Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • scd3scd4
    • By scd3scd4 14th Jan 20, 1:31 PM
    • 1,148Posts
    • 1,012Thanks
    scd3scd4
    Solicitor with-holding money?!
    • #1
    • 14th Jan 20, 1:31 PM
    Solicitor with-holding money?! 14th Jan 20 at 1:31 PM
    Ok, I will try to keep this short.


    My daughter purchased a flat. However for some reason the sellers solicitors who blame the management company of the flat did not insure the service bill was paid.


    Now the real issue is the seller has migrated to Germany and does not respond to emails. The sellers solicitors will not release the 300 they are holding for this reason for some unknown reason.........8 months later. The total bill is 570.




    Any advise, welcome. Thank you.
Page 1
    • cattie
    • By cattie 14th Jan 20, 1:52 PM
    • 8,172 Posts
    • 5,688 Thanks
    cattie
    • #2
    • 14th Jan 20, 1:52 PM
    • #2
    • 14th Jan 20, 1:52 PM
    What has your daughter's solicitor had to say about this? That would be my first port of call for advice.
    The bigger the bargain, the better I feel.

    I should mention that there's only one of me, don't confuse me with others of the same name.
    • davidmcn
    • By davidmcn 14th Jan 20, 2:03 PM
    • 14,413 Posts
    • 16,852 Thanks
    davidmcn
    • #3
    • 14th Jan 20, 2:03 PM
    • #3
    • 14th Jan 20, 2:03 PM
    Now the real issue is the seller has migrated to Germany and does not respond to emails. The sellers solicitors will not release the 300 they are holding for this reason for some unknown reason
    Originally posted by scd3scd4
    This bit's a bit garbled, but surely the reason, as you've said, is that they don't have instructions from their client to release the funds? What was agreed in her contract about these funds?
    • scd3scd4
    • By scd3scd4 14th Jan 20, 2:15 PM
    • 1,148 Posts
    • 1,012 Thanks
    scd3scd4
    • #4
    • 14th Jan 20, 2:15 PM
    • #4
    • 14th Jan 20, 2:15 PM
    What has your daughter's solicitor had to say about this? That would be my first port of call for advice.
    Originally posted by cattie

    I email and talk to him numerous times a month.


    He's reply is they rather don't reply or say they are waiting on their client to pay. Its like walking uphill in treacle.
    • scd3scd4
    • By scd3scd4 14th Jan 20, 2:23 PM
    • 1,148 Posts
    • 1,012 Thanks
    scd3scd4
    • #5
    • 14th Jan 20, 2:23 PM
    • #5
    • 14th Jan 20, 2:23 PM
    This bit's a bit garbled, but surely the reason, as you've said, is that they don't have instructions from their client to release the funds? What was agreed in her contract about these funds?
    Originally posted by davidmcn

    Its standard practise to pay all funds before the contracts are exchanged. That's in the contract


    Why would they need instructions. That's the whole point of with- holding the money from the seller. For this very situation


    So lets say the sellers says. "I don't want to pay what I owe".....then what? Now that's more than a bit garbled.
    Last edited by scd3scd4; 14-01-2020 at 2:30 PM.
    • davidmcn
    • By davidmcn 14th Jan 20, 2:25 PM
    • 14,413 Posts
    • 16,852 Thanks
    davidmcn
    • #6
    • 14th Jan 20, 2:25 PM
    • #6
    • 14th Jan 20, 2:25 PM
    Its standard practise to pay all funds before the contracts are exchanged. That's in the contract

    Why would they need instructions. That's the whole point of with- holding the money from the seller.

    So lets say the sellers says. "I don't want to pay what I owe".....then what? Now that's more than a bit garbled.
    Originally posted by scd3scd4
    So the contract doesn't say anything about the retention?
    • scd3scd4
    • By scd3scd4 14th Jan 20, 3:09 PM
    • 1,148 Posts
    • 1,012 Thanks
    scd3scd4
    • #7
    • 14th Jan 20, 3:09 PM
    • #7
    • 14th Jan 20, 3:09 PM
    So the contract doesn't say anything about the retention?
    Originally posted by davidmcn

    No idea to be honest and getting any real intelligent answers is hard work.


    However money is owned on the service charge while the seller lived there and should have been paid. None of this is in doubt or contested. They all blame each other but the money owed is on my daughters statement from the management of the flat.
    Last edited by scd3scd4; 14-01-2020 at 3:12 PM.
    • TBagpuss
    • By TBagpuss 14th Jan 20, 4:39 PM
    • 7,763 Posts
    • 10,091 Thanks
    TBagpuss
    • #8
    • 14th Jan 20, 4:39 PM
    • #8
    • 14th Jan 20, 4:39 PM
    I think your daughter need to talk to her solicitor.

    - Did the sellers solicitors give an undertaking to hold the funds to her solicitors order, or to discharge the outstanding servic charges?
    If so, they need to pay whether or not they have the money freom their client.

    -Did they state that they were holding 300 from their client ? If so, it is *likely* that they need to pay this over whether or not they have instructions from their client.

    - Id her own solicitors did not obtain appropriate undertakings, did they advise your daughter that they had not got them? If not, and assuming that she didn't tell them to go ahead anyway, then she might have grounds to complaint them and ask that they make a payment.

    In practical terms , she is almost certainly going to have to pay the service charge and she may or may not be able to get the money, or part of it, back.

    I would suggest that she asks her solicitor to set out in writing to her what caused the issue, who, in their view is responsible and on what basis, and what they recommend she does next.
    All posts are my personal opinion, not formal advice Always get proper, professional advice (particularly about anything legal!)
    • Tiglet2
    • By Tiglet2 14th Jan 20, 8:07 PM
    • 470 Posts
    • 438 Thanks
    Tiglet2
    • #9
    • 14th Jan 20, 8:07 PM
    • #9
    • 14th Jan 20, 8:07 PM
    I'm assuming that the seller's solicitor is holding a 300 retention, pending any shortfall in the final accounts. Usually the seller's solicitor would work out any apportionments due/owed to the date of completion so that there would be no shortfall. Be aware though that if only 300 was held back, you will be very unlikely to be able to claim anything above this.

    If your daughter sends the final accounts from the managing company to her solicitor along with receipts to show that she has paid the invoices for a period when the property was owned by the previous owner, then the seller's solicitor is obliged to release the retention to your solicitor to reimburse her. However, this can take a long time, so your daughter would need to pay the invoices before claiming the retention.

    Also, what was put into the contract? Usually there is a "Rider" attached to the contract to state that if there is no claim for the retention for 12/18 months following completion, then the retention can be returned to the seller. If this period has already passed, the retention may have been released back to the seller and your daughter will no longer have any claim on it.

    Your daughter needs to write to her solicitor to set the wheels in motion, but her solicitor will need the final accounts as evidence to show the seller's solicitor. Therefore, your daughter will need to find out from the management company when they are finalised/sent out.
    • scd3scd4
    • By scd3scd4 15th Jan 20, 11:04 AM
    • 1,148 Posts
    • 1,012 Thanks
    scd3scd4
    The accounts were given long ago.

    They were told within weeks money was owned. It's now 8 months since the exchange. Plenty of time to sort out basic admin in my view.

    The debt has been paid by my daughter but shows clearly on their invoice it was for the previous owner and the dates.

    In what world should my daughter pay others debt, that's why she pays for the service of a solicitor.

    Of course, my daughter did not say exchange while owning money. She is a pediatric nurse, she like me has no idea of the working of selling homes. The simple facts are they should not have exchange while owning money.

    Her solicitors have told her in emails and over the phone that the seller's solicitors say they have a 300 retention.

    Thank you.
    Last edited by scd3scd4; 15-01-2020 at 11:13 AM.
    • Tiglet2
    • By Tiglet2 15th Jan 20, 1:34 PM
    • 470 Posts
    • 438 Thanks
    Tiglet2
    Final Accounts are a year in arrears. Check what year the accounts you say were given long ago, related to. It is very unusual for retentions to be claimed or released within 8 months of exchange (completion).

    Your daughter's solicitor has to send evidence/accounts to the seller's solicitor to prove that monies are owed to your daughter. The seller's solicitor will not release monies until Final Accounts are received for the year 2018/2019 or even 2019/2020 depending on which accounting period the purchase fell into.

    The seller's solicitor should have done apportionments on completion as far as they are able without final accounts, to show "x" amount of days at , to be retained out of the sales proceeds.

    Just because your daughter's solicitor has confirmed that 300 is held by the seller's solicitor, doesn't mean that they are going to release it to you. Check the terms of the contract. Check with the Management Company when final accounts are/were issued (they have up to six months from the end of the accounting year to produce the accounts).

    Of course they can exchange. That's what happens in the vast majority of leasehold purchases. As already mentioned Accounts are always produced in arrears, therefore they do not know who owes what at the point of completion, that's why a retention is suggested to cover any possible shortfall and apportionments are made for service charges based on the accounts produced for the previous year, but not necessarily any major works as there is usually a sinking fund for this, but the contract will state how long they can keep the retention for.
    • scd3scd4
    • By scd3scd4 15th Jan 20, 8:30 PM
    • 1,148 Posts
    • 1,012 Thanks
    scd3scd4
    No party is arguing that my daughter is owned money. They have had the evidence to prove it.

    The issue is the seller has moved to Germany and told he's solicitors to go stuff themselves. Of course, they don't want to pay the difference.

    We don't need or want them to pay it to her. They can pay it to the management company.

    The seller's solicitors should have done many things but they never. Hence the issues.

    The service chargers are done every six months, not yearly.
    • Tiglet2
    • By Tiglet2 15th Jan 20, 11:49 PM
    • 470 Posts
    • 438 Thanks
    Tiglet2
    I didn't say that any party was arguing whether or not your daughter is owed money. I'm sure she is owed money, but the point is that there is a process to follow and both sets of solicitors are bound by the contract and retention clause to follow the process, which means they don't just release monies as and when you make demands, it has to be backed up by published final accounts for the year.

    Your daughter's solicitor must have negotiated a retention (300) to be held by the seller's solicitor for a certain amount of time (a year? 18 months?). The time limit is to allow the Management Company to finalise, publish and produce their Final Accounts (not to be confused with service charge statements every six months, which are estimated and not actual).

    That Final Accounts when produced (later this year/next year??) will be sent to your daughter as she is the leaseholder. Your daughter can then send it to her solicitor, who then requests that the seller's solicitor releases part (or all) of the retention to cover the shortfall indicated in the final accounts for the period when the seller was still the owner of the property. NOTE: Service Charge statements done every six months are NOT Final Accounts).

    Speak to your solicitor again, to ascertain the terms under which the retention is being held. Speak to the Management Company to ascertain when Final Accounts are published.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

3,763Posts Today

6,773Users online

Martin's Twitter