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Stuart J
Stuart J, Solicitor
Category: Law
Satisfied Customers: 23745
Experience:  Senior Partner at Berkson Wallace
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I sold my leasehold flat recently. There were some works

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I sold my leasehold flat recently. There were some works that happened whilst I lived at the flat (costing £10,000) that have not yet been invoiced for. As I am no longer the owner, that invoice will be sent to the buyer.
It was agreed between the estate agent and buyer that I would pay this £10,000 for the works.
In the buyer's solicitor's questions, I answered that I was 'happy for my solicitors to hold a retention for £10,000'.
Completion happened. My solicitor seems to have forgotten to keep back the retention, as I received all the money without the retention deducted, and the retention wasn't mentioned in the Statement of Account.There is nothing on the signed contract about the £10,000 works. I understand that solicitors have Riders that give more info about a sale. However, I never saw, nor signed, any rider. 
So I have nothing in writing from the sale about this £10,000 and who is liable to pay it.
Given that I said that I was 'happy for my solicitors to hold a retention of £10,000' and that my solicitor didn't hold a retention, am I still liable to pay that £10k when the invoice to the new buyer comes in?
A retention happens at the point of sale, so surely the opportunity for my solicitor to hold that retention for the buyer has passed? Can he at any point make me pay that £10,000?
Thank you.
JA: What steps have you taken so far? Have you prepared or filed any paperwork?
Customer: Yes
JA: Have you talked to a lawyer about this?
Customer: Yes
JA: Is there anything else the Lawyer should know before I connect you? Rest assured that they'll be able to help you.
Customer: That's it

Hello. Thank you for the question. It is my pleasure to assist you with this today.

Please bear with me as I will be online and off-line from time to time and therefore, may be delayed getting back to you. You will receive an email when I reply.

Can you tell me when the sale was completed please?

Customer: replied 10 days ago.
I've also attached a copy of the contract that was signed (the only things I removed were the names and addresses to protect our personal data)
Customer: replied 10 days ago.
That's great- thank you so much
The sale completed on 24th March 2021

This is probably one of those as if it came down to it, it would have to be decided by the court.

The reason is that there is no contract for the GBP10,000 and under the Law of Property Act 1925 any contract for the sale of property must be evidenced in writing and signed by the parties and that is not included.

Whether you feel ethically you are obliged to pay this or not, is a different thing altogether.

In my opinion, you are not legally obliged to pay it and if the buyer’s solicitor went ahead without having the provision in the contract or undertaking from a solicitor to keep the retention, that’s the buyer’s fault.

However there is a doctrine of estoppel and the buyer could probably rely on estoppel because you promised that you would pay this money and you didn’t.

A lot would come down to what the judge decided it got to court but it did get to court, the legal costs could easily be twice as much as the amount of retention.  I wouldn’t like to bet which way it would go but if I had to put money on it, I think you would lose.

Thank you for letting me assist you with your legal question.  I am glad that I was able to help.

I am not certain whether that answers the question for you or not, but I am happy to answer any specific points arising from this.

It will be my pleasure to help you again either further with this or any future questions you have

Kind regards

Customer: replied 10 days ago.
Thank you so much for this. That's really helpful.Are you saying that in order to take this to court, the cost to the buyer would exceed £10,000?
Or would the cost to go to court exceed £10,000 for me?
Who would take me to court? The buyer as an individual or the buyer's conveyancers?
Do you think the high cost of taking this to court would put the buyer off doing this?Would it be the Small Claims Court or another type of court?  From your experience, what would the likely stages be once the buyer's solicitor's mistake is discovered? Would there be an attempt to settle it out of court, where I could offer, say, half the amount?I've done some reading about Stoppel. Apparently some claims using stoppel have been unsuccessful because:
' a "statement of current intentions as to future conduct" and "a promise of that conduct" (emphasising that "saying that it is your intention to do a thing is not at all the same as promising to do it"). This is a subtle but important distinction, which may prove to be a stumbling block in many cases'Just wondering if, bearing the above in mind, the buyer would be able to win this case? See below:
The exact wording of my solicitor's answers to the buyer's solicitors question is as follows:'The Seller says that she is happy for us to hold a retention of the exact amount of the estimates for works, which can be found in the management pack, and are as follows'That question was answered on 24th November 2021, 4 months before completion. And I only agreed to a retention. I did not agree to pay for the works from my own pocket at a later date.Surely I never made a promise that if the retention never happened, that I would keep the money to give to the buyer at a later date? Thanks so much.
Customer: replied 10 days ago.
You mention an undertaking from a solicitor. So my solicitor could have made an undertaking to the buyer's solicitor to pay the £10,000 and I don't know about it? Or is that something I would have had to sign?

.  An undertaking is quite innocuous document but the ramifications of it are extremely serious and far-reaching.  All you need is a letter from the solicitor with the word “we undertake” and then whatever it is that you are asking for.  In many firms only partners can give undertakings.  A breach of an undertaking is an extremely serious matter.  The solicitor will be severely disciplined for breaching it.

It’s not something that you would have known about, it’s not something that you would have had to sign, it’s just between solicitors.

The Small Claims Court limit is GBP10,000 and with the court costs it takes it over GBP10,000 and therefore the winner would normally get their costs paid by the loser.

It would be the buyer that takes you to court although they cannot take you to court for breach of contract because there is no mention of this in the contract.

You both have negligence claims against your respective solicitors.

How this plays out really depends to a great extent on how bullish they want to be in getting the full amount and how bullish you want to be in defending.  As I said, it’s not one that I would be rushing to court over thinking that I was going to automatically win.

With regard to not agreeing to pay for the works in your own pocket at a later date, that’s just semantics because whilst you agree to the retention, the mathematical effect is the same.  You have GBP10,000 more than you agreed albeit that it wasn’t in the contract.

It is the omission from the contract and the promise to do this, outside the contract which makes it 1 Which a county court judge will have to decide if you cannot agree between you.

Customer: replied 10 days ago.
Hi Stuart,Thank you so much for this.My solicitor is a partner/owner at his firm. I think I must assume that my solicitor did make an undertaking to the buyer's solicitor to retain the £10,000 for the works (and that he just forgot to hold the retention). Does this make me liable to pay the £10,000? Or would my solicitor's firm be liable for the £10,000? Could it then end up being my solicitor taking me to court for the £10,000 rather than the buyer? Or would my solicitor have professional indemnity insurance to cover mistakes like this?Surely I can't make a negligence claim against my solicitor as there's nothing for me to claim?We don't actually know if the buyer's solicitor has been negligent, correct? As there's probably an undertaking from my solicitor promising to hold the retention.If that undertaking exists, what would be the likely stages once it is discovered that the retention wasn't held?Thanks so much,Lucy
Customer: replied 10 days ago.
did you say that the buyer could take me to court at the small claims court? Wouldn't she need my new address to be able to do that?

They would need your new address although they can make an application to court to compel the solicitor to let them have it or they could use a tracing agent who do no find no fee for 50 quid.

If the solicitor gave an undertaking then the solicitor is bound by that undertaking whether he has the money or not.  Therefore the buyer is safe because they can depend on the undertaking and its your solicitor that is hanging out to dry.  So it could indeed be your solicitor taking you to court for the 10 grand you would have a counterclaim for breach of contract, and breach of the Consumer Rights Act 2015, failing to carry out the job with reasonable care and skill and of course a complaint to make to the Legal Ombudsman.

Your solicitor will indeed have insurance to cover this but the excess the solicitor would have to pay could easily be between GBP2000 and GBP5000 before the claim starts.

Without both files we don’t actually know who was at fault although certainly there is blame by your solicitor, we don’t know whether it was compounded by the other side or not.

Customer: replied 9 days ago.
Thank you so much. This is such an amazing help.Surely even if I made a counter-claim against my solicitor, a judge is likely to rule in my solicitor's favour, as it was an honest mistake? Or does that not come into it?Though, could it be argued that, as I thought I had that money (I'd claim complete ignorance of my solicitor's failure to hold the retention), that I spent money that I thought was mine accordingly, was more frivolous with spending, and therefore it's too late to ask for the full amount back?Would my solicitor use Small Claims Court? Can I ask if I'm covered by client confidentiality? A friend recommended my solicitor to me. Legally, would my solicitor be allowed to go back to my friend and bad mouth me/ tell them what has happened with regards ***** ***** £10,000 if I don't pay up?Do you think my solicitor is likely to take me to court? If I'd been your client, and it had been your mistake, what would you do?Thanks so much

You never know what view a judge is going to take on the day and you already have my opinion that you would lose.

There is a doctrine of unjust enrichment and you are GBP10,000 better off than you intended to be so it could well go against you.  Sorry.

I don’t think the argument that you thought the money was yours woodwork because it’s a large amount of money and you knew there was a retention.

The solicitor is unlikely to press for the matter to be small claims court because he will want his legal cost back in the event the claim is successful.

The solicitor would not be able to badmouth you.  That would be conduct likely to bring the profession into disrepute and could lead to a serious disciplinary.

If we had done it, what would we do, we would probably be willing to absorb a bit and perhaps offer to settle for 8000 or GBP9000 and we would take any complaint to the Legal Ombudsman on the chin and deal with it.

Customer: replied 9 days ago.
Thank you so much. Will rate you now.

It was my pleasure to assist you. Please come back if anything else crops up and needs clarification.
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