application but this amount was not applied for, a lower amount was. Unfortunately I didn’t see this error. So my deposit was 12% and the mortgage 82%. 

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user1977 said:

Sounds very odd, even if they had made a mistake I'd expect them to say they can't complete until they receive the extra £20k. If it was a much smaller shortfall then perhaps they'd cover it themselves

Yes, and if they’d said that then we would have not wanted to complete as we did not plan to deplete our entire savings and more on completion of the purchase. 

If a solicitor makes a mistake, I don’t know if they are duty bound to tell you. So perhaps the issue is being glossed over until I raise a concern 

SDLT_Geek

mta999 said:

This is very unusual - obviously the solicitor has to wire the funds to the seller on completion and the seems to be a 20K shortfall so where did that 20k come from?

 I doubt it came from their client account.

I wonder how much the stamp duty is?  There is 14 days to pay this.  Perhaps the solicitor was able to complete with the money available and needs the £20K shortfall so the stamp duty can be paid in full.

Tabieth

I don’t understand. How could you complete if you were 20k short? Who paid that 20k to the seller?

saajan_12

The completion statement itself is a red herring - yes its a handy summary, but its usually done after the mortgage offer and other details are known, often after exchange when there's little you can do. 

This should have been reviewed when applying for the mortgage and assessing if ready to exchange. As between you v solicitor v broker, it'll depend on exactly what the emails said, whether they specifically knew about the lowered deposit, whether they asked you to check the amounts etc. 

Separately you still need a way forward to raise the 20k, which may incur some cost. [this cost would be your mitigated damages which you'd claim from the solicitor (in part) if they were at fault, not the full 20k]. That could be 
* unsecured loan for 20k 
* apply for increase in mortgage 
* find from family & friends