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Michael Holly
Michael Holly, Solicitor
Category: Law
Satisfied Customers: 6935
Experience:  I have 20 years of experience as a solicitor in litigation and other areas
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Firstly, please excuse my extreme naivety and possible

Resolved Question:

Hi.
Firstly, please excuse my extreme naivety and possible stupidity on this subject.
I sold my family home 2 years through an estate agency. My solicitor had handled the sale/exchange of deeds/transfer of funds.
The property had a bank mortgage and a secured loan from finance company on it. I had declared these to the solicitor in our meetings before we handed over the keys/deeds etc.
Once the sale went through mortgage was paid as was the solicitor's fee and I moved on with the remaining balance paid to me
This is where I realise I have been very stupid - in not settling the other debt. I know there were some changes made to the loan a few years before, so I thought that because it wasn't paid by the solicitor with the proceeds of the sale that it may have been swapped to a personal loan (unsecured).
I have continued to pay the loan through direct debit and contacted the loan company to enter into discussions to refinance using my new property or re apply for another loan, they spoke to me on the phone but did not begin any process and have since sold my debt on to another company.
I have tried to contact the new company who have said they will not enter into any discussions on refinancing
My solicitor has now contacted me today to ask for the loan details and a contact number for the secure loan company. They have said it is a very urgent matter as the loan was secured on the property and the loan company will
I am now very anxious that I am in a lot of trouble. I do not have the money at this moment to settle the debt owed to the company although I could possibly get it by the end of this year.
I believed that in order to sign over deeds to another individual, all secured debts had to be settled or it would not go through at all. Is this something that was my responsibility to settle or did it fall on my solicitor to pay this debt off before signing over the deeds ?
I remember declaring the debt to the solicitor but I have no written proof
I am wondering where I stand legally ? What would be my next course of action ?
Thanks
Submitted: 1 year ago.
Category: Law
Expert:  Michael Holly replied 1 year ago.
This is very strange. To sell the property any mortgage and any loan secured by a charge would have to be paid off. This is done by the mortgage company and the loan company agreeing to remove the charges subject to an undertaking from the solicitors that the proceeds are applied first to pay off the mortgage and second to pay off the charge. A receipt is provided by the mortgage company and the loan company and then you get what is left. It appears the charge protecting the loan was removed, no purchaser's solicitor would accept otherwise and you were accounted to.There are 2 possibilities. The loan was not secured, this is highly unlikely as it would not affect the transaction and they would be chasing you not the solicitor. Second the loan was secured the solicitor undertook to pay the monies due under the charge and then, for some reason , paid less than the full amount due.The loan company can pursue you as a debt. The charge on the property will have been removed . Assuming you did have the money under the loan you have to pay any balance but not interest from the date your solicitors ballsed it up and it should have been paid.I would go and see the solicitors and ask them what is going on.Best regardsMichael
Customer: replied 1 year ago.
Hi Michael.Thanks for your reply.I have given my solicitor the contact details of the loan company and they are going to follow them up. In your experience are the solicitors liable for the debt if they handed over the deeds without settling the debt ? I heard that this is sometimes covered by liability insurance ?I can continue to pay the monthly repayments but I will not be able to pay once lump sumAny help you can give would be great.Regards
Mark
Expert:  Michael Holly replied 1 year ago.
Dear *****Thank you for your reply.The solicitors would not suddenly become liable for the debt as you borrowed the money and had the benefit of it.However, they will be liable for any additional costs incurred by way of interest or financial penalties on the loan if they were the ones who were negligent here.If the error was by the loan company who may have given the wrong figure etc then they also cannot charge any additional penalty or interest beyond the date when the loan should have been paid off which is the date the sale of the property completed.Best regardsMichael
Customer: replied 1 year ago.
Thanks Michael.I understand that the money repayments are my responsibility. However I am just concerned that they will ask for the full amount to be repaid and I cannot afford that, at this time.In your experience what would they course of action be ? A second loan on my new property or some kind of continuing repayment plan ?Thanks
Expert:  Michael Holly replied 1 year ago.
Step back for a moment, can you go through the paperwork at the time of the sale and see what happened regarding this charge.I think you paid an amount , either your solicitors or the loan company messed up the amount.You will not lose your new home over this , what you need is some clarity about what went wrong, how much they say you owe, and then you and I need to speak some more.Michael
Customer: replied 1 year ago.
Hi Michael. Sorry for not replying.Hi DebbieI have spoken to Skye Loans this morning and they have said that they will not be removing the charge from Orchard Close. They do not provide any lending facilities or property porting facilities.At this time I am in no position to obtain any unsecured borrowing.They have asked me to pass this information on to the solicitor. They have replied with the following." This raises a difficulty as the charge must be released from the property as you cannot have a property charged which you do not own. Skye Loans and their solicitor will not be able to enforce their charge should you default and I am sure their solicitor will be advising them of same, and indeed we have contacted them directly and await their written response.Did they mention to you calling in the loan now? It is untenable for them to continue as they have knowing that you do not own the property and I await their response detailing how they wish to proceed as they cannot have a charge on a house you are not the registered owner of .Could you provide me the name of the person you were dealing with?As per my previous email as Skye are unwilling to provide unsecured borrowing your financial advisor should be consulted without delay. They will be able to advise you on how to raise the balance owing to discharge the sum owing to Skye Loans by way of other financing options so that the Skye Loans charge can be immediately removed. I note you have indicated you are unable to raise unsecured borrowing and wondering if you have sought advice on this? I can give all the details we hold to your advisor directly if you would prefer?I look forward to hearing from you by return
"I am concerned that I may not be getting the true picture of what is going on as my solicitor's interests seem to be clearing the amount as quickly as possible.I cannot afford to take out any more unsecured lending and the transfer of the land deeds in my new house are in the process of being handled by the same solicitor.Any advice would be great.
Expert:  Michael Holly replied 1 year ago.
The position is that there is still a loan secured on the property you sold.I do not know how exactly the solicitors who acted on your sale managed to make a mess of it but they did.The net result is that you the contract of sale has been breached. It is in both your and your solicitor's interest to get this sorted.I appreciate you may not be able to get another loan to simply replace it but perhaps you can roll it up in a new or adjusted mortgage on your new property.Best regardsMichael
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