To change solicitor? She's royally screwed me

[Vanillaandstrawberries]

Posting here for traffic and mainly because I didn't get many responses in the property section. Please see my original post which explains the background.

www.mumsnet.com/Talk/property/4373293-this-whole-process-takes-years-off-your-life-doesn-t-it

Update - the mortgage lender has now confirmed that they will need the solicitor to confirm in writing that she is happy with the second policy and to ask them to review my case again, however the damage might have already been done. Even if the solicitor confirms that she approves of the new policy, the lender might not be happy now that she's flagged these issues up, even with a suitable policy in place. This solicitor was recommended to me but has never dealt with anything like this before and does not live local to where the property is. I spoke briefly with another solicitor today who lives local to the area that has dealt with lots of houses with this issue before, including one on the same street that sold a couple of years ago. Even if the new solicitor intervenes now it probably won't help as my current solicitor has probably scared the lender off. The solicitor has advised me to ask my mortgage broker to find a new lender and before even applying, to confirm if they will accept the indemnity insurance (there are lenders out there) and if they say yes, then to get a new solicitor, preferably the one I spoke to today and it should all sail through with no issues. Does that sound reasonable? Before any of this, I would need to ask if the vendor is even willing to wait whilst I start the whole process from scratch. I stand to lose so much, through no fault of my own. So so angry.

From my understanding, the solicitor has actually advised the lender against lending on this property. Is she even allowed to do that? I was led to believe by the other solicitor that I spoke with today that she shouldn't have done that and it's jeopardised everything for me now.

Bump

Your solicitor is acting for your mortgage lender. As her client, of course she needs to report any problem with title and the mortgage lender gets to decide whether it is worth the risk. Think carefully for a moment here - whose money is buying this house? Majority of it will be be the bank, and therefore the primary risk sits with them and not you if the house ends up worthless or difficult to sell. Lenders are all different, so if you can find one that knows the problems up front and is willing to accept insurance that sounds like a winner.

Thanks for your response. I was advised by the lender today that ultimately the decision lies with my solicitor and because she's kicked up such a fuss about it, it's now made them wary. The advisor even explained it hasn't helped that she sent the first policy and said she wasn't happy but has now sent another one and gone back on her word effectively. It's really confused things.

The solicitors job is to protect you AND the bank. It’s her job to flag risks to the bank and talk them out of it if it’s too risky. She is acting for both of you, so the way you talk about her scaring the lender off is unfair.

You could get another solicitor if you’re happy to pay double fees, it does make sense to have a suitably experienced solicitor (and you’ve learnt a lesson in doing due diligence on which advisers you appoint)

I don’t think you should be annoyed with your solicitor for ‘kicking up a fuss’ she is actually identifying things that could cause you huge problems and financial loss.

I’m sorry you’ve had such bad experiences but I don’t think your solicitor is to blame. She is clearly diligent and it is her obligation to act for both you and the lender. It is not just your investment she is protecting, but also the mortgage lender’s.

You have fallen in love with the house but it may have blinded you to the fact that a leasehold house with an absent landlord is not an attractive combination. How do you enforce any maintenance obligations for example, if there is no landlord? You are likely to have real trouble re-mortgaging this property or selling it on.

I don't think it's unfair at all. I've spent months and a lot of money on legal fees to effectively have someone tell me that I cannot purchase this property. Wouldn't you be slightly pissed off and upset? I'm not in a position to go and purchase the next house that is added to rightmove so yes I'm frustrated and disappointed. She has NEVER explained things to me properly and as a first time buyer she should be guiding me. She never explained that the decision ultimately is in her hands. She didn't explain to me that she would be actively advising the lender not to lend on the property. She told me that she would report back to the lender with her findings and the indemnity policy, when in fact she has actually written in black and white "I'd advise against lending on this property". If she had told me in the beginning that she was going to do that I would have told her not to bother and I could have tried a different solicitor who has more experience in this area. She told me that the mortgage lender would make the final decision but after her email I have no idea why she even thought the lender would accept this.

I really don't see how she's protected me in any way, shame or form. I'm the one who stands to the lose the property that I've invested so much time and money in. She will still be paid for her work. I doubt very much that she lays awake at night worrying, like myself.

Have you seen the letter from your solicitor to the lender advising them not to lend?

Your solicitor has an obligation to report concerns, but doesn’t act as a valuer for the lender.

I have not seen the email no, but when I spoke with the lender today on the phone they explained that the solicitor had emailed them explaining that she thought the indemnity policy was insufficient and that it probably wasn't a good idea to lend on the property.

They also told me that if the solicitor had told them that she was happy with the second policy then it would have almost definitely been given the go ahead by the lender.

I’d do the same thing if I had concerns. She’d be lying awake worrying at night when the lender sues the firm however many years down the line for having signed off on this.

Absent landlord shouldn’t be an issue with a suitable policy mortgage wise and as soon as she can give a green light on that front the lender will usually be happy.

You’re being incredibly unfair on your solicitor. She literally HAS to report these matters to the lender otherwise she is in breach of their instructions. When acting for a client with a mortgage, the solicitor has to give a Certificate of Title to the lender confirming they have complied with the lenders instructions, (look up your lender in the CML handbook online to see just how lengthy these are) and disclosed all necessary information. It is her reputation and her firms reputation on the line and there are serious consequences should a solicitor fail to declare information/be in breach.

I am sorry you are having a bad time but the criticism of your solicitor is unwarranted. Estate agents and brokers will often say things aren’t a problem because if down the line there is a problem, zero liability lies with them.

I hope you manage to get the issue resolved OP.

Although I personally wouldn’t want to buy a property with an absent landlord as it would mean a lengthy court process to buy the freehold as opposed to the usual statutory process

@Catfox1 we already have a suitable policy in place which the solicitor is happy with. It's caused issues because she originally sent them another one that wasn't sufficient. She sent the second one last week but didn't explain in her email (I have the email here) that she approved of this one. She just asked the lender to approve it, so I believe they are looking at her first email where she said she was unhappy with the first policy and believes she feels the same way about the second one which isn't the case. I've been told by the lender that they don't normally overrule the solicitors decision but unfortunately now because she's already said that she's and is effectively changing her position on the matter they might be wary...

@Vanillaandstrawberries

I really don't see how she's protected me in any way, shame or form. I'm the one who stands to the lose the property that I've invested so much time and money in. She will still be paid for her work. I doubt very much that she lays awake at night worrying, like myself.

Because she has potentially stopped you from spending hundreds of thousands of pounds on an asset that may not be worth that, may be difficult to sell in future or may become a liability to you.

If it’s a bad legal investment then she will tell the bank not to lend, she will understand there policies and whether the information she has breaches that. If she can get comfortable that the legal risks are manageable, she will tell them that too.

She has to flag those risks to you and the lender. If they were non issues then you wouldn’t be in this position.

The mortgage lender does make the final decision, they can contradict her advice but of course won’t. And she couldn’t tell you up front it was a no-go until she’d done the work.

Speak to your mortgage broker and find a lender who wouldn’t have an issue with the circumstances. Apply for a mortgage with them. Get a new solicitor if it makes you happier.

OP, the PPs are right.

Your solicitor is protecting you and your lender.

• The EA, who is working for your seller, downplayed the risks because they wanted a sale and a chunky fee - and they may not understand the risk anyway.
• The seller's solicitor, who is working for your seller, sent over an inadequate indemnity policy, presumably as that is cheapest for their client, the seller.

-Your solicitor, who is advising you and your lender, has explained to you the risks associated with buying this type of property (it may have taken a while but tbf the property market is nuts at the moment so she will have a lot on and she will have needed to do the work for you to assess the risk).

• Your lender does have the decision on whether to lend. If it is choosing to rely on your solicitor's advice that is entirely its choice.
• You say yourself that the solicitor may be happier with the second policy and may recommend it so it may all be fine.

You seemed to think that buying a house would be fun. It can be, but it's also a slow, expensive and deeply frustrating process. We all get that and most people would like it to change for the better. But it's unreasonable to focus all your anger on the one person who's actually acting in your interests.
Everyone else you've mentioned is out for themselves and their own clients.

I've obviously not explained myself properly. I am not cross that my solicitor reported the issues to the lender. I know that she has to, by law. I know that she is only doing her job. But I am cross that she never explained to me that she was going to actively advise them against lending on the property instead of trying to find a suitable solution first, as of course that will make them wary. She never told me that.
I understand that the first policy was insufficient and that the correct insurance has to be in place to protect not only me but the lender too, so I'm not mad about that either. But she's done me no favours by sending the second policy but not explaining herself properly to the lender and highlighting the fact that she is now indeed happy with this policy and is confident that the property is protected.

Who appointed the solicitor? You are saying that this is a huge cock up "through no fault of your own". I thought the buyer selects their solicitor - which would make it your fault wouldn't it?

I'm sorry that this has happened to you, but choosing an inexperienced solicitor was a bad idea. Also is " expecting the solicitor to guide you through the process". Unless that is expressly what you asked for, you won't get that. You will just get them doing their bit on the legal aspects of the sale.

She's not inexperienced @xksismybestletter. She has dealt with lots of house purchases/sales, just not one with an absent landlord. I do partially blame myself for not choosing a different solicitor and going with one who are based closer to the property. There are lots of properties in the area that have this issue so a lot of the local solicitors are use to dealing with this sort of thing.

Sometimes you have to report an inadequate option if that’s the only one that’s being made available by the vendor to a lender who will then decline to lend which in turn will spur the vendors solicitor to offer an alternative.

If that’s happened here it sounds like all that’s needed is for your solicitor to notify the lender that the second policy is now adequate and any concerns she once had have been resolved.

Or it could be that the second policy is not quite adequate still and she still has concerns. Give her a call and ask, she has the benefit of knowing the full background. The other solicitor you spoke to, and we, do not.

Best of luck either way, these things always work out.

Oh and on the fee front - check your T&Cs. A lot of firms are no completion no fee.

I don't know anymore @Catfox1. My solicitor was in court all day today so I couldn't speak to her. She must have seen the email from the mortgage lender though and asked her assistant to ring them and explain that they were happy with the second policy, which I thought she would have done as she told me that in the office today and specifically said she would stress it to them and try to word it in my favour, but supposedly (according to the advisor on the phone) she only asked them to look at documents again. She didn't explain that the solicitor is indeed, happy with the new policy now so we're now back to square one because nobody is communicating with each other properly.

I was also told by the lender that normally once they have approval from the solicitor, that they rarely overrule their decision but now because of the first incident it's made them wary... I'm told one thing by one person and another thing by another person...

It's not even about the money anymore. It's about the time, effort, the amount of chasing I've had to do and all the sleepless nights I've had in trying to make this work. I've done everything that has been asked of me and it's such a devastating feeling when that decision is taken away from you. It would be different if I'd chosen to walk away, but that choice has been made for me. I've mentally moved in and it's really hard to let go

I answered on your previous thread.
At the end of the day you have to ask yourself various questions about the risk of all of this as this is a leasehold house with an absentee freeholder. This house is cheaper than your previous option which was a shared ownership percentage. Why is this? Because it’s a problematic house sale that most people just wouldn’t enter into.

It’s cheaper for a good reason and the EA is just downplaying the problems and trying to loop you into their “tame” solicitor/broker who they reckon can get this over the line.

Leasehold houses are notoriously difficult to sell full stop. Then add in an absentee freeholder and you’ve got an additional layer of difficulty. An indemnity insurance will have limitations to it.

You could well end up owning a house that you will find incredibly difficult to sell in the future. The EA is not the person to listen to here.

I do partially blame myself for not choosing a different solicitor and going with one who are based closer to the property. There are lots of properties in the area that have this issue so a lot of the local solicitors are use to dealing with this sort of thing.

It's not always a bad thing to have a fresh perspective. If one of the others did this stuff all the time and waved the first policy through as you seem to have wanted, you would have been even more upset and out of pocket had something gone horribly wrong with the property. And if the others are more experienced in a good way, they also would have advised you and the lender against accepting the first policy.
The lender is your solicitor's client too. She can't, nor should she, edit her advice for them based on you disagreeing with it.
Yes it's painful but it's much better to go through the pain now and know you are well protected.

Lots of us do get it. Honestly. I didn't get to buy the first house I fell completely in love with because of damp and the lender taking the valuer's advice that work needed to be done immediately that we couldn't afford to do. I also get that it's incredibly hard to buy a house now and would love the whole thing to be easier for you, and I'm sorry it's so upsetting. But it's really not your solicitor's fault, this is just one of lots of different things that is making it hard and you're blaming it all on the one person who is actually helping you.