Agent or Solicitor negligence missing stamp duty deadline?

by Readers Question

8:26 AM, 3rd May 2016
About 2 years ago

Agent or Solicitor negligence missing stamp duty deadline?

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Agent or Solicitor negligence missing stamp duty deadline?

Just wondering if anyone can give me some legal advice please? It centres around a property purchase which was due to complete by March 31st, but never completed as it missed the deadline for the 3% stamp duty surcharge.banana skin

The time line is as follows.

Purchase agreed at the end of January.

Shortly after I received a memorandum of sale from the estate agents with a cover letter stating
“We will of course be in regular contact throughout the process and will offer our full assistance at all times to ensure that the sale progresses smoothly”.

Shortly after agreeing the sale via the estate agent, I received a telephone call from the estate agent’s dedicated sales progressor to introduce himself and assure me of his role. I made it clear to him of the deadline to complete by March 31st.

The conveyancing solicitor was instructed with clear instruction of the March 31st deadline.

The searches and survey were carried out and the mortgage offer was received in good time.

My solicitor raised enquiries with the seller’s solicitor on March 10th.

On March 23rd I became concerned as I hadn’t heard anything so I made some phone calls to find out what was happening. When I called the estate agent’s sales progressor he didn’t seem to know what was going on and then decided to start chasing things his end. Unfortunately this was all too little too late though as there were two bank holidays between March 23rd and March 31st and the mortgage company require five days notice to draw down funds.

Unfortunately the £4,800 stamp duty surcharge was not something I was not willing to pay as I felt I had been let down by other people whom I thought I could rely on. I ended up withdrawing from the purchase and loosing out.

As a result of the above I estimate my losses to be the following.

Aborted searches and survey £400
Costs to arrange and view other properties (time, petrol etc) £600
Lost profit that I would have otherwise received (£600/m x 6) * £3,600
SDLT surcharge that I will now have to pay on a similar purchase £4,800

* had this purchase of completed I would have been receiving rent and making a profit by now.

As you can see, my losses are quite extensive here and I’d like to recover these losses from which ever professional party was to blame here.

I understand that estate agents, by law owe little duty of care to buyers? This particular agent is a member of The Property Ombudsman (TPO). I think that the TPO would be likely to agree with me that the estate agent were negligent in not chasing this case in nearly two weeks given the impending deadline but looking on their website it appears that the TPO only seem to award very small amount to buyers (around £500), even though they say they can aware up to £25,000.

Also, was the solicitor to blame? It appears that they raised their enquiries then just left it; for nearly two weeks until I chased them. As they were aware of the deadline, do they owe me a duty of care to follow up on things like this?

I understand that any solicitor looking to represent me on an issue such as the above would only work on a case by case basis (hourly rate) so their costs would soon exceed my losses.

Any advice appreciated.

Gary



Comments

Jon Pipllman

8:52 AM, 3rd May 2016
About 2 years ago

It probably comes down to what this line from your summary actually means

"The conveyancing solicitor was instructed with clear instruction of the March 31st deadline."

If the solicitor accepted the instruction on the basis that time was of the essence and the purchase must be completed by the deadline, then you may have some redress.

If the solicitor accepted the instruction on the basis that it acknowledged that the date was important, but did not guarantee to be able to meet it, or accept liability for your losses as a result of missing it, then it will be much more difficult for you to get anything from the situation.

What does it say in the letter of engagement from the solicitor?

In the first instance, the Solicitor will have a formal complaints procedure and you should consider starting a complaint formally down that route.

Neil Patterson

9:25 AM, 3rd May 2016
About 2 years ago

Hi Gary,

This sounds harsh, but I only have 2 Rules in business:

Rule 1 - No one will ever do anything you ask first time around

Rule 2 - If Rule 1 does not apply they won't do it right anyway

With regards to negligence:

Estate agents act for the vendor not the purchaser so to get any where really the vendor would need to complain to the TPO. There is no contract with the estate agents to chase your bank or solicitor.

On the solicitors side I would make a complaint direct to them and see what response you get as you can always escalate the complaint to the law society. However missing a planned date for completion is an extremely common occurrence unfortunately and not always the solicitors fault.

From past experience I doubt you would be able to claim for any thing other than an actual cost on the transaction eg £400. Future costs and potential losses you can't really quantify.

Steve From Leicester

11:03 AM, 3rd May 2016
About 2 years ago

Neil is right - the estate agent doesn't have a contract with you, you simply offered to buy a property from them. The estate agent works for, and is paid by the vendor, not you.

Equally I can't imagine a solicitor ever accepting an instruction on the basis that he would meet the stamp duty deadline because so many factors are beyond his control.

Even if you had somehow managed to negotiate such an agreement with the solicitor the best you could possibly hope for is the cost of the extra stamp duty. It was your decision to pull out of buying the property, so you couldn't claim for theoretical loss of rent or the costs associated with finding and buying a different property.

In short I think you're flogging a dead horse.

Steve From Leicester

11:15 AM, 3rd May 2016
About 2 years ago

PS You quantify your losses at £9,400. In reality you've lost £400 plus the opportunity cost of buying a property before the new stamp duty rate kicked in.

The latter is completely hypothetical. No court or complaints service (e.g. TPO) would accept that you'd lost £9,400

Puzzler

16:53 PM, 3rd May 2016
About 2 years ago

If there were still enquiries being raised on the 10th, you were on a hiding to nothing I am afraid. I had everything in place at the end of November and only just made the deadline, no chain, private sale. End of January was very optimistic.

Since you now have to pay the enhanced SDLT anyway, why did you pull out? Not your most rational decision....

stuart edwards

18:50 PM, 3rd May 2016
About 2 years ago

I agree with Steve.....your loses are mainly opportunity costs. Some might argue that given your concerns about the looming stamp duty changes that you could have made your offer price dependent on completion before 31st of March. That would have given the vendor incentive to push for timely completion.

Penniless Landlord

10:35 AM, 4th May 2016
About 2 years ago

In my experience property transactions are rarely completed in 8 weeks or less.

On two occasions we have bought property with no chain at either end and one took some 14 weeks to complete and the other 12.

It doesn't matter how good your solicitor is, some things take time and a bad (or busy) solicitor on the other end will always slow things down. In addition there is paperwork to be completed by the seller which again can slow things down if they are not organised.

What I would have done is made the offer conditional on the seller that if a certain date was not met, you would pay X amount less (50% of additional stamp duty for instance). Of course they may not have taken up your offer then.

Yvette Newbury

10:00 AM, 7th May 2016
About 2 years ago

If queries were still being raised on 10th March, and you waited until 23rd March to follow up on those queries it is unlikely that this would have gone through in time. However set in stone you viewed the completion date of 31st March it was only ever a target date for everyone else dealing with your purchase, unless it was specified in the sales contract. If that were so, then you would not have lost anything as your solicitor would have inserted a clause to state that it was by that date or not at all and ensuring you were refunded any costs associated with the aborted purchase.

Colin McNulty

17:18 PM, 7th May 2016
About 2 years ago

As well as agreeing with what people have said above about your inflated figures, I'm afraid that the only person responsible for not chasing the conveyance... is yourself. You solicitor is your agent, and will (mostly) act on your instructions, it's still your responsibility.

I too was buying a property, which had been agreed back in July 2015, which I only just completed in time to miss the additional SDLT at 16:15 on 31st March! And that was with chasing conveyancing issues *every week* for 9 months, and every other day for the whole of March.

Throughout the process I was fully up to speed with what was being asked, of whom, and when. There's only 1 rule in conveyancing: push, push, push.

As a slight aside, whilst I know it's frustrating, what you describe is how conveyancing solicitors work. They raise queries / request searches / write a letter etc, then the file gets put down. And it stays down until something happens which means they have to pick it back up.

I've got a conveyancing friend, and he has 70 cases to work on at any point in time! That's about 30 mins per week, per case. At no point is he ever scratching around for something to do and thinks: "I know, I'll pick up Gary's case and see where we're up to." There's just not enough time. That's conveyancing life.

So sorry, I'm afraid I think you'll get next to no where with this, other than maybe a partial refund of your £400, if you're lucky.

Yvette Newbury

9:33 AM, 8th May 2016
About 2 years ago

Reply to the comment left by "Colin McNulty" at "07/05/2016 - 17:18":

"I’ve got a conveyancing friend, and he has 70 cases to work on at any point in time! That’s about 30 mins per week, per case. At no point is he ever scratching around for something to do and thinks: “I know, I’ll pick up Gary’s case and see where we’re up to.” There’s just not enough time. That’s conveyancing life."
So true - which is why it is so important to call regularly for an update as it keeps your file towards the top of that pile!

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