Solicitor foul up on flat sale is going to cost me thousands!

[Virginiaplain1]

My mum was diagnosed with dementia and moved into a care home over 18 months ago. I have Lasting Power of Attorney over her financial affairs.

She owned a leasehold flat, the freehold of which was owned by a local housing association. We put this on the market earlier this year and completed on the sale at the beginning of September, when I received a final account from the conveyancing solicitors.

Today I have received an email from the solicitors asking for over £6000 in respect of a payment which should have been made to the housing association at the time of the sale. It appears there is a clause in the lease which states that they are entitled to a percentage of the sale price, based on the length of time Mum owned the flat.

The solicitor says that the HA did not disclose the existence of this clause in the enquiries made during the sale process.

I’m quite cross about this and am going to speak to the solicitor tomorrow morning.

Whose fault is this — the solicitor for not finding the clause in the lease, or the HA for not revealing its existence?

I’ve had a dig around and it appears that these clauses are not unusual in retirement properties, but that an Office of Fair Trading report in 2015 concluded that they were unfair, which resulted in a number of HAs and other landlords getting rid of them. Mum bought her flat in 2011.

Can anyone advise what tack I should take with the solicitors tomorrow - I’m certainly not going to just pay up without a fight!

Actually, that title should read is going to cost Mum thousands! Not me!

Well, no one has lost £6000 if the property would still have been sold had you been aware of the clause beforehand. Not sure what the loss is other than the disappointment of an expectation not being fulfilled.

The solicitor should have spotted it but it always needed to be paid so your mum hasn't actually lost out. It should have been drawn to her attention when she bought though. If the solicitor didn't that would be negligent.

Write to the HA asking them to waive the requirement of the 6k in light of the OFT report. If they refuse go through the complaints process on the basis it is a penalty being applied simply as a money making exercise and does not reflect any cost to the HA. it may be a matter for the Housing Ombudsman ultimately.

Social housing bought from councils/ housing associations are heavily discounted (the discount is dependent on the number of years you rented the property prior to buying). Under this right to buy there is a provision that if the property is then subsequently sold you have to pay back to the council/housing association a proportion of this discount. This is probably where the £6k comes in. It was a government provision set when council houses/flats were first offered for sale so seriously doubt your mother can appeal as it would have been explained when she bought the property.

Bestof I don't agree, with the OFT report saying the particular type of charge on a retirement property is unfair,
as op has indicated, then op has a good chance of a successful outcome to a complaint. Have a read of the report
<a class="break-all" href="https://www.google.es/url?sa=t&source=web&rct=j&url=webarchive.nationalarchives.gov.uk/20140402142426/http:/www.oft.gov.uk/shared_oft/consumer-enforcement/retirement-homes/oft1476.pdf&ved=2ahUKEwiX0bqSkpXeAhVErxoKHWyjCB0QFjAAegQIBBAB&usg=AOvVaw3cZT2mu61_euexuiVuZVGZ" rel="nofollow" target="_blank">www.google.es/url?sa=t&source=web&rct=j&url=webarchive.nationalarchives.gov.uk/20140402142426/http:/www.oft.gov.uk/shared_oft/consumer-enforcement/retirement-homes/oft1476.pdf&ved=2ahUKEwiX0bqSkpXeAhVErxoKHWyjCB0QFjAAegQIBBAB&usg=AOvVaw3cZT2mu61_euexuiVuZVGZ

How did you get on op?