House sale fell through after mortgage drawn down

[ThisisMax]

Advising against a particular course of action is not the same thing as refusing to act on a client instruction.

Maybe the OP’s solicitor should have emphasised the risk of drawing down funds before receipt of the signed contract from the vendor (although I would have thought that was pretty obvious). But failing to do so is not a ground for a formal complaint and won’t resolve the OP’s problem.

You hire a solicitor to do work that:
1. Is lawful and required by law.
2. To advise as to the most strategic and best course of action taking into account your current circumstances and potential future impacts

The OP's solicitor failed to outline the risk and impacts and failed to advise against. That is not acting in the interests of your client.

 

[nest egg]

Interesting thread, a friend of mine recently bought a home, and had similar suggestion from their solicitor. "If you're worried about rates rising, draw down early". In the end they decided to wait, but I suspect with the threat of rising rates, this type of thing could well start happening more frequently.

 

[Brendan Burgess]

The OP's solicitor failed to outline the risk and impacts and failed to advise against.

We don't know this.

If I were a solicitor, I would advise the client of the options, in writing.

1) You can draw down now and lock in the lower rate. But as we have not received back the signed contracts, we might have to return the money. This is low risk. But it could happen

2) We can wait until we get the signed contracts, but you miss the deadline for the lower rate and you will pay a higher rate for the next 5 years.

Which would you like me to do?

It is very odd that the OP says that he had not realised that the signed contracts had not been returned. In most cases I have been familiar with, the buyer keeps asking their solicitor "Have you got the contracts back yet?"

Brendan

 

[tom1ie]

Thinking outside the box here….but, could you contact the vendor who pulled out but said they’d sell in January due to CGT exposure- how much they’d be out of pocket? Could you maybe agree to meet halfway or something on how much they’d be out of pocket so that they’d proceed with sale?

 

[Sarenco]

If I were a solicitor, I would advise the client of the options, in writing.

Hi Brendan

Would you expect to get paid for drafting this letter of advice?

IMO there’s really no advice required here -the risks of drawing down the home loan before contracts are exchanged are screamingly obvious.

Sometimes folks just need to take responsibility for their own actions. It’s not always somebody else’s fault.

 

[Brendan Burgess]

Hi Sarenco

If I were a solicitor, I would make sure that if a client undertook a risky approach, I would point out the risks.

I don't think it's screamingly obvious to most First Time Buyers what is happening.

I would include the drafting of the letter in my overall fee.

Brendan

 

[ThisisMax]

We don't know this.

If I were a solicitor, I would advise the client of the options, in writing.

1) You can draw down now and lock in the lower rate. But as we have not received back the signed contracts, we might have to return the money. This is low risk. But it could happen

2) We can wait until we get the signed contracts, but you miss the deadline for the lower rate and you will pay a higher rate for the next 5 years.

Which would you like me to do?

It is very odd that the OP says that he had not realised that the signed contracts had not been returned. In most cases I have been familiar with, the buyer keeps asking their solicitor "Have you got the contracts back yet?"

Brendan

I agree Brendan. We dont know. But we do know that the OP is now in a less advantageous position than he would have been in had he recieved the correct advice. Thats a solicitor problem.

 

[ThisisMax]

Hi Sarenco

If I were a solicitor, I would make sure that if a client undertook a risky approach, I would point out the risks.

I don't think it's screamingly obvious to most First Time Buyers what is happening.

I would include the drafting of the letter in my overall fee.

Brendan

The whole reason you go to a solicitor is to get guidance so your choices, options, outcomes and consequences are clear so they should spell it out. Potentially expensive mistake.

 

[ClubMan]

I agree Brendan. We dont know. But we do know that the OP is now in a less advantageous position than he would have been in had he recieved the correct advice. Thats a solicitor problem.

We're not exactly clear on the timeline and precise nature of the advice so it's still premature to be pinning anything on the solicitor.

 

[Luternau]

Lots not clear here

Did OP instruct the solicitor to drawdown funds. The language used is ambiguous..'I discussed drawing down to get a lower interest rates' and 'because it was so close to closing the solicitor decided to drawdown'. The poster then goes on to say they were not aware the vendor had not signed contracts. From what is stated this seems secondary getting a lower interest rate.

The OP could clarify if they were aware the funds were being dewan down.

On a side note, where is it confirmed the OP is 'he', hence I use 'they'

 

[ThisisMax]

Lots not clear here

Did OP instruct the solicitor to drawdown funds. The language used is ambiguous..'I discussed drawing down to get a lower interest rates' and 'because it was so close to closing the solicitor decided to drawdown'. The poster then goes on to say they were not aware the vendor had not signed contracts. From what is stated this seems secondary getting a lower interest rate.

The OP could clarify if they were aware the funds were being dewan down.

On a side note, where is it confirmed the OP is 'he', hence I use 'they'

Even if he instructed the solicitor - the solicitor should have said no. Thats best practice and sensible.

 

[Brendan Burgess]

Even if he instructed the solicitor - the solicitor should have said no. Thats best practice and sensible.

I don't agree.

Personally, in the same situation, I , as the buyer, would have taken the risk. Most signed contracts are returned. If it meant guaranteeing a lower rate for 5 years, I would have taken that risk.

The OP has not lost out much through it going wrong. He would have had a considerable upside had it proceeded as planned.

Brendan

 

[ThisisMax]

I don't agree.

Personally, in the same situation, I , as the buyer, would have taken the risk. Most signed contracts are returned. If it meant guaranteeing a lower rate for 5 years, I would have taken that risk.

The OP has not lost out much through it going wrong. He would have had a considerable upside had it proceeded as planned.

Brendan

I dont agree Brendan!
Whatever about your attitude towards risk, thats different than what the solicitor should have advised. If she said you can do this but the risk is x,y,z then thats fine, but she didnt. If you know the risk you can decide to take it, or not.

 

[Brendan Burgess]

Agreed that the solicitor should have set out the risks and the consequences.

We don't know whether she did or not.

But let's say that she did not do so. And the OP sues her. What is his loss? Very little.

Of course, if the OP drew down the mortgage at a fixed rate, and the house purchase went through, he would consider himself a financial genius.

Brendan

 

[ClubMan]

As I said before, there are simply too many unknowns in this thread to start assigning and apportioning blame. And there are probably good reasons that every little detail cannot/should not be posted on a public forum such as this.

 

[mimes]

A friend had something similarish.

Before contracts were signed, a deposit was passed by the solicitor to the seller.

The seller then refused to sell but also refused to return the money.

My friend took legal action on the solicitor.

If the OP did not forcefully instruct the drawdown, I would see the problem being caused by the solicitor.

I can't imagine how a solicitor would drawdown outside the normal process even if forcefully instructed. Its their job to manage this correctly.

 

[Sarenco]

If the OP did not forcefully instruct the drawdown, I would see the problem being caused by the solicitor.

“Forcefully instruct”! Seriously, what does that even mean?

People have to take responsibility for their own actions.

It’s not always the fault of the solicitor/bank/government/whoever.

Sometimes people just take a risk that doesn’t pay off.