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F E Smith
F E Smith, Advocate
Category: Law
Satisfied Customers: 9777
Experience:  I have been practising for 30 years.
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Property developer purchased land with planning permission.

Customer Question

Property developer purchased land with planning permission. Both the developer and his solicitor failed to establish that he held clear title to all of the land. He subsequently built 4 property's. The new house I had agreed to purchase became the subject of a ransom strip. I had paid a deposit and was due to complete a few days later. My solicitor discovered the situation and advised the sellers solicitor that their client was in breach of contract. I own other property and had arranged to rent this to 5 tenants. My solicitor immediately notified the other party that we reserved the right to claim compensation for the duration of the breach and any damages incurred, including loss of rent. I am now acting in person in the small claims court and the seller's new solicitor. (His original solicitor has recently been shut down for dishonesty!) claims that his client was unaware that the property was to be rented. This is simply untrue. That accordingly there is no basis for a claim for loss of rent? It took 7 months to complete the purchase and in the meantime 2 of the 5 tenants were unable to wait. They found alternative accommodation. There are 4 witness statements in the bundle submitted to the court, including from the 2, along with 2 of the other 3 who did rent on completion. 1 of the 2, and 1 of the 3, will attend court in support of their witness statements. Statutory compensation was deducted from the balance payable for the period of the breach, but the solicitor would not agree to a reduction for damages.
Do I a have legal entitlement to claim for the loss of rent for the period of the breach?
Kind regards
Trevor Wood
Submitted: 1 year ago.
Category: Law
Expert:  Nicola-mod replied 1 year ago.
Hello,
I've been working hard to find a Professional to assist you with your question, but sometimes finding the right Professional can take a little longer than expected.
I wonder whether you're ok with continuing to wait for an answer. If you are, please let me know and I will continue my search. If not, feel free to let me know and I will cancel this question for you.
Thank you!
Nicola
Customer: replied 1 year ago.
Hello Nicola,I would appreciate a response.Thank you
Trevor
Expert:  Nicola-mod replied 1 year ago.
Hello,
We will continue to look for a Professional to assist you.
Thank you for your patience,
Nicola
Expert:  F E Smith replied 1 year ago.
Thank you. What is it that you want to know about this? Are you just asking about whether you would be entitled to claim rent loss?
Customer: replied 1 year ago.
Dear Mr/Ms Smith,The question is, Do I a have legal entitlement to claim for the loss of rent for the period of the breach?I purchased the property for the sole purpose of renting it. I had 5 tenants lined up to sign a shorthold tenancy agreement, (they have provided witness statements to support this fact), on completion of the purchase. The proposed rental was not discussed with the agents/vendor during the purchase process, as it was of no relevance to the purchase.Subsequently as a result of the breach of contract (ransom strip), as indicted in my original mail. The vendors solicitor is now suggesting that as the issue of renting the property was not discussed / divulged at the outset, that by consequence his client is not responsible for any loss of rent? My feeling is this cannot be right as, the day after the breach of contract, my solicitor handling the conveyance, wrote to the vendors solicitor notifying him that as a result of his clients breach of contract we reserved the right to recover statutory compensation covering the breach and damages for loss, ie additional legal costs, loss of rent etc.Does the vendors solicitors rejection have any basis in law?I await your reply
kind regards
Trevor Wood
Expert:  F E Smith replied 1 year ago.
Unless the solicitors will agree to stand aside, even a court application to remove them will not be successful unless you can prove that they have done something wrong and they are not acting in the best interest of the beneficiaries. It is true that the solicitors generally try to insert themselves as executors because then they also get paid for administering the estate but the court looks at it that your mother wanted these people as executors otherwise she would have changed the will or not made them executors in the first place and it is not for the court to overrule the decision. It has already been to court and been decided that the only reason for removing solicitors in circumstances like this is if the solicitors have not done their duty. The financial consideration of appointing free of charge executors or the family doing it themselves is not something the courts get involved in.I’m sorry that the answer is unfavourable for you.Can I clarify any points arising from this?Please do not forget to rate the service positive. It’s an important part of the process so but experts get credit for their time.Best wishesFES
Customer: replied 1 year ago.
Dear FES,With respect your reply makes no sense whatsoever to my question, which I have repeated! Please can you look at my original e-mail and reply to the question?Kind regards
Trevor Wood
Expert:  F E Smith replied 1 year ago.
I am sorry for this, it has happened a few times where the previous answer for another user has been picked up and pasted rather than the later answer.For you to claim any kind of consequential loss, (sometimes called pure economic loss) that loss must be “within the contemplation of the parties” when they entered into the contract. Basically, the sellers have to be aware before contracts are exchanged, that you are going to rent these properties and that if delay ensues, you will lose money. It is always better in writing but it does not have to be.If you were buying just one property they may be able to argue that they were not aware going to rent it out but if you are buying several properties, I think it would be very difficult for them to argue the same. After all, if you are buying 5 properties, you can only live in one of them and why would you buy them other than to rent them out or sell them at a profit. Either way, you suffer loss.The solicitor on the other hand is simply doing the best job that he can for his client because he is not, I am sure, going to admit that his client is at fault or at risk of having to pay you a large amount of compensation in respect of the rents.If however in spite of your best arguments and regardless of how good your case is, if the seller simply refuses to pay up you will have no option but to take them to court with all the inherent risks which that involves.I think you have quite a reasonable chance of bringing a claim but of course you never know what the defendant is likely to come up with in defence.Best wishes
Customer: replied 1 year ago.
Dear FES,I assumed this to be the case. The vendor was well aware that the property was being purchased for the use of others and that I owned other property and had no intention to live there. Reasonably, whether it was discussed at the time of purchase or not, he must have contemplated that it was purchased for the sole purpose of renting it.Thank you
Regards
Trevor Wood