Solicitors holding proceeds of property sale until % split agreed

[wezc4]

Hi all,

 

I bought a property with an ex partner many years ago. I managed the property for the first few years before handing it over to a managing agent.

 

The property was in my name as he was out of the country as the time of signing the mortgage. No declaration of trust was put in place but it was always agreed to split it 50/50 and there is an email showing this (and that intent).

 

The property was sold 2.5 years ago and following a previous legal matter, where the ex wanted access to the property's accounts, my solicitor at the time, who sold the property, agreed to hold the proceeds of the sale on account until we agreed the split.

 

Where I'm at is that I am still agreeing to 50/50 whereas my ex partner wants more (he thinks I benefitted from re-mortgaging the property which I didn't and various other things which are not correct).

 

My solicitor who dealt with the sale has now handed this matter to a Civil Litigation / Family lawyer in his firm who now wants £500 on account to get going and then £250 an hour + VAT. I simply can't afford this.

 

I see this matter with my ex dragging on and on (as have previous matters to cause extra pain and maximum cost) and I do not wish to rack up huge costs which will only benefit the solicitors in the end. Their quote of what it could cost up to would eat up the entire 50% share I am owed.

 

My questions are :

 

- can I handle this matter on my own for now?

- If I need a solicitor in the future can a junior, less costly person handle this? Anyone know how much or where to go?

- If I went to another solicitor what happens to the money held on account?

- What law prevents me from taking my half as it was in my name anyway?

- Can I be taken to court if we can't reach agreement?

- Is there any other information that could be useful for me?

 

Thanks so much - I really appreciate any feedback or input you have

[king12345]

Best and cheaper thing to do would be to agree to the percentage directly with your ex, explaining that solicitors fees might be so expensive to end up with nothing.

If your ex is unreasonable you should take a practical approach and maybe accept a percentage smaller than 50%.

This is grossly unfair, but if it works out that you'll end up with more money than going via solicitor, then be it.

It's one of these things whereby the only beneficiaries are the solicitors.

Offer a 60/40 split and see if your ex accepts it.

As said, grossly unfair, but better than nothing

[Old Cogger]

always split 50/50 cost a lot more in time/monies these so called solicitors = you will be out of pocket else, also make sure a paragraph of settlement states no further claim to any/or pension rites / inheritance

I wish I had known about that clause and refused to agree, would be better off now as I lost out big time, and the guilty party benefited.

[wezc4]

Hi King1234 and Old Cogger,

 

Thanks for your posts, agreed, a settlement clause is a must.

 

I think both my ex and I are in agreement that we wish to avoid solicitors and extra costs. At the moment I'm saying 50/50 and he's saying he wants 100% so we're in quite different positions..

[CrappoMan]

Are both the property and mortgage in your sole name ?

[king12345]

100%???

Well at this point tell him to go through the solicitors and he won't get anything.

Is he mad???

[wezc4]

Are both the property and mortgage in your sole name ?

 

 

Yes, both were in my name only

[wezc4]

100%???

Well at this point tell him to go through the solicitors and he won't get anything.

Is he mad???

 

Yes, completely - he has a history of doing this type of thing

[CrappoMan]

Yes, both were in my name only

Then on what LEGAL basis is the solicitor witholding the funds ?

 

They should be giving ALL the funds to the person named on the deeds, after the mortgage is paid off.

[wezc4]

I keep asking them this on email and I keep getting the same response - the proceeds are being held on account until the split is agreed. (I believe this is in relation to a previous legal matter, which went to court, although he didn't turn up, where he wanted access to records / accounts relating to the property). I will go back and ask again. I can never get the solicitor on the phone and so have to send emails and worry that each email is going to cost £30 odd quid.

 

Can they charge before your have officially signed the terms and 'instructed' them?

[king12345]

Then on what LEGAL basis is the solicitor witholding the funds ?

 

They should be giving ALL the funds to the person named on the deeds, after the mortgage is paid off.

 

I think the solicitor is acting upon this: "No declaration of trust was put in place but it was always agreed to split it 50/50 and there is an email showing this (and that intent)"

[CrappoMan]

I think the solicitor is acting upon this: "No declaration of trust was put in place but it was always agreed to split it 50/50 and there is an email showing this (and that intent)"

I'm sorry, I dont buy that. The email has nothing to do with the legalities of the sale, otherwise everyone would 'invent' an email to get access to someone else's money.

 

Legally, the money is the OPs. If the ex wants some, he has to sue her in the CC for it.

[king12345]

I'm sorry, I dont buy that. The email has nothing to do with the legalities of the sale, otherwise everyone would 'invent' an email to get access to someone else's money.

 

Legally, the money is the OPs. If the ex wants some, he has to sue her in the CC for it.

 

Very true, but if the email has been sent by the op who didn't contest the validity of it, then the solicitor will squeeze everything out of this deal.

[CrappoMan]

If the OP instructed the solicitor and told them about the email, then it's time to re-instruct and tell them to ignore the email.

 

If the solicitor is acting against the OP's wishes and using knowledge of the email as an excuse to delay distributing the proceeds of sale, then it's time to make it clear to the solicitor that they act on her instructions and hers alone.

 

To the OP, go to the solicitors and tell them this:

"As I was sole owner of the property and sole holder of the mortgage, I want the residual funds from the sale of the property forthwith. If my ex thinks he has a claim on any of the funds then he can take me to the county court. Any other action by yourselves could be seen as acting against my instructions and in the interests of a third party. This will inevitably lead to a complaint to the relevant governing body."

[wezc4]

Thanks for the feedback guys, really appreciate it - I have emailed the solicitor and said exactly that. Will update when I get a response

[steampowered]

The solicitor probably doesn't want to get sued by the ex if he claims money was paid to the wrong person.

 

If the solicitor won't release funds you may ultimately need to issue a 'Part 8' claim to ask the court to decide who the funds should be paid to.

 

I don't know the full circumstances, but as the house was in your name, and assuming your ex's name is not on any of the documents, I would have thought the money should all be paid to you? The partner could start a court claim if he has a legal basis for claiming an interest in the property (such as payment of part of the mortgage).

 

There are legal formalities which apply to the declaration of a trust relating to land (and other agreements relating to land). The Law of Property Act 1925 (http://www.legislation.gov.uk/ukpga/Geo5/15-16/20/section/53) provides that declaration of trust in relation to land needs to be proved in signed writing. An oral agreement in relation to land is not enforceable. Similarly the email you have to this effect might be legally void and unenforceable even if the intent is completely clear. I suppose claiming 100% of the funds if your ex won't come to a sensible negotiated settlement is a possible negotiating position.

[wezc4]

Hi Steampowered, thanks for your post.

 

He is not named on the mortgage or anything else.

 

At the beginning we both invested the same amount of money to buy the property and furnish it and it was agreed we would split the property 50/50. I wanted us to put a declaration of trust in place but he didn't see this as necessary. All there is therefore are various emails about the property and what we both put in and that we said we'd split it at the end. Nothing is in writing or signed though.

 

Here's the email I got back yesterday from the solicitors:

 

"The money cannot be released to you, even though you are the sole owner, because when the money was placed on account it was done so on the understanding that it would not be released to either you or you ex-partner until either an agreement is reached as to how the money would be distributed or the court orders how it should.

 

The agreement is therefore between you, us and your ex-partner and as solicitors we have to keep to our word and cannot go back on any agreements made."

[steampowered]

If the solicitor correct to say that is what was agreed in relation to how the money would be dealt with?

 

If so, you will need to either reach agreement with your ex or initiate what is known as a 'Part 8' claim. This is a type of court claim where the court is asked to make an order telling the solicitor who the money should be paid to.

 

It is better to reach an agreement with your ex if you can, and document that in a short agreement (the solicitor should be able to help with that). The carrot for him is that he won't get anything until this is agreed.

 

The stick is that, if you are forced to initiate a Part 8 claim and the court makes an order which is closer to what you are asking for than what he is asking for, he will would usually be ordered to pay your legal costs out of his share of the property.

[wezc4]

Hi steampowered,

 

Thank you, you are clearly very knowledgeable on this matter.

 

I am trying to clarify this' agreement' with the solicitor as we speak, I don't yet understand the reasoning behind it... was it in my interests and to protect me? Or to ensure the solicitors would be guaranteed more work further down the line...

 

I am trying to agree the 50/50 and have stated this several time with the ex-partner.

 

Does he have any grounds at all, on any basis, to raise a claim or the Part-8 against me?

[steampowered]

I am trying to clarify this' agreement' with the solicitor as we speak, I don't yet understand the reasoning behind it... was it in my interests and to protect me? Or to ensure the solicitors would be guaranteed more work further down the line...

 

If there was such an agreement, the reason behind it would have been to allow the solicitor to act on the sale.

 

From the solicitor's perspective, he doesn't want to get sued by somebody for paying money to the wrong person. Most solicitors would refuse to act if they have reason to believe that they might be sued.

 

The solicitor's role now should simply be to pay out money to the correct person, once that has been agreed or the court has decided. There is no particular reason to incur a lot more fees. If you ended up in a Part 8 claim you could get a different solicitor to run that claim. What did the solicitor quote for actually?

 

If you did not agree to the solicitor holding the money pending an agreement as to who it should be paid to, then I suppose the analysis might be different.

 

Does he have any grounds at all, on any basis, to raise a claim or the Part-8 against me?

Absolutely. If your ex partner thinks he is entitled to a share of that money, he could raise a Part 8 claim asking the court to order that a share of the money should be paid to him. The court would then decide who the money should go to.

 

Whether he is prepared to go through the expense of actually going through with it is another question entirely.

[wezc4]

Hi steampowered,

 

I do not recall agreeing to the agreement (holding the funds until property split agreed) and I'm still waiting for an update. Either way though it sounds like it's in place and this is this situation I'm in.

 

Here's are some extracts from the solicitors TOB letter (I've taken out relevant names):

 

It was good to speak with you a few days ago by telephone and may I take this opportunity to thank you for instructing XXX to advise and assist you in relation to this matter.

 

In order to formalise the basis upon which you instruct this firm I write to provide you with a Client Care letter and a copy of XXX Terms and Conditions of business.

 

I should be grateful if you would consider this letter carefully before signing the same and returning a copy of the signed letter to me at our XXX office.

 

This letter and the enclosed terms of business explain the basis on which XXX will carry out your instructions.

 

The objectives in relation to the work that XXX will undertake on your behalf are:

 

To advise and assist you in relation to the dispute as to the beneficial ownership of XXX.

 

 

The issues involved with your matter are:

 

XXX has now been sold and the proceeds of sale held on account. You are content to divide the net proceeds of sale equally with XXX but he seeks an increased share of the net proceeds of sale after a rough form of equitable accounting has taken place.

 

The options available to you are:

 

To instruct me to write to XXX setting out your further instructions in the hope that matters can be resolved without the need for court proceedings. In the meantime, and whilst you are considering this letter and forwarding a signed copy back to me, I would send XXX an email to confirm that you are in the process of formally instructing XXX to assist you in relation to this matter and that we will be in touch with XXX again as soon as we are formally instructed.

 

The next steps in this matter are:

 

You will:

 

Consider this letter and XXX current Terms and Conditions which are attached before signing one copy of this letter and returning the same to me.

 

I will then:

 

Advise and assist you in relation to this dispute from the pre-action stage to the stage where proceedings are issued and concluded if necessary.

 

 

Our Charges

 

B. Time-spent basis

 

Our charges will be based on the hourly rate of the fee-earner involved, according to the time spent on the matter. Each action on the file will incur a minimum of a 1 unit charge.

 

My hourly rate is currently £250 plus VAT [and therefore each unit of time/six minutes spent on your matter will be charged to you at a rate of £25.00 plus Vat). I will advise you in writing if charging rates are to be increased.

 

Routine letters, emails and telephone calls that I make on your behalf or that I receive will be charged in units of one-tenth of an hour. Non routine letters and calls made and received will be charged on a time basis of 6 minute units. Time spent will also include meetings with you and perhaps others; considering, preparing and working on papers.

 

Vat will be added to your charges at the rate that applies when the work is done. At present VAT is 20% .

 

If XXX do not complete the work, you will be charged for the work that has been carried out up to the date that you cease to instruct this firm. Our bill will also include VAT and expenses. XXX may retain your case papers and documents until we are paid in full.

 

Cost Estimate

 

Turning to the question of an estimate of my firm’s fees, it is always difficult to give an accurate estimate of what our charges are likely to be. However, on the basis of the information you have given me, I estimate that the next stages of your matter will involve liaising with XXXX with a view to negotiating a settlement which I estimate is likely to cost you between £500 and £1500 plus Vat.

 

Thereafter, I will agree each section of the work with you to include the cost of that work so that you are at all times fully aware of the work that we will undertake on your behalf and what we will charge your for undertaking that work.

 

As an overall estimate of the likely total charges in your case if it is necessary to issue court proceedings and the matter proceeds through the courts process I estimate that your charges could increase to in the region of between £7000.00 – £15,000.00.

 

It may be necessary for us to review the estimate of the total charges, but these will not exceed the estimate unless we have first discussed this with you and we have confirmed the revised estimate to you in writing. The cost estimates that we have set out above are not intended to be fixed charges and they exclude the fees of any Barrister, expert witness or Vat on their charges, and any disbursements such as mediation (disbursements is another word for out of pocket expenses).

 

Please be aware that it is this firms policy to not instruct Barristers or experts without payment of cleared funds from you. This is because we are liable for the Barristers or experts fees when we send out instructions to them.

 

In order to meet any initial expenditure I wonder whether you could make a payment of £500.00 on account of costs and disbursements within the next few days.

[steampowered]

If you do not recall agreeing to the agreement, I would send an email back to the solicitor stating this. Something along the lines of you do not recalling agreeing to the funds being retained on account until an agreement was reached, and could they please remind you exactly what was agreed.

 

I've just noticed that the property was sold 2.5 years ago which is an awfully long time for the money to be sitting in their client account. You may well have agreed to an arrangement you forgot about but the solicitor should have details on file.

 

It is certainly worth writing a letter to your ex pushing for his agreement as to the split and indicating that it will be necessary to have the court decide if (which may involve him being ordered to pay your legal costs) if agreement cannot be reached. This could be done by you or by the solicitor, ideally it would come from the solicitor but there is no reason why you couldn't try to reach an agreement with your ex first and involve the solicitor later if that isn't possible.

 

You are free to instruct a different solicitor to deal with the dispute if you prefer. The new solicitor would simply inform the old solicitor once agreement has been reached or a court order issued.

[SuperVillain]

 

I've just noticed that the property was sold 2.5 years ago which is an awfully long time for the money to be sitting in their client account. You may well have agreed to an arrangement you forgot about but the solicitor should have details on file.

 

 

Also OP, in accordance with the solicitors accounts rules I think they should be accounting to you for any interest (if any) that money has earned whilst sat in the client account.