Close of Sale held over Indemnity Issue

[cySquirrel]

I'm just about to close the sale on a 3 bed semi in a new development, it was suppose to close last week. The solicitor informed me that they couldn't close the sale as the Indemnity for roads and green areas is in a companys name and not the directors/builders name, so they have to write to the bank and inform them of this. Worse case scenario, bank mightn't except this and ask for cheque back or the builders solicitor will change the name on the Indemnity but there reluctant to do that, which is worrying. Apparently the builder has sold 50 houses already and this is the first time this has been queried, my solicitor said its probably because the other solicitors didn't go through the final closing docs. Just wondering has anyone come across this problem before?, did it take long to resolve?

 

[MOB]

In my view, your solicitor is being unduly cautious. It is perfectly normal for a 'roads and services indemnity' to be given by a limited company. It is not normal to insist on getting indemnities from the directors in a personal capacity. I am a practicing solicitor and I sell for a few different builders, so my view may be slightly coloured by this, but on the (very rare) occasions that I get asked for a personal guarantee, I always refuse.

While it is certainly proper for your solicitor to appraise you of the fact that the indemnity is only as good as the person (in this case a limited company) giving it, the idea that the bank would have to approve the indemnity being from a limited company seems a little over the top to me. Would your solicitor do the same if the indemnity was coming from McInerney Homes or Ballymore? They are limited companies too..... So for that matter is the Bank.

Just to clarify one thing: I am assuming that the company giving the guarantee is the actual builder. Your reference to the indemnity not being by the 'Director\Builder' is slightly ambiguous.

 

[cySquirrel]

I did think that my solicitor is perhaps been overly cautious.
The company giving the indemnity isn't the builder, its a company not connected to the development, my solicitor mentioned something about a a licensed agreement with the builder and one of the directors, but theres two directors over this company. At moment I'm stuck in the middle, if my solicitor is saying they can't close and the builders solicitor is saying no, not sure whats going to happen.