Comm property tx. Solr must have specific type of insurance in order draw funds.

T

Tomjim

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I recently purchased some commercial property . I agreed an amount with the solictor for his fees in transferring the property into my name.

I then got loan approval from Ulster bank. The difficulty is that apparently Ulster Bank are now insisting that the solictor must have a specific type of insurance in order to draw down the funding from Ulster Bank, or the solictor drawing down the funding from Ulster bank must be on an approved list. I am not sure of the specifics but this is how it has been explained to me.

The problem now is that my solictor has contacted me and advised me that he has arranged for another solictor to draw down the money from Ulster Bank, but this solictor is looking for a fee of €400 plus vat. This is in addition to the fee which I agreed with my solictor.

What are my options here.

Note the contracts which I signed have put a closing date of 20th May for the transfer of the property. If this deadline is not adhered to then the seller's solictor has the option of charging me an additional 12%.

Any advice would be greatly appreciated
 
Either you or your solicitor have been asleep that you only noticed this now. What is the point in paying another solicitor an additional fee. This should have been noticed prior to today.

With all the messing and problems with Solicitors, there is no point in blaming the Bank. Sorry to tell you but have you thought of using a different legal team.
 
Your solicitor should be aware of the condition of insurance if he had read the documentation provided by Ulster Bank once it was included. If he didn't read it then he's not doing his job and you shouldn't be paying him anything - you are paying him to make sure that the transaction is completed properly and that includes making you aware of the Ts & Cs the bank have put in place.
It appears he didn't read the conditions from the bank and has fixed the problem by getting a competent solicitor to do the work for him.
I'd be either getting the other solicitor to do the work in its entirety for you or push your solicitor hard to fund the error that he created by not doing his job properly.
I would also be looking to him to negotiate you out of any interest being applied to you due to his inability to complete on time (obviously that is once you or the bank didn't cause any other delay outside of this).
 
There are two issues here.

After the fallout from a few solicitors recklessly giving commercial undertakings to banks they could not fulfill, professional indemnity insurance premiums went sky high last year. Some firms could only afford cover as long as they did not get cover for commercial undertakings.

In the interim the Law Society has now told all solicitors that they feel they should not give commercial undertakings even where they do have cover. They are advocating that the bank uses its own solicitor.

So it is more likely that your solicitor does have cover but is at risk professionally if they do give that undertaking for you and are in the position of saying to the bank that they have to use their own solicitor.

All solicitors are in the same position and this is something new that your solicitor could not have predicted a few months ago.
 
Set out in writing why you should not pay it. If the solicitor insists, p
Pay it under protest as you need to get the job done.

Then complain to the Law Society after the job is done.

Brendan
 
Vanilla said:
So it is more likely that your solicitor does have cover but is at risk professionally if they do give that undertaking for you
Click to expand...
Am I right in thinking that the risk to the solicitor only relates to their own competence? If they do the job right, there is no risk - right?
 
I agree with Vanilla on this. Banks should employ their own solicitors in commercial transactions rather than forcing the borrower's solicitor to act for the bank at no cost to the bank.
 
Brendan Burgess said:
Set out in writing why you should not pay it. If the solicitor insists, p
Pay it under protest as you need to get the job done.

Then complain to the Law Society after the job is done.

Brendan
Click to expand...

Won't get very far as solicitor is following law society recommendation. And the fee is a fee for the banks solicitor- not an extra fee to their own solicitor. Or didn't you read my post?

Complainer said:
Am I right in thinking that the risk to the solicitor only relates to their own competence? If they do the job right, there is no risk - right?
Click to expand...

Yes. Law Society considers it too much of a risk for solicitors to act both for the bank and their client. The bank should have their own solicitor. As to whether the bank forces the client to pay an additional fee to their solicitor, that is down to market forces. Even over the last few years, before new law society recommendation, banks often had their own solicitor act in commercial loan transactions- for eg Bank of Ireland often did this.
 
Thanks for all the replies. However I am confused about one issue which Vanilla raises.


I am paying the fee of €400 plus vat directly to my solictor which is the fee for the second Solictor. (I hope this makes sense). However why is the bank not paying this fee or why am I not paying this solictor directly myself, on the instructions of the bank, ie It was the solictor who organised the second solictor not the bank.

Also is it too late to change my solictor at this stage.
 
I assume if the bank employs their own solicitor to examine title and put mortgage in place they will pass on their fees to the borrower
 
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