My solicitor has let me down – what do I do now?

Reply to the comment left by "Mark Alexander" at "07/05/2014 - 12:19":

First stage would be to look at exactly what the instructions were, then see if they were complied with, and finally if not why not?

This would normally be done by a 15 min free telephone consultation, then if the case has merit we would have a fixed fee conference (£250+vat) followed by written costed strategy for progress, which could include no-win no-fee if the case was strong enough. There is no obligation to go further at either stage, but at least Linda would know where she stood.

Hi Sally,

The mortgage had been promised in writing, was raised against another property and was small enough that a bridging loan was easily affordable from the income while we sorted something else out. The bank only wanted security over the new property to enable us to increase our portfolio again in about 6 months time.

I had given this reasoning as the reply to her concerns. By the 6th day after the deadline the only thing we needed was the part of the searches and the valuation in writing. The valuer had sent me an email confirming that he was happy with the value of both properties.

[I an mot a lawyer]
Were your instructions to proceed with exchange written or oral?

If oral, then may be hard to prove anything.

If written then it seems to me that you may have a case.

I always follow up an important conversation with an email or letter stating my position and what I understand the other party's position to be. This provides a record and allows the other party to correct any misunderstanding on my part.

I have often seen on applications that the lender will also use the buyer's solicitor. It's not a conflict of interest, surely the solicitor was right not to proceed without the correct documents in place which was clearly beyond their control. What if you had exchanged and the lender lowered their offer because of the survey (as has happened to me). You would have had to find the difference from your own funds. Maybe even for the whole purchase price if the bank withdrew altogether before a firm offer was made. You mention directors, is this a company purchase?

I think the searches may be a red herring, it would be the valuation, without it there was not a firm offer from the bank and the solicitor is right not to have proceeded. How was the bank ready if the valuation was not in? Not possible. An email from the valuer is not an offer from the bank. Also a bridging loan is something you have to apply for beforehand not say "oh we'll have one of those" when all else fails as both loans have to be documented and formally offered. The eventual loan then becomes a remortgage and gets even more complicated. It sounds like you are annoyed that you missed out on a good deal, better luck next time, do a bit more homework. I wonder why the quick sale was necessary, maybe in the fullness of time you will see you had a lucky escape.

And maybe the successful bidder was a cash buyer?

The key comment appears to be in the email from your solicitor "As I act on behalf of your lender" - I'm assuming that you were getting 'free legals' by sharing a solicitor with the lender. This normally works ok, until there is a (rare) conflict of interest and might explain why the solicitor was unwilling/unable to accept your instruction to proceed without having all the documentation in place.

However, you also appear to some grounds for complaint due to the time taken to complete the search/survey. Ask for the details of the Senior Partner and also their Designated Complaints Handler (also available from the Solicitors Regulation Authority on 0870 606 2555) and approach them first. You'll need to do this anyway, in order to complain, and it's far more cost effective than engaging with barristers at this stage.

Hi Puzzler,

It is all being done via a limited company. The valuer had already confirmed to me in an email that he was happy with the valuations. We were looking for a total of £150,000 secured over 2 properties valued at just under £600,000. We actually only needed £100,000 to complete and I could have had an overdraft extension if needed, but in any case, by day 6 everything was agreed in email, the only thing outstanding was the part of the searches. As I said, even the bank manager said the actual paperwork is needed on draw down not exchange. The quick sale was to justify the discount of £50,000. Also I was pushing for this because I knew I "had" a good deal and was concerned that someone could step in and gazump me.

To Sustainer,

I instructed my usual solicitor, the person who said “As I act on behalf of your lender” was her holiday relief. So no free legals. Sadly the solicitor I normally use is the senior partner. Thanks for the info re SRA, it makes sense to contact them first.

To Mark,

Thank you for your help. I will speak to the SRA first and then give you a call. I'm back in the UK on Tuesday.

Thank you everyone for your comments, it's all helping me to clarify my thoughts.

Linda
I don't want to sound unsympathetic but I think you need to be clear: did you INSTRUCT your solicitor to exchange or did you ASK your solicitor if you could (safely)* exchange? It is not unknown for clients (declaration of interest: I am a conveyancing solicitor) to blame the solicitor if things go wrong and to "recollect" a different version of events.

*see my earlier post

Step back for a moment and consider. Just suppose the mortgage had not gone through and you had been unable to complete and had lost the deposit. You might then have said to the solicitor: "You didn't warn me! I asked if we could exchange and you went ahead and did so. I therefore assumed everything was in order." I am not saying that would have been YOUR response, just that a client in your position might have acted like that. The solicitor did not know you well and so could not judge. The solicitor was, I expect, concerned that the firm would be at risk of a substantial claim for negligence if they exchanged. The comment about also acting for the lender is a bit of a red herring, in my opinion.

Conveyancing solicitors need to operate cautiously so that clients do not get themselves into trouble. If you had clearly told the solicitor you were aware of the risks and accepted that you might lose the deposit, it might be a different matter.

If you still feel aggrieved I recommend you take legal advice and get a detailed opinion on all the facts to see if there is a case against the solicitor.

Reply to the comment left by "Ian Narbeth" at "12/05/2014 - 09:09":

Excellent advice Ian.

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SRA guidance on acting for borrower and lender;

on the grant of a mortgage of land only where:

(a)
the mortgage is a standard mortgage (i.e. one provided in the normal course of the lender's activities, where a significant part of the lender's activities consists of lending and the mortgage is on standard terms) of property to be used as the borrower's private residence;

(b)
you are satisfied that it is reasonable and in the clients' best interests for you to act; and

(c)
the certificate of title required by the lender is in the form approved by the Society and the Council of Mortgage Lenders.

This is only the regulatory side, and is not decisive in assessing if the solicitor was negligent. It is an illustration of the general undesirability of acting for more than one party in a deal, especially where their interests can easily and rapidly diverge and conflict.

Reply to the comment left by "Ian Narbeth" at "12/05/2014 - 09:09":

Hi Ian,

As the deadline approached I spoke with the solicitor who went through all her concerns about what would happen if the mortgage offer didn't come through in time and the searches weren't good. We the directors had a telephone meeting to check how we all felt about the situation. It was decided that we did want to go ahead and accept the risks. I spoke to the solicitor to explain why we felt we would prefer to exchange before the things she wanted were in place as we could have completed without the mortgage in place and sorted the rest out later. The bank confirmed that if that happened they would just change the wording on the offer letter and it would cause one days delay.

By day 6 after the deadline (Easter was in the middle of this) I emailed the solicitor as the offer letter from the bank was now in .... "so can we now proceed to exchange please? I understand your concerns and now feel that we have reasonable safeguards in place."

As far as the searches seem to still be her problem here, they were instructed on the 18th, I emailed on the 7th .... ".How is the purchase progressing? The bank want to know have you done the searches yet?".  On the 9th I asked do I need to put any money in their account (they did have some on account for one of our other companies) and on the 10th she emailed me back with ..... "Yes please for searches -£200." The money was transferred immediately.