Solicitor hasn’t returned deposit 7 weeks after purchase fell through

[stillkauri]

DS (first time buyer) was buying a flat and got all the way to exchange day when the sellers pulled out.(Actually the sellers had messed around giving him a date he had to exchange by - with 2 days notice - then said they weren’t ready only to pull out 10 days later)

The solicitor is holding the deposit (gifted by me) in their client account. They didn’t return it straight back when the sellers pulled out. I asked for it to be returned. Over a period of 4 weeks I emailed several times and rang twice - my calls were not returned.

Last week I emailed the solicitor’s ‘supervisor’. I was told they were waiting for me to provide a bank statement to show the money coming out of my account. I told them I hadn’t been asked for this, but supplied it. I was told that our solicitor would refund the money. That was last Friday. On Monday it wasn’t returned. Today I had an email saying it would be today. It wasn’t.

An additional issue is that DS closed his Help to Buy ISA to get the government bonus for the flat purchase. To reopen it he needs a ‘Purchase Failure Notice’ from the solicitor. I was told originally he didn’t need it (untrue - copied info from the bank). Then today I have been sent a form (from the banks website) to reopen the account which clearly says it has to be accompanied by a PFN…

How bad is all this? I’m shocked how they can keep the money when I’ve asked for it back. Presumably I won’t get interest on the money while it’s in the client account. Also DS is losing out on building his Help to Buy bonus - it’s £50 a month.

What do I do now?

I feel that DS would possibly get prompter responses as he is their client.

Law society or solicitor regulatory authority? Also there should be a senior partner with responsibility for complains handling so an e mail to them too

The law firm sounds a bit dodgy to be honest. Accepting a third party payment from someone who isn't their client is a bit of a red flag. I think your DS should be chasing too as he's their client and he's the one that they owe any kind of duty of care to.

Your son needs to be chasing his deposit back. Not his Mum.

So you son is buying the house but you have paid the deposit to his solicitors then ?

That's a bit dodgy if the accepted the payment i'd say

DS is on the autistic spectrum and he’s authorised me to act on his behalf. All the correspondence comes to me rather than DS.

calypso - I don’t think it’s unusual for a gift to be made. I had to do anti money laundering checks.

Thank you Kindle. I will work on finding the name of a senior partner. There’s no list on their website and when I rang reception I got a voicemail and no call back. I only found the name of our solicitor’s supervisor through the estate agent (who recommended the firm…)

I'm not a solicitor, but I am a professional regulated in a similar way. Our professional regulations specify that we have to pay interest on money held in a client account, and from a bit of googling, the SRA regulations say the same thing. So I suggest that you demand that the money is returned with interest when you contact the senior partner.

Gifts are not unusual (my dad gave us one to purchase a property) but normally law firms shouldn't accept money from someone who isn't their client. It's not to do with it being a gift per se but that you're a third party. It sounds like they did the right checks on it but, even so, lots of law firms wouldn't allow it. What would generally happen is that you give your son the money and he transfers it to the lawyers client account.

Is it one of these online firms as opposed to a traditional firm? They are a bloody nightmare to deal with.

Check out their complaints procedure and let them know the outcome you want, i.e. return of the deposit - with interest - and the PFN.

calypso well I hope they did the gift bit properly. It did come from
my account not DS’s. I remember the terms and conditions said that their bill had to be paid from DS’s account. Could that be causing the ‘difficulty’ in paying the money back to me?

Flossie I’ve googled that now - some of the results from firms say their interest rate is 0.1% on their client account. And they won’t pay if it comes to less than £20 - which it would be. Though their delay has meant I’ve missed out on getting around 2% interest in a savings account.

charlotte no, not an online firm. I will ask for the complaints procedure - I’m pretty sure it’s not online.

Not that it should make any difference to getting the deposit back but this firm are a ‘no purchase, no fee’ operation.

If your EA recommended them could they also chase for you? Their opinion of the firm may carry more weight as they send them business. I wonder if there is an issue with returning the deposit to an account that is not their client's. I would also check that DS has not missed a communication from them about this.

calypso well I hope they did the gift bit properly. It did come from
my account not DS’s.

So where does the Help to buy ISA come into it if you paid them the deposit directly?

Both can’t be true, is this causing them an issue? If your DS closed the ISA wasn’t the deposit money transferred from that account not yours?

donttell yes I’ll go back to the EA.Once they gave me the email for the solicitor’s supervisor and he got involved I thought it would be resolved. I’m coping him into correspondence now to no avail.

changing you can’t use a Help to Buy bonus for the deposit at exchange only at completion. He would only have transferred the money at completion. He closed it before exchange as it takes a week or so for the solicitor to claim the bonus prior to completion.

I have remembered that last year I transferred a gift direct to older DS’s solicitors.

The complaints procedure should be set out in the engagement letter.

I'm pretty sure complaints procedure should be on website. But anyway you would have had a client care letter setting out terms and conditions. That will tell you who the supervisor is.

Send an email to both solicitor and supervisor setting out complaint. Tell them if you don't receive a response in 21 days you will be raising a formal complaint with the law society.

www.lawsociety.org.uk/public/for-public-visitors/using-a-solicitor/complain-about-a-solicitor

I worked for a firm of Accountants who carried out yearly audits for clients who were Solicitors. Our Auditors often found money sitting in their Clients Account that should have been returned. It’s just them being lazy. I would send a letter, signed for saying if you don’t receive the money back in your account within 7 days you will be contacting The Law Society. I hope the Estate Agent knows of your problems and really shouldn’t be recommending them.

I’m waiting for the EA to return my call. Mindy I agree that they shouldn’t be recommending this firm.

eurochick and confessions thanks for that. I have tried to speak to the person who manages complaints (it says she can be contacted through their switchboard) Only an answerphone so I left a message. I will put it in writing later.

I have emailed the solicitor and her supervisor and asked for the return of the deposit by the end of today as I had been told it would be paid yesterday. Plus the Purchase Failure Notice.

That link you gave me confessions says I have to give the firm 8 weeks to deal with my complaint before I can go to the Legal Ombudsman. It seems a definite breach of the Solicitors Regulatory Code - they have acted in a competent and timely manner.

• Haven’t acted!

Nearly sorted - a senior solicitor from the firm rang me. The money was returned by ‘3 day BACS’ yesterday. The solicitor dealing with the case didn’t tell me that or respond when I asked today why I hadn’t got the money.

Senior solicitor said the Purchase Failure Notice doesn’t exist. The firm will write a letter stating that the purchase failed and hopefully this will do to enable DS to reopen the ISA.

Senior solicitor said the delay in returning the deposit was down to a ‘misunderstanding’ over me supplying a bank statement showing the account the deposit came from. I was only asked for a bank statement last week and supplied it a couple of hours later so I put him right on that. He couldn’t explain why it had taken so long to respond to my emails and calls and to return the money. He did apologise. I said I’d consider whether I will make a formal complaint.

@stillkauri I was interested to read that the senior solicitor advised that the Purchase Failure Notice doesn't exist. I wonder whether this is because HTB ISA is now closed and the official portal seems to have disappeared. But there definitely was a Purchase Failure Notice form on the HTB ISA portal for conveyancers to download and complete. It had to be completed by the "Eligible Conveyancer" and forwarded to you so that you can send it to your HTB ISA provider, who would reinstate your account. I believe existing HTB ISAs are still be operational until November 2029, but some options have become limited, so maybe the Purchase Failure Notice has been withdrawn.

Glad to hear that you've received the deposit back.