House move - Problems between exchange and completion.
Discussion
Morning All,
I'm writing this on behalf of a colleague at work, thankfully not for myself. The situation is that they exchanged contracts last Friday with a completion date of 1-week later. Yesterday they were informed that their mortgage offer had expired as it was over 6 months since it was issued.
All parties involved are now playing the defensive blame game with the solicitor blaming the IFA and vice versa. If they can't get this resolved then they are looking at penalty costs for each day that they miss completion and then the complete loss of their deposit in 2 weeks time.
I've advised that they call Citizen Advice Bureau and the Legal Ombudsman. Would I be right in thinking that the solicitor is at fault as they should never have proceeded with the exchange of contracts without knowing that the mortgage offer had expired?
Any legal advice on this will be welcomed. Anything to help the situation as the thought of losing all your savings/deposit must be terrifying.
Cheers,
DC
I'm writing this on behalf of a colleague at work, thankfully not for myself. The situation is that they exchanged contracts last Friday with a completion date of 1-week later. Yesterday they were informed that their mortgage offer had expired as it was over 6 months since it was issued.
All parties involved are now playing the defensive blame game with the solicitor blaming the IFA and vice versa. If they can't get this resolved then they are looking at penalty costs for each day that they miss completion and then the complete loss of their deposit in 2 weeks time.
I've advised that they call Citizen Advice Bureau and the Legal Ombudsman. Would I be right in thinking that the solicitor is at fault as they should never have proceeded with the exchange of contracts without knowing that the mortgage offer had expired?
Any legal advice on this will be welcomed. Anything to help the situation as the thought of losing all your savings/deposit must be terrifying.
Cheers,
DC
They are working on that. The added complication is that they are on maternity leave and the current mortgage company has insisted that she cuts her maternity leave to just 3 months from the planned 12 months (clearly she was already expecting when the original application was approved).
They just need some advice for how to avoid the potential worst-case scenario of losing their deposit.
DC
They just need some advice for how to avoid the potential worst-case scenario of losing their deposit.
DC
why would it be the solicitor's fault?
surely then knew when their mortgage offer was made, and how long it lasted for?
are they looking for someone to blame so that they don't have any penalty costs?
I would be speaking to the mortgage broker / company very rapidly - if the offer has just run out there may be little problem in getting it renewed... the reason for a timescale on the offer is presumably in case circumstances change, assuming they haven't changed - get another offer, it is only Tuesday.
surely then knew when their mortgage offer was made, and how long it lasted for?
are they looking for someone to blame so that they don't have any penalty costs?
I would be speaking to the mortgage broker / company very rapidly - if the offer has just run out there may be little problem in getting it renewed... the reason for a timescale on the offer is presumably in case circumstances change, assuming they haven't changed - get another offer, it is only Tuesday.
I have no idea how they lost track of the offer expiry date, everyone's different and some people don't keep on top of the details like they should.
Hopefully they can get an updated offer in the coming days and prevent any penalties.
The only reason I wanted to check whether the solicitor would be at fault is because in my recent house move the solicitor was on top of all the details. I'm quite confident that he would have spotted the issue with the offer expiry date before advising us to exchange & complete. If my understanding of that is wrong, I'm happy to be corrected as I'm no expert at all.
Thanks
DC
Hopefully they can get an updated offer in the coming days and prevent any penalties.
The only reason I wanted to check whether the solicitor would be at fault is because in my recent house move the solicitor was on top of all the details. I'm quite confident that he would have spotted the issue with the offer expiry date before advising us to exchange & complete. If my understanding of that is wrong, I'm happy to be corrected as I'm no expert at all.
Thanks
DC
stop looking to blame anyone at all it doesn't help resolve the issue.
tell the mortgage provider that she'll only take the 3 months maternity and get the deal done
whether she changes her mind on maternity leave after securing the loan is her business as long as the debt is paid who would know?
tell the mortgage provider that she'll only take the 3 months maternity and get the deal done
whether she changes her mind on maternity leave after securing the loan is her business as long as the debt is paid who would know?
Property Solicitor here.
1. They need to get on the reapplication - if it has only just dropped out of time then it should be a rubber stamp as a rule. Maternity complicates. There might also be a change in rate but this SHOULD be recoverable. Last year i had one that was about to ex and i noted the offer would expire before completion - checked with lender and all approved, although i would not ex until i had it in writing.
2. Blame game is not going to help anyone right now but i have to say that whilst the Clients should have been on top of this it is the Conveyancer who is at fault. Simply put they should have checked before they exchanged. They do this s
t every day and know that this is one of those things that you should ALWAYS check before exchange.
I hope that this gets resolved in time, there is time but it is going to require effort from a few people and a good wind in the right direction. Horrible situation, there but for the grace and all that.
1. They need to get on the reapplication - if it has only just dropped out of time then it should be a rubber stamp as a rule. Maternity complicates. There might also be a change in rate but this SHOULD be recoverable. Last year i had one that was about to ex and i noted the offer would expire before completion - checked with lender and all approved, although i would not ex until i had it in writing.
2. Blame game is not going to help anyone right now but i have to say that whilst the Clients should have been on top of this it is the Conveyancer who is at fault. Simply put they should have checked before they exchanged. They do this s
t every day and know that this is one of those things that you should ALWAYS check before exchange. I hope that this gets resolved in time, there is time but it is going to require effort from a few people and a good wind in the right direction. Horrible situation, there but for the grace and all that.
Rude-boy said:
Blame game is not going to help anyone right now but i have to say that whilst the Clients should have been on top of this it is the Conveyancer who is at fault.
That's my view too.You hire a conveyancing solicitor to use their experience to avoid the numerous pitfalls in the processes. This being an obvious one.
JustinP1 said:
Rude-boy said:
Blame game is not going to help anyone right now but i have to say that whilst the Clients should have been on top of this it is the Conveyancer who is at fault.
That's my view too.You hire a conveyancing solicitor to use their experience to avoid the numerous pitfalls in the processes. This being an obvious one.
Also the solicitor needs to protect himself, he could have an interesting time if he had given undertakings.....
akirk said:
why would it be the solicitor's fault?
surely then knew when their mortgage offer was made, and how long it lasted for?
are they looking for someone to blame so that they don't have any penalty costs?
This is exactly why it is the solicitors "fault." they should have point blank refused to exchange.surely then knew when their mortgage offer was made, and how long it lasted for?
are they looking for someone to blame so that they don't have any penalty costs?
Thanks all, hopefully they will get this resolved very quickly.
When I met my solicitor to sign contracts he explained the penalties for failing to complete so that we were clear before signing anything. He also said that in 30 years he had only had 1 or 2 cases where someone failed to complete and lost their deposit.
To hear of someone close at work who has then fallen into that situation just 2 weeks later is quite a surprise, that's why I wanted to check for them. I agree that there's no point playing the blame game, but at the moment that is what they are getting from their solicitor, so I can sympathise with them to some extent.
Fingers Crossed.
DC
When I met my solicitor to sign contracts he explained the penalties for failing to complete so that we were clear before signing anything. He also said that in 30 years he had only had 1 or 2 cases where someone failed to complete and lost their deposit.
To hear of someone close at work who has then fallen into that situation just 2 weeks later is quite a surprise, that's why I wanted to check for them. I agree that there's no point playing the blame game, but at the moment that is what they are getting from their solicitor, so I can sympathise with them to some extent.
Fingers Crossed.
DC
blueg33 said:
I failed to complete on time about 5 times this year (pension fund lawyer painfully inept), we completed them all about 20 days late, the cost was minimal, but there were no chains.
and you had a commercial deal on going with both sides happy to grant extensions, likely you also only got hit for interest rather than the full house. I served a Notice to Complete (this is what starts the 10 working days or you lose your deposit clock ticking ) and the buyers finally completed one day before they would have lost their £400k+ deposit.
As a rule on resi i would say that i serve two Notices a year at the most. It is funny but it is almost always the 'chain free' deals that have such issues - the level of damages and costs with a chain deal usually focuses minds a touch...
Only ever had one land with me and that was due to a Client forgetting to request their funds from a savings account when i told them to meaning that they were two working days late on the Contract Date IIRC.
100% though this is one of those issues that you as a conveyancer should always have in your mind, especially at the time of exchange. Hell i check as soon as dates are being talked about properly. 101 basic stuff and as another poster has pointed out this could be a major issue for the Firm, if nothing else they have breached CQS and Protocol procedures.
Rude-boy said:
nd you had a commercial deal on going with both sides happy to grant extensions, likely you also only got hit for interest rather than the full house.
I served a Notice to Complete (this is what starts the 10 working days or you lose your deposit clock ticking ) and the buyers finally completed one day before they would have lost their £400k+ deposit.
As a rule on resi i would say that i serve two Notices a year at the most. It is funny but it is almost always the 'chain free' deals that have such issues - the level of damages and costs with a chain deal usually focuses minds a touch...
Only ever had one land with me and that was due to a Client forgetting to request their funds from a savings account when i told them to meaning that they were two working days late on the Contract Date IIRC.
100% though this is one of those issues that you as a conveyancer should always have in your mind, especially at the time of exchange. Hell i check as soon as dates are being talked about properly. 101 basic stuff and as another poster has pointed out this could be a major issue for the Firm, if nothing else they have breached CQS and Protocol procedures.
Fair comment, it's always worth a discussion with the seller. Our deals are fifty percent private sellers. I served a Notice to Complete (this is what starts the 10 working days or you lose your deposit clock ticking ) and the buyers finally completed one day before they would have lost their £400k+ deposit.
As a rule on resi i would say that i serve two Notices a year at the most. It is funny but it is almost always the 'chain free' deals that have such issues - the level of damages and costs with a chain deal usually focuses minds a touch...
Only ever had one land with me and that was due to a Client forgetting to request their funds from a savings account when i told them to meaning that they were two working days late on the Contract Date IIRC.
100% though this is one of those issues that you as a conveyancer should always have in your mind, especially at the time of exchange. Hell i check as soon as dates are being talked about properly. 101 basic stuff and as another poster has pointed out this could be a major issue for the Firm, if nothing else they have breached CQS and Protocol procedures.
We came *this close* to the same situation when we bought our place back in Jan, as our buyer's mortgage deal was due to expire approx 2 weeks before we were going to be in a position to complete, much less exchange. Our fault really, as our mortgage offer took an age to get through when we thought we'd covered all the bases. We literally came within hours of everything falling apart.
Anyways, in the end our buyer spoke to his mortgage company, explained the situation and they simply extended the offer for another fortnight. No drama, all sorted. That was on a 95% offer too, so about as risky as it can get for a mortgage company. Whilst I'm sure they're not all the same, I would hope that a sensible phone call to explain the situation with them should result in a sensible solution from them.
Anyways, in the end our buyer spoke to his mortgage company, explained the situation and they simply extended the offer for another fortnight. No drama, all sorted. That was on a 95% offer too, so about as risky as it can get for a mortgage company. Whilst I'm sure they're not all the same, I would hope that a sensible phone call to explain the situation with them should result in a sensible solution from them.
blueg33 said:
JustinP1 said:
Rude-boy said:
Blame game is not going to help anyone right now but i have to say that whilst the Clients should have been on top of this it is the Conveyancer who is at fault.
That's my view too.You hire a conveyancing solicitor to use their experience to avoid the numerous pitfalls in the processes. This being an obvious one.
Also the solicitor needs to protect himself, he could have an interesting time if he had given undertakings.....
Ekona said:
Anyways, in the end our buyer spoke to his mortgage company, explained the situation and they simply extended the offer for another fortnight.
OP - This all day long. I have had offers that would have expired between ex and comp and you just send the lender a nice fax asking for an extension to cover the extra needed. If it is less than 2 weeks it is usually a done deal - i can't ever think of being refused, but then i haven't had to do such a letter for a few years as we have got a lot hotter on making sure that Clients are aware of their 'drop dead' dates and are telling them the second we think that there could possibly be an issue.
Just one other little point.
I am sure that you are but, regardless of who is at fault here, you need to get on the blower and do all you can to help sort the issue. It isn't a problem of your making but it is one that will impact on you and one that you can help to resolve.
Time to start getting arsey (if you are that way inclined) is after the dust has settled. Right now it is important to keep everyone on side and solve the issue. Don't be afraid to ensure that they are aware that you consider that the issue is of their making but leave it at that and make sure that your attitude to how this ultimately ends up will be highly driven by their efforts to resolve it and the outcomes. Right now you need to have the team on your side, save the arse kicking competition until the final whistle.
I am sure that you are but, regardless of who is at fault here, you need to get on the blower and do all you can to help sort the issue. It isn't a problem of your making but it is one that will impact on you and one that you can help to resolve.
Time to start getting arsey (if you are that way inclined) is after the dust has settled. Right now it is important to keep everyone on side and solve the issue. Don't be afraid to ensure that they are aware that you consider that the issue is of their making but leave it at that and make sure that your attitude to how this ultimately ends up will be highly driven by their efforts to resolve it and the outcomes. Right now you need to have the team on your side, save the arse kicking competition until the final whistle.
Edited by Rude-boy on Tuesday 17th November 12:02
Forums | Speed, Plod & the Law | Top of Page | What's New | My Stuff