Sold Scottish Property, solicitor says cheque will take days to clear.

(17 Posts)
FIFIBEBE Sun 10-Nov-13 13:38:00

A while ago some Scottish people on here were helpful in advising me when to set a closing date for a sale. I do not live in Scotland but have just sold a property in Edinburgh and the buyers will take possession on Friday this week. The solicitor has advised me the funds will not be available for about a week due to the use of solicitors cheques. I am not buying another property so don't need the funds to buy but how would this work if I did? I am suspicious about solicitors depositing proceeds from sales and making sneaky significant amounts of interest in bank accounts. Can anybody enlighten me?

ClaimedByMe Sun 10-Nov-13 13:40:41

When we sold our flat and bought this house we decided to take some of the profit as cash to fit a new kitchen and bathroom and we had to wait a week for the cash to reach our account.

Rangirl Sun 10-Nov-13 13:43:08

This is standard practice in Scotland Sales settle by solicitor's cheque which is safe but not cleared Payments are not normally made until the cheque has cleared Occasionally settlement is made by CHAPS which is cleared funds but it can be difficult as there is no guarantee of how long the payment will take

lalalonglegs Sun 10-Nov-13 18:17:23

It's pretty unusual for CHAPS payments not to arrive on the same day if you send them before a certain time. This solicitors cheques thing sounds a lot more of a nuisance than the very occasional electronic payment arriving a day late.

FIFIBEBE Sun 10-Nov-13 20:59:44

So can I ask for a CHAPS payment?

Crutchlow35 Sun 10-Nov-13 21:07:00

In Scotland we always pay by solicitors cheque. If you sell and buy on the same day it is always done by cheque. Only very occasionally do we do a bank transfer simply because it can take until 3.30 for payment to go through and that can just be to settle the sale. That would mean your purchase couldn't proceed and you could therefore be homeless for a night.

Cheques take a full week to clear properly. The 3 day thing for cheques isn't strictly correct as the issuer of the cheque can, between days 3 and 5 still stop the cheque and recall the funds. Only from day 6 are the funds fully clear.

It isn't a nuisance. You would have been told the terms of the payment in your terms of business letter issued by the conveyancing solicitor. You can still have a CHAPS payment to your account on full clearance day when the funds clear into your solicitors account.

Crutchlow35 Sun 10-Nov-13 21:17:38

Also, scottish solicitors send cheques the night before settlement so the solicitors acting on behalf of your buyer would send the night before so your solicitor had the cheque first thing that morning. Once the final paperwork is done there would be a call to confirm eveything is in place and your solicitor could cash your cheque.

If you were buying your solicitor would have done the same, ie sent a cheque the night before.

A whole chain can complete very quickly this way.

Yes, we had this too when we sold a house recently in NI. I think the solicitors are reluctant to change in both countries as it must be quite nice to have all that client fund interest for weeks at a time. Strange that the rest of the UK seems to be able to use CHAPS successfully.

Crutchlow35 Sun 10-Nov-13 21:18:24

Oh and the accounts cheques are paid into are non interest bearing.

Strange then that there are all those rules in the handbook on interest to be paid on client accounts if the account that the solicitor holds with the bank does not pay interest......

To be fair the accounts have to be instant access so probably earn a low rate, but even a low rate on a large balance is probably still worth a not inconsiderable sum.

Crutchlow35 Sun 10-Nov-13 21:34:23

How do you get that then? Cleared funds are paid out the same day as they are cleared so even if it was an interest bearing account, there wouldn't be any interest earned?

Yes, the cleared funds are paid out by cheque thereby taking another six days to clear into my account - I paid for faster payments to avoid the second period of clearing given it was a six figure sum.

Crutchlow35 Sun 10-Nov-13 21:45:35

Ask for the interest if there was no onward purchase and mortgage to redeem. As I said, we use non interest bearing accounts.

Make sure you get a certificate of interest paid so you can declare it to the inland revenue if you do ask for it.

Yes, you may do, but not all solicitors are the same. My point was that there can be an incentive to use cheques rather than CHAPS transfers.

These people have been the family solicitor for years but have had a high turnover of staff recently and a very hands-off lead partner so thankfully they will not be doing any work for us again.

FIFIBEBE Sun 10-Nov-13 21:57:14

Thanks, very helpful. I shall enquire about interest.

steeking Sun 10-Nov-13 22:02:45

I'm Scottish & I can't believe that cheques are still being used in this day and age. The funds from our house sale got "lost" - Our solicitors saying they had paid it to the solicitors of the house we were buying, while they claimed they had no record of the money being paid in. It was a nerve-wracking few days!

DreamingAlice Mon 11-Nov-13 09:58:42

When I bought recently there was a clause in the business terms to state that the solicitors would not pay out any interest below £50- and then anything over that it would be split 50/50. So check your terms.

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