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Ash
Ash, Solicitor
Category: Property Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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Purposes of taking out a commercial mortgage secured on a

Resolved Question:

For the purposes of taking out a commercial mortgage secured on a property asset of ours, our solicitor took out three indemnity policies on behalf of the bank providing the mortgage. These policies were to supposedly protect the bank from any issues arising from the property the bank was taking a charge over.
These policies were: Restrictive Covenant Indemnity, Contaminated Land Policy for commercial property and Breach of Planning indemnity. The cost of these policies were automatically deducted by him from the loan amount when it was drawndown.
Our complaint is that the we never gave authorisation for the breach of planning policy to be taken out. At a cost of £4700 we would have argued that this policy was not required as the building is 16 years old and therefore immune from any enforcement action from the council with regards ***** ***** breach of planning: http://planningguidance.communities.gov.uk/blog/guidance/ensuring-effective-enforcement/planning-enforcement-overview/
However, without our consent, the policy was taken out, the £4700 cost of this policy was deducted from our loan amount and now the solicitor won't respond to any of my emails regarding this matter, its been over 3 weeks now since I first emailed him with this issue. what can i do? do I have a point that this policy was not required? Was he allowed to pay for this policy without our consent?
Submitted: 1 year ago.
Category: Property Law
Expert:  Ash replied 1 year ago.

Hello my name is ***** ***** I will help you.

Just to be clear you did not ask for it and there are no instructions from you?

Did the solicitor say in advance he would take this out?

Alex

Customer: replied 1 year ago.
Hi AlexOn 27th May received an email from him with quotes for the restrictive covenant and contaminated land polices. There is no mention of the breach of planning policy in this email.Re the necessity of the polices he writes: "I have received confirmation from xxxxx that Handlesbanken will be in a position to complete on Tuesday 31st May 2016 and that they have stated that the attached revised indemnity policies at the higher level of cover need to be taken out on Completion, which is what we shall do so as to ensure that the drawdown takes place."I do not reply to this email, as the two policies attached are acceptableThen on 2nd June I get an email that the Loan has been drawndown to his account. It is only then we discover he has taken out a third policy, the breach of planning policy and has at the same time has deducted his bill and the cost of all the policies from the loan monies, the remainder is then transferred to our account.So there was no warning about the breach of planning policy and we gave no instruction that it should be taken outPeter
Expert:  Ash replied 1 year ago.

Then you don't need to pay. Under the solicitor rules they need to tell you in advance what advice is required and any insurance. They then need to take Indtructions following that advice.

If they did not then they can't be paid for it. You didn't want or ask for it. Therefore it does not have to be paid.

There is no evidence you wanted it.

Can I clarify anything for you about this today please?

Alex

Customer: replied 1 year ago.
Hi AlexSo If our solicitor already deducted the money to pay for this policy from our loan monies, without our instruction or authorisation, would you say we have cause to make a formal complaint?Peter
Expert:  Ash replied 1 year ago.

You need to write and set out your losses and request a refund within 14 days or say you will go to Court within 14 days. You should make sure you send this signed delivery and keep a copy.
If they do not refund you then you can issue proceedings in the County Court. You can either do this online at: www.moneyclaim.gov.uk or by completing form N1 http://s3-eu-west-1.amazonaws.com/hmctsformfinder/n1-eng.pdf and take it to your local County Court.
The Court will then issue a claim which a copy will be sent to the Defendant who will have a limited time to defend it, if not you can enter Judgment and enforce.
If the claim is for £10,000 or less it will be a small claim so you will not need legal representation. Over this value you would need representation for trial.
Can I clarify anything for you about this today please?

Ash and other Property Law Specialists are ready to help you
Customer: replied 1 year ago.
ok thanks for the advice