Money kept back from sale of house to fix private water supply.

[newnamechange1234]

We bought our house 5 years ago, and money was kept back from the sale to sort out the private water supply. We have many times over the years tried to get this water sorted and money released for this, but the seller/sellers estate agents have refused to release the money to us.

It has all come to a head now as I am starting a business from home which requires me to have a clean water supply, and a sample has revealed that we need extensive filtration done to improve the water supply coming into our house. This has to be completed and a certificate from Food Standards Agency before I can start my business. We have been boiling our water and using bottles water up to now, but really want this water sorted. It will cost us approx £4000, but we may be able to get a grant for £800 of it.

Anyway, when my husband tries to phone our estate agent to deal with it, he always seems to be out or busy, and won’t take his calls, we have tried going to his manager but can’t seem to get anywhere. He has tried to phone the sellers estate agents but was told they are unable to discuss the matter with him, which is fair enough.

He is thinking of giving our estate agents a deadline to deal with this, eg 2 weeks and then instructing our estate agents to take the sellers estate agents to court for the money, is this a good idea?
Does anyone have any advice on what to do? Thank you.

Thank you for all your comments.

It’s actually been my husband that has been dealing with all this and the estate agents/solicitors etc, and I mentioned to him about all your comments here about doing the work first, and getting paid later, and about it being 5 years so it’s maybe too late.

He looked up the paperwork that we got at the time, there doesn’t seem to
be a deadline for the work to be completed, and there is no stipulation that the work has to be completed first.

Just that there is a sum of money held back (not sure where it is held) to go towards improving the private water supply. It doesn’t say who is to arrange for the work to be carried out. So if the sellers were to arrange the filtration work now then the money would be released to them, but if we arranged the work, then the money would be released to us. Paperwork is very vague, unfortunately.

My husband has been trying to get this money released to us all this time as we have been trying to get this water sorted, and have got fobbed off each time. We were under the impression that we could get the money first before having the work done, as we would have shown a quote for the work.
Previously both solicitors agreed with us that we should have the money, but the sellers wouldn’t agree to that, they thought they should have it, despite doing absolutely nothing to fix the water. In January this year this whole situation was passed to the litigation team to be resolved, and lo....we are now nearly through August and we have heard nothing back. When we chase them up about it, the solicitor is ‘ on a call, holiday, ill, not in be office’ and wont return our emails/ calls. This is what I mean about it taking 5 years.

You've had unsafe water for 5 years and not done anything about it?! Just get it fixed!

As I said in a previous post, we have been boiling our water and using bottled water. We couldn’t afford to get it done ourselves, hence why we have been constantly chasing the solicitors for the money to be given to us, and then we would be able to afford it.

This really doesn't make sense.

As Collaborate says, this sounds like a mortgage retention, i.e. your mortgage lender has held some money back which will be released to you once you have fixed the water supply. The sellers would not be involved. They would have no say in whether or not the money was released. However, you say the sellers have to agree to the money being released.

You have also contradicted yourself. In an earlier post you said that the money would be released once a satisfactory water sample was obtained. You now say that the work does not have to be completed first.

I really don't understand what is happening here at all.

Can you explain what has actually happened.

You got your mortgage. You paid the sellers. You now have your mortgage to pay.

The water was unsafe. So the sellers agreed to give some money back to cover the cost? Is that what happened. Because that's insane. They should have just knocked the cost off the price of the house.

OP - take all the paperwork you have, sale contract, mortgage deeds and anything else, to another solicitor - neither you nor your husband appear to have any clue whatsoever. Nothing you post makes any sense. Or your dh is pulling a fast one... Have you seen anything for yourself?

Ok so....

We bought house for 300,000.
5,000 was kept back (that’s all I know- kept back how, where or by whom, I don’t know)

This 5,000 was to be released to whomever got the water filtration upgraded to such a standard that a satisfactory water sample could be obtained.

So if we fixed the water, we got the money, and if the sellers fixed the water they got it.

So, the sellers only actually received 295,000 of the money we paid, and think that the last 5,000 is theirs.
But we think the 5,000 should go to us as we are the ones now fixing the water.

So this 5,000 has been floating around somewhere all this time and nether the sellers or us have been able to access it.

Both solicitors previously agreed that we are due the money. But they won’t/can’t actually give it to us, (we don’t know why) and this is what we have been fighting for. And the solicitors are now ignoring our calls, etc.
They said they have passed it to the litigation team in January by nothing has happened since.

I am starting a new business from
Home and need satisfactory water, and have had a sample done which has proved the water is unsafe. We are now trying again to get this money to help us do the necessary work. The paperwork doesn’t say anywhere that the work has to be completed first before receiving the money. We don’t have the funds readily available to pay ourselves first, we would need to take out a loan, we really need this 5,000.

To the poster who mentioned my DH was pulling a fast one, what do you mean? I haven’t seen any paperwork, because he dealt with it all at the time. If I asked him he would easily show me the papers, I’ve just not felt the need to look.

To the posted who mentions

You have also contradicted yourself. In an earlier post you said that the money would be released once a satisfactory water sample was obtained. You now say that the work does not have to be completed first.

Yes I seem to have contradicted myself, apologies. The first part about releasing upon satisfactory sample, was what my husband thought the papers said, as it’s been a while since we looked at them. The second part about not needing work done was what was on the actual paper when he went and checked.

Thank you all for your comments.

Nope. Still sounds highly implausible. There are large portions of this you don't understand.

Firstly, instead of holding back £5k from the asking price you'd simply reduce the asking price by £5k and sod any notion of having an ongoing contractual relationship with the seller in which it is apparently unclear whose responsibility it is to do the work. You would put that £5k saved towards sorting out the water problem.

If you were borrowing up to the maximum %ratio for your mortgage deal I could see that if the property was valued at £300k with a functioning water supply they would hold back some of the mortgage borrowings until you sort out the water.

Again, there would be no earthly reason why anyone sane would want to tie themselves in to an ongoing contractual relationship with the seller over this.

I would bet you any money you care to mention that either the money being retained is held by the mortgage lender, and you simply need to set out the water to get that money paid to you (perhaps fund it on a credit card until the mortgage retention is paid out to you), or that you received appalling advice. And the reason why the estate agents aren't taking your husband's calls is that they are fed up telling him they have nothing to do with it any more, and they're close to applying for a restraining order against him.

When you buy a house and crucial work needs to be done, the mortgage company can instruct monies to be held by the solicitors until such work has been completed BY THE PURCHASER.
We had to put a damp course in when we bought our house, then sent the guarantee certificate to the solicitor who then released the money.
This should be clear in your mortgage offer.
You need to do the work then the money will be released. It's nothing to do with estate agents or the vendors.

@Bezm

So it was as easy as that, you got the work done, certificate went to solicitors and money sent through?

You have a few options depending on what the terms actually were.
1)You talk about the paperwork being vague, but you also say you have not actually seen it. I suggest you collect all the paperwork/emails etc relating to your house purchase and go through it with a fine tooth comb to try and work out what you know and what questions you need answering before you do anything else.
2) Your solicitor should be the one to deal with this or at least to explain to you what you need to do to make progress. If they are not returning your calls, I would go to their offices and refuse to budge until you had an answer or a confirmed meeting with the solicitor.
2) You could engage a new solicitor, but they would need to have access to the paperwork and I don't know if that is normal practice.
3) If 5000 was held back from the mortgage you need to contact your mortgage provider.
4) Why was the matter referred to the litigation team? Surely this would only happen if there was an unresolvable dispute about the money and that litigation was being taken against another party. If so Who? and Why?

In the nicest possible way OP, you seem a bit naive. You need to inform yourself as far as you possibly can. You should have done this 5 years ago. Can't believe you have lived with having to boil water for 5 years!

It sounds like something has gone wrong here. I don’t know why any solicitor would have advised you to go for a rentention for this situation - surely as other say you should have just paid 295k.

I suppose the only issue is if the water question was speculative, but again I think your solicitor should have advised you to establish the position.

I’d be ringing demanding a meeting with my solicitor (and if he won’t agree a managing partner). Sit down and be blunt your vendors or they are paying it, because either there is a valid agreement and your vendors are not releasing funds (in which case you should be going to court) or your sols made a mess of the agreement and their PI insurance will be paying.

Agree with recent posters
Find the paperwork
Read it
Request a meeting with your solicitor
If they won’t meet with you within say 2,weeks engage another solicitor
Retentions are not that unusual
Key is to have it spelled out on what basis the retention is to be released

OP seriously - just check the paperwork yourself. All this Chinese whispers from your husband who either doesn't understand what the issue is or is hiding something. What you are typing does not make sense.

It sounds like the bank/building society put a retention on your mortgage offer of £5k. This is because they felt the house needed £5k of work to be worth the agreed price. So if you applied for a £300k mortgage, they would only give you £295k not £300k.

Unless you paid an extra £5k by increasing your deposit, your vendors must have either reduced the price by £5k or expected you to pass along the extra £5k once released by the mortgage company.

To get the extra £5k released you need to completed the works required and provide evidence to the mortgage company of it being done within the specified time frame. They should then release the final £5k.

Your repayments will go up when the final £5k is released as the amount you are borrowing will have increased from £295k to £300k.

The missing information here is what the agreement was with the vendors. It seems very odd that they would have agreed for you owe them the last £5k on the purchase price for all this time..

How was all this not explained in detail at the time by your solicitor??

You and your husband just need to go to your solicitors office. Don't bother with the phone. Just go.

If he's isn't available, ask to speak with a junior employee. Just something to get the ball rolling and then find out what on earth is going on.