Am I mad? Or is the solicitor?

IamNotAllowedToUseMyName

I have a complaint against a solicitor: here is the summary.

Is it acceptable for a solicitor to offer no legal advice on the perils and pitfalls on buying a property:

* with no title guarantee, 

* with charges on the property from the High Court and the Official Receiver, 

* a bankrupt couple identified as the proprietors of the property rather than the seller,

without making the purchaser aware of the risks, costs and process to remove such charges and to gain full title, and suggesting the contract is fit for exchange without such advice and leaving charges in place?

Discuss and advise. I've already raised this with the firm involved and the SRA but would like a sanity check.

Edit: it is a repossession which was known to the solicitors at the time of instruction.

user1977

IamNotAllowedToUseMyName said:

* a bankrupt couple identified as the proprietors of the property rather than the seller,

Edit: it is a repossession which was known to the solicitors at the time of instruction.

If it's a repossession then presumably the seller is the secured lender, not the registered proprietors? So I don't understand the relevance of this point.

In general you'll need to give us more info if you want useful advice. You haven't said what stage you're at - have you completed the purchase? What's happened since?

theartfullodger

Having bought two repos I expected issues and would expect again.  

Re "" Is it acceptable for a solicitor to offer no legal advice on the perils and pitfalls on buying a property: "" - did your instructions to the solicitor and/or contract specify that you should be legal advice?? (And what sort - e.g. "will your firm handle the paperwork" or "what issues should I expect"...)

In my experience there is often little or no paperwork or evidence on what is being bought and it's a gamble (which may or may no turn out good - or bad. ).  Bit like life.  Good luck!

IamNotAllowedToUseMyName

Thanks.

This sale has been proceeding for 6 months. The buyer (not myself) was presented in August with a contract from the seller (the mortgage company) and a TR2 amended to state "without title guarantee" and the contract removed only the seller's charge on the property. Neither the seller nor the solicitor had put in place any process to deal with the charges from the High Court nor the Official Receiver. The offer was made in March. No mention previously had been made about title defects, nor was any quotation made to deal with this. The buyer had assumed that the solicitor had all this in hand.

The buyer was presented with a contract but not with sight of the Title Deeds, and it is only buy my own purchase of the Title Deeds we were aware of the covenants and charges, the solicitor had not described any of this in the "Report on Title" which described the tenure as "Absolute Title", again, presented in August. The solicitor had not provided sight of the Title Deeds but was asking the buyer to sign that they understood what they were buying (the TR2 simply referred to charges and conditions by reference number and the Report on Title made no reference to them or described their implications)..

When querying the difference between the offer of the seller and the Report on Title, specifically what it meant by buying a property without title guarantee, the only advice was "That's normal on a repossession." Surely, legal advice is more than a substantial number of responses of the form "That's standard" and "That's normal".

So, the solicitor has offered no warnings or guidance on how to buy a repossessed property.

On Googling this issue, all we got was alarm bells, negotiate, get insurance in case it all goes wrong.

The point we have is that we, nor the buyer, do not understand the issues around the repossession and the process required to gain clear title and the solicitors are silent on the issue and haven't proactively offered advice and guidance on the steps required to gain clear title. Is it a problem that the title is in the name of a bankrupt? The seller's TR2 simply appears to say that they are removing their charge but taking no other action to remove the High Court and Official Receiver's charges. We have no idea what lies behind these charges. It may be trivial to deal with or it might be thousands, the solicitors have not given any advice apart from "That's normal".

So on that basis the buyer has withdrawn from the sale as they don't believe it is safe to buy the property, they are paying out large sums without certainty of whether they even own the property and the solicitor has not advised them, and it is unclear how the solicitor intended to gain Title Absolute (if that is the correct term). I am suggesting to the buyer that as the solicitor has not fulfilled their duty to protect the buyer's interests, there should be no fees owing. Is it normal for a buyer's solicitor to be silent on what appear to be vital matters in a purchase? The buyer lost confidence in his own solicitor, and the response to the complaint has simply been "We've done lots of work" but not addressed the issue of the lack of advice on title.

user1977

Has anyone suggested the other charges will remain? If the selling lender is first-ranking then I would expect any later charges fly off automatically. Or do they predate the lender's security?

I accept the solicitors ought to be explaining all this! But I suspect any risks aren't as drastic as the mystery buyer seems to think.

IamNotAllowedToUseMyName

theartfullodger said:

Having bought two repos I expected issues and would expect again.  

Re "" Is it acceptable for a solicitor to offer no legal advice on the perils and pitfalls on buying a property: "" - did your instructions to the solicitor and/or contract specify that you should be legal advice?? (And what sort - e.g. "will your firm handle the paperwork" or "what issues should I expect"...)

In my experience there is often little or no paperwork or evidence on what is being bought and it's a gamble (which may or may no turn out good - or bad. ).  Bit like life.  Good luck!

The buyer is a naïve first time buyer who was recommended the solicitor by the estate agent (for a fee of £450+VAT I find). They assumed extra legal paperwork would be involved but were given no advice or indication on what that would be. As such I doubt there was anything said other than "Will you act for me purchasing this flat?" "Yes, give me your money." However, the solicitor's website (copy retained) states the importance of "expert legal advice" on purchases and so it is reasonable for the buyer to believe they were getting expert legal advice, which after all is the point of engaging a solicitor rather than an Internet conveyancer. Solicitors have a duty of care to their clients and they should establish that the client understands what they are and are not getting.

theartfullodger

Never use the solicitor recommended by estate agent (or vendor).

loubel

The solicitors were instructed to act on a conveyancing matter, not to advise on bankruptcy and repossession processes. It isn't necessary for the buyer to understand these in order to purchase the house but the solicitor will have checked that everything is in order. If the buyer believes that their solicitor is not competent to do so then they should switch solicitor rather than withdraw from the purchase. 

IamNotAllowedToUseMyName

loubel said:

The solicitors were instructed to act on a conveyancing matter, not to advise on bankruptcy and repossession processes. It isn't necessary for the buyer to understand these in order to purchase the house but the solicitor will have checked that everything is in order. If the buyer believes that their solicitor is not competent to do so then they should switch solicitor rather than withdraw from the purchase. 

I disagree. The purchaser wanted to buy the property outright and should not be expected to understand the nuances of law, or rather the solicitor should have qualified the purchase recognising the specific services required. It was obvious that this was a private buyer expecting to buy their own property, not a person engaged in the property business.

Put another way, do you need legal advice to engage a solicitor correctly? Have the solicitors acted in the best interests of their client if the client does not understand that they have not engaged the solicitors on appropriate terms and the solicitors have not pointed out that they will not have clear title at the end of the conveyancing process?

The initial quote made reference to additional costs that may apply including title defects.

loubel

But why does the buyer believe that they won't get a clear title? Their solicitor will have checked this.

Isthisforreal99

Did you pay them for legal advice (usually costly) or did you pay them to do the conveyancing?  Two very different things.

Sounds like buyers remorse and trying to get out of paying the fees incurred.