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Ask Clare Your Own Question
Clare, Solicitor
Category: Law
Satisfied Customers: 34895
Experience:  I have been a solicitor in High Street Practice since 1985 with a wide general experience.
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My wife tried to buy a property and had arranged a mortgage

Customer Question

My wife tried to buy a property and had arranged a mortgage to purchase the property. The solicitor for my wife handed over her mortgage money to the bank who had a charge over the property being purchased without obtaining a legal undertaking from the bank that they would release their charge. The bank took the money and now will not release the charge or pay the money back. My question is at what point does the money become my wife's. Was the solicitor holding the money in trust for the building society until completion of purchase and as it never completed my wife never had a loan and therefore can stop paying the mortgage or did it become my wife' s before this point and she has to continue paying the mortgage until the matter is resolved probably in court probably in 12-18 months time. It appears we have to sue our solicitor for professional negligence but this will cost serious money and take a long time and we are in the meantime not legally able to rent out the property as my wife originally. If we can avoid paying the mortgage it would be a huge help to her
Submitted: 2 years ago.
Category: Law
Expert:  Nicola-mod replied 2 years ago.
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.
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Customer: replied 2 years ago.
Yes, I can wait a little longer.
Expert:  Nicola-mod replied 2 years ago.
We will continue to look for a Professional to assist you.
Thank you for your patience,
Expert:  Clare replied 2 years ago.
HiThank you for your questionMy name is ***** ***** do my best to help you but I need some further information first.Could you explain a little n more about what actually happened please
Customer: replied 2 years ago.
A builder agreed a deal with my wife to sell a property. The deal involved a shared equity (where the building company retained a share (35% or so) of the property. Her solicitor was informed and my wife raised a mortgage and when she came to complete the purchase the bank changed the ground rules and stating that the builder did not make it clear to them that a shared equity arrangement had been agreed and they belived the purchase price was for the full property. Then bank agreed to accept £250,000 to release their charge. The buildng company has since gone bankrupt.Her solicitor has a letter from the bank stating they would accept £250,000 and he also phoned the bank on the day of completion to confirm they would accept 100% of the sale proceeds. Unfortunately he died a few months later so this phone call cannot be verified except from the note he made in his log.It appears that he should have made a much more legally binding undertaking from the bank before releasing the money.The solicitor transferred the net sales proceeds which amounted to £253,700 to the bank. The bank made more enquires and was informed by my solicitor that the sales price was £425,000. This made them suspicious as they only received £253700. It was explained that it involved a shared equity deal. They had not known about this beforehand but the builder claimed they had never asked. It was not deliberately kept from them but they never asked for any details. The builder made it clear to the bank in an email that it was a "deal" and the word deal implied not a straight forward sale.Since then the bank has refused to supply a DS3 form releasing the property from their legal charge. This despite the fact that have had the £253,700.My wife has commenced professional negligence proceedings against her solicitor but these are horrendously expensive. That is why she woud like to know if she ever became liable for the mortgage funds or were they still held by solictor on behalf of the building society. She cannot afford to continue to pay the mortage yet alone the legal costs etc as she is a retired teacher. She has tried to find a no win no fee arrangement with no luck.
Expert:  Clare replied 2 years ago.
What has happened to the property?
Customer: replied 2 years ago.
My wife has the keys and uses it for occasional breaks but intended to rent it out. It curently just sits there empty. I forgot to mention that the solictor unusually acted for both sides. The receiver for the building company has issued some sort of disclaimer notice to say they are not interested in persuing any interest they may have had in it..
Expert:  Clare replied 2 years ago.
How much is actually outstanding on the charge
Customer: replied 2 years ago.
HiI know when the builder went bust he owed the bank in excess of £1,000,000 and as far as I am aware the whole amount is technically covered by the charge. I have spent years trying to get a figure from the bank and for some reason they just will not give one or put forward any proposal whatsoever to assist in resolvlng the problems. I think they are just waiting until they can hold someone to ransom. Nor of course will they return the money. I ahev complained to Banking Ombudsman who cannot assist because my wife was not a customer of the bank.
Expert:  Clare replied 2 years ago.
Has you wife asked the bank of they will agree to her letting the property?
Customer: replied 2 years ago.
Hi,The problems is the bank will not really deal with it. They seem to want to leave it (did I mention the problem occurred over 5 years ago and yes I am aware of time barring) and it appears as though they cannot be bothered with it. They will not give any sort of commitment to anything or accept any proposals or put forward any of their own proposals which I have asked for on at least 6 occasions. I am not sure if they are incompetent or afraid to make a mistake or just playing some sort of long game hoping eventually to be able to hold someone to ransom. It takes on average about 3 months for them to reply although every month they send a letter saying they will reply soon. Even if the proposal was put to them and they accepted which in my view the chances are almost zero, my wife would then have to advertise it etc put it on the market and so it would be a further six months without any money. We need an answer to the question so we can if possible stop paying the mortgage.The question is did the money ever legally become my wife's or was it always held in trust for the building society. I am aware of a situation where a solicitor drew down funds to compete a purchase but due to a last minute unexpected hitch the purchase never completed. The money was of course returned to the building society when it became clear the hitch couldn't be resolved. This implies that the money was always owned by the building society until completion.
Expert:  Clare replied 2 years ago.
I am sorry but the fact is that the Solicitor did complete the purchase using the money and accordingly so far as the Mortgage Company is concerned your wife is indeed liable.The fact that the bank will not release the charge and accordingly the Transfer cannot be registered does not negate the fact that it the Transfer did take place.The person at fault is the solicitor and frankly I am surprised that his insurers have not settled the matter.It was certainly worth trying to find an alternative way around this - but sadly this is not the option to followPlease ask if you need further detailsClare