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Alex J.
Alex J., Solicitor
Category: Property Law
Satisfied Customers: 3493
Experience:  Two years conveyancing experience.
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I need to get some quick advice.I look at purchasing at a peice of land with a view of building 2 houses. I made a offer which was accepted by the estate agent , subject to planning permission which I would apply for. I engaged a lawyer and agreed to a 10k deposit. I never produced any proof of mortgage of proof of funds to pay. Fact is I can't get a mortgage. My lawyer is saying I am liable for 10% and I now can't get hold of him as he is on holiday. I am at a loss.I am a novice to all this and want to know what I could have signed or agreed to. Is there any legal steps or anything that my lawyer should not let me do so I don't sign my life away. The estate agent I getting very aggressive with me and I am scared I have now committed to buy and don't have the mortgage. Please help
Submitted: 2 years ago.
Category: Property Law
Expert:  Ash replied 2 years ago.

Alex Watts :

Hello my name is ***** ***** I will help you with this. Please note that I am a working Solicitor and may be on and offline as I have to attend Court and meet with clients, even at weekends. As such you may not get an instant response when you reply, but rest assured I will be giving your question my immediate attention upon return You do not need to wait here as you will get an email when I reply.

Alex Watts :

Just so that I am clear, you agreed to 10%? Did you sign anything agreeing to 10% please?

JACUSTOMER-vq0apnjl- : That's my issue. I instructed my lawyer to put down 10k. I have that listed on letter which list our the sale price stamp duty etc and it also says 10k deposit. The lawyer was so slow and was even on holiday when I signed a document. I had to rush into the office to we his assistant and to be honest I just signed something and have no idea what it was. So assuming I did am I in trouble. I have only paid 10k. So if I did sign 10% in error and I know the sale won't happen because I can't get a mortgage will I have to pay the deposit balance.
Alex Watts :

Did you not read what you had signed? When did you realise it was 10%?

Alex Watts :

Have you got other properties please?

JACUSTOMER-vq0apnjl- : Yes I do have
JACUSTOMER-vq0apnjl- : Yes I have other property's
JACUSTOMER-vq0apnjl- : I did not read it and I still don't know it even is 10% I want to know what the process is and what my liabilities are. If it was 10% then I did not see it. All I am going is the lawyer told be I will be liable for the 10%. What I can not work out is I though that my lawyer would have needed to see or have in an account the 10% before he committed it to the other side. I nee to know how it all works
JACUSTOMER-vq0apnjl- : May I ask what is happening ? I have not received any reply to my last message.
Customer : I really wanted an answer quickly. You are never on line. I would
Customer : Like to revert this to someone on line.
Expert:  Clare replied 2 years ago.
Hi
Have contracts been exchanged?
Clare
Customer: replied 2 years ago.
I don't know that's what I am asking advice on.. So your are clear I want to know what needs to be provided so contracts can be exchanged. I can not get hold f my lawyer. He is being avasive
Expert:  Ash replied 2 years ago.
Did you not read it before you signed it as you have purchased other properties please?

Customer: replied 2 years ago.
I did not read it did not read it. I more wanting to know the legal process. I still don't know I have signed 10%. I am worried I have.
Expert:  Ash replied 2 years ago.
Ok - you need to check the contract.

If you have signed a contract stating the 10% deposit is NOT refunable then you can't have it back.

If you have signed a contract and it is silent whether or not it is refundable then you CAN claim it back

Can I clarify anything for you?

Alex

Customer: replied 2 years ago.
You will see in my initial question I say that I have not paid 10% I thought it was 10k deposite. I am worried that I have signed 10% and they can chase me for the balance of the deposit. What I am asking is does my lawyer have and responsibility to ensure I don't sign up for things I can not pay or deliver. I signed this I a rush as he was late producing so I just signed biling in 1m trusting what he was doing. Is that ckear
Customer: replied 2 years ago.
Can you please reply. I am desperate to find out where I stand. I think my lawyer is playing games with me
Expert:  Ash replied 2 years ago.
The reason there is a delay is that you keep reporting which means it goes to the back of my list.

Does the lawyer have responsibility to you? No.

He is not the bank, His instructions are limited to the contract, otherwise he would be expected to see your income, evidence of it together with expenditure, there has to be some personal responsibility.

But you should check the contract to see exactly what it says about the deposit and whether the full sum us due or payable,

Does that help?

Alex

Customer: replied 2 years ago.
Ok. Let's assume the contract said 10% deposit which is 62k. I only paid 10k to the lawyer. I did not pay the balance of the deposite. I also did not show the lawyer an proof I had the full 10%. So if I did not show him proof that I could pay both the full amount or the deposit why would he exchange with the other party ? Surly he must only exchange when he sees I have the means to pay? That's what I really need to know. Also he had told me that he has handed over the 10k. Why would he do that if the the deposit was 10% 62k

Expert:  Ash replied 2 years ago.
Did you authorise him to do the work?

Customer: replied 2 years ago.
Yes we did. On the 24 February he wrote to us and said until he cites the 62k he is unable to exchange contracts. We never gave him the 62k only 10k. In the contract is clearly says on the form deposite 10k but he wrong some thing in the special conditions about the deposit being 10%. What we can not understand is the 1st advise said he would not exchange contracts until he had the 62k. So why did he exchange with out it. Also the form say 10k and the special conditions say 62k.

My concern is that he is best friends with estate agent and I fear he is not working on our behalf. No evidence
Customer: replied 2 years ago.
Relist: Incomplete answer.
I am am not sure I am explaining myself.
Expert:  Ash replied 2 years ago.
The reason you are experiencing a delay is that you relist it so it drops off my list.

Did he tell you he was exchanging please?

Customer: replied 2 years ago.
I signed the contract. But I don't Understand the process andunderstand what exchange means. I though I made it clear it only a 10k deposit But the contract said 10k. Special conditions said 10%. I am lost on the process I thought he could only exchange if he had the full deposit. And in my eyes that was 10k. He is saying he did it with the 10k on the understanding tact the balance 52k would follow. So I assumed my liability for not completing was just 10k. Now he is saying they can sue me for the other 52k.

The thing is the vendor said they wanted 10% I told my lawyer I would only pay 10k. So my lawyer wrote to me and said he can not exchange until he has the 10%. Then he went on holiday. Nothing happened for 3 weeks. I pushed the company and his assistant put the contract together. The contract green form law society formula said deposited 10k. I signed that but the special condition which I can see a signiture on had this part saying in the event of the deposite being paid to the seller solicitor on exchange of contracts being less than 10% of the purchase price the full deposit of 10% shall remain outstanding and shall be immediately payable by the buyer to the seller solicitor if the buyer defaults under the terms of the contract.

This I why I am worried. This was never explained. More over written advice before that said they would not exchange unless they had it. I did not read the special conditions only the Contract from cover that said 10k. I feel conned and let down.

When the lawyer retired from holiday he said he would not have key me sign it if he had been there

Expert:  Ash replied 2 years ago.
Ok. Then the solicitor is liable.

If he did not tell you he was exchanging you can sue for breach if contract. If he did not explain the exchange to you he is in breach of contract. By not checking you could afford the mortgage he is not in breach of contract,

But if you did not know what you were signing then although you have purchased several houses before and I assume must know the process he is liable.

Can I clarify anything?

Alex

Customer: replied 2 years ago.
So if the front page of the contract says 10k and the special conditions say 10% why should I take the worst case. Which one takes presidence. What is getting to me is his advice 1 month before clearly said he need the 10% deposite before he could exchange. So I thought because I had not given him the 62k he would not exchange. How do I know if he exchanged. I do t understand what that means.

Please explain why the deposit can be split in two? I thought deposit was one amount. And that was my loss if I did not complete. If I am still liable for the full amount then why would I a agree to pay anything?

I need a bit more assurance. How do I prove he did not explain if the contract says in the special condition what I just told you. How do you read that clause. Is that normal. What two stages of deposit
Expert:  Ash replied 2 years ago.
They conflict it would be the lesser one. I do not know why the deposit is split, it sold not have been. You may be liable if the contract says you are.

Alex

Customer: replied 2 years ago.
Why don't you know why they are split? What do you mean I may be liable if the contract s says I am. I need a bit more than that. I have asked you to explain the normal legal process.

Can you please throw this our to other advisers please.
Expert:  Ash replied 2 years ago.
You haven't given the exact clause or the contract. Therefore I can not properly give you an answer.
Customer: replied 2 years ago.
Yes I did I wrote in the event of the deposite being paid to the seller solicitor on exchange of contracts being less than 10% of the purchase price the full deposit of 10% shall remain outstanding and shall be immediately payable by the buyer to the seller solicitor if the buyer defaults under the terms of the contract.

I can read the contract. That's not what I am asking. I want to know the regulations in term of the lawyer exchanging when they did not have the deposite funds.

Please could you review what I have asked because I think we are goin around in circles here. I don't want your interest action of wording I want to know protocol, process and obligation of my lawyer.
Expert:  Nicola-mod replied 2 years ago.
Hello,

It seems the professional has left this conversation. This happens occasionally, and it's usually because the professional thinks that someone else might be a better match for your question. I've been working hard to find a new 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 2 years ago.
Very disappointing and frustration this time.
Expert:  Nicola-mod replied 2 years ago.
Hello,

We will continue to look for a Professional to assist you.

Thank you for your patience,
Nicola
Expert:  Clare replied 2 years ago.
Hi
I will do my best to unpick this for you.
can I tell you what I understand about your position to date
You have agreed to purchase a property.
You offered a £10,000 deposit and you have paid that to your Solicitor and signed a Contract.
You are not certain what has happened since then but are worried as you no longer wish to go ahead with the transaction and are concerned that you will be liable for the full 10% of the purchase price.
Does that sum it up?
Clare
Customer: replied 2 years ago.
Not quite

I more looking for process advice. I was always lead to understand that exchange of contracts could not happen in my lawyer was not in possession of either a mortgage offer or at least the do site which could be lost if I fail to complete.

My issue is I put and offer in on a lot of land. I made the offer subject to planning permission. I contacted a lawyer to work out the deal. I told him all I could risk was 10k. The other side wanted 10%. We did not have an issue with this but we still need to a) realise the 10% deposite b) confirm we get the funds to pay for the whole property. My lawyer wrote to us and said he could not exchange until he had the 10%. Then he went on holiday and everything stopped. His assistant then put the contact together and I was out of the country so my brother had a PoA. On the CONTRACT which looks like a regulated form it said deposit 10k. But in the special conditions it said 10% .we did not know what was in it until we was asked go in to the office and sign because the other party was going to back out and sell to someone else.

I told my brother to go in and sign it. The 10k was already with my lawyer. I did not see any risk because I knew my lawyer had told me he could not complete until he had deposit funds. Given he had my 10k I though that was the deposit risk. My brother jiust signed where he was told.

Now we know we can not get the funds so have told the other side. They are now chasing us for the balance of the 52k deposit and we are shocked.

In my mind I have always thought that my risk is the 10k. Now it turns out that they can chase me for the whole sum not just the deposite.

What gets me is that the front main for clearly said 10k the special conditions said
in the event of the deposite being paid to the seller solicitor on exchange of contracts being less than 10% of the purchase price the full deposit of 10% shall remain outstanding and shall be immediately payable by the buyer to the seller solicitor if the buyer defaults under the terms of the contract.


Customer: replied 2 years ago.
Relist: Answer came too late.
I have been 2 days trying to get someone on line long enough
Expert:  Alex J. replied 2 years ago.
Hi,

Thank you for your question.

I can start by giving you some practical suggestions:

1. If the estate agent is being aggressive, then write to the estate as follows:
- Say under S.40 of the Administration of Justice Act 1970 it is criminal offence to harass someone for money so as to cause alarm or distress;
- Say that your solicitor is currently on holiday and holds your files on this, and until you have had the opportunity to take professional advice from the adviser that assisted you in the purchase you will not be bullied into taking any action.
- Say if they continue you to chase you, you reserve the right to report them to trading standards. www.tradingstandards.gov.uk/

2. You need to get hold of the solicitor. If they have not advised you properly of the consequences of exchanging contracts, then potentially they have been negligent and you will be able to sue them for your loss. www.legalombudsman.org.uk/ The legal ombudsman will be available to resolve any disputes with your solicitor.
What I suggest you do is get the solicitor to explain themselves on their return. If their response is not satisfactory, get your files from the solicitor and go and instruct another solicitor to wrap things up with the property and give you an independent opinion on whether you were properly advised.

It may be that you will have to forfeit the deposit and then take action against your solicitor to recover the money for failing to advise you.

Did the solicitor give you a property report?

I look forward to hearing from you.

Kind regards

AJ


Customer: replied 2 years ago.
AJ

You are the 3 person to handle my question. Can you view all my responses?

The history of events as I listed out has already go passed. I want advice on based on the story I have explain if you thing they have been negligent. I am aware I need to see solicitor that why I asked the question hoping for advice on. You upon there return? They returned months ago.

1. Was the solicitor breaking the rules by exchanging contracts without having the 10% deposit? Please remember he wrote to me a month before saying he needed the deposit in his bank before we could exchange!

2. Does lawyer need have proof of funding before exchangeing contracts.

3. The law society formula for had 10k deposit only. The special conditions said 10%. The lawyer exchanged without having the 10%. I was under the impression my maximum liabilty was the 10k. Now they are chasing me for the 52k balance of the deposit. Why can they 1st insist to cite the deposit and say we can't exchange until that happens, then go and exchange when they only had the 10k. My point is I thought the deposit was 10k not 10%. Was the allowed to exchange with it? Because they are now saying I am liable for the balance of the deposit of 10%. I don't have it. I can get the funds to buy the land now that why I have backed out. I would have never risked 62k. But 10k was worth the risk.

4. Basically I want to know what these lawyers was supposed to do and are they any rules preventing them from exchanging contracts say for instance I don't have proof I can pay it.

Sorry but I am going around in circles with this. Each of you appear to miss the point I am trying to make. So you are clea r this is all passed tence. I have confirm I won't push through. I paid 10k deposit and because the CONTRACT said 10k I did not take any notice of the special conditions because I always maintained I could only afford to lose 10k when the other side wanted 10% 62k my lawyer wrote to me and said he needed to see the 62k before he exchanged. So on that basis I said no I only want 10k, 10k was written in the contract front cover but the special conditions had 10%.

In a nut shell I assume that upon exchange I would only be liable for whatever I had given the lawyer. I had no idea that after exchange I had to pay a 52k payment to make the deposit 10% of the sale price.

Is this clear now and has any rules been broken? And w are they allowed to fundamentally change the deposite amount stated on the contract in the special conditions.
Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

I will answer each point in turn:
1. No the solicitor would only need the 10% deposit in their account if they had given a solicitors undertaking to pay it. You are still contractually on the hook for the deposit on exchange of contracts. What the solicitor should have done is reported to you on the risk of exchanging contracts;

2. No the lawyer does not need to have proof of funds. Any sensible seller would ask for proof of funds, as ultimately all they are getting is a contractual obligation from you to pay the deposit and complete the contract - without any knowledge of your ability to pay it. Best practice would have involved your solicitor explaining to you the dangers of exchanging contracts without funding in place.

3. Potentially it sounds like the solicitor was negligent and should have drafted the contract so the deposit was only £10k.

4. The lawyers obligation to you is to provide their service with "reasonable care and skill". In exercising this they would need to have proved they properly advised of the risk you were taking. If they cannot do this they are potentially in breach of your retainer with them and the implied terms under the Supply of Goods and Services Act 1982 to use "reasonable care and skill". If they are in breach then you have a contractual claim against them for your loss.

I think it is very important at this stage to get your file off the solicitor. You can then find out (1) If they advised you properly and (2) If they negligently drafted the contract.

Do you have any emails with the seller that show you agreed a £10k deposit only? If so you may be able to rely on the law of mistake to say that the reference to 10% is not what the parties agreed?

I look forward to hearing from you.

Kind regards

AJ
Customer: replied 2 years ago.
We never agree 10k with the seller. That's the point. They wanted 10%. My lawyer wrote 10k on the contract by hand. But the special conditions said 10%. So I assumed had then agreed 10k. I did not read the special conditions becasue all I need to know was on the form.
Expert:  Alex J. replied 2 years ago.

Hi, Thank you. From everything you have said, it sounds like the solicitor was negligent. fDid the front page look something like this and say on the front where it says "Deposit" - Deposit is £10k? Kind regards AJ

Customer: replied 2 years ago.
Yes. That's the one
Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

My apologies the question had been locked temporarily.

On the deposit form, it said a deposit was payable of £10k, and this was supposed to be un substitutions of the standard conditions of sale.

What you need to do is get the file off your solicitor and see if he has negligently drafted this. You need to do this quickly as it will only become an issue if the seller decides to issue a county court claim against you.

I look forward to hearing from you.

Kind regards

AJ
Expert:  Alex J. replied 2 years ago.
Hello,

I am sorry you are not happy with the service.

Is there any way I can assist you further?

Kind regards

AJ

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