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Solicitor advice failure - possible professional negligence - property Section 20


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Hello. Your help and guidance would be appreciated. 

 

Background.

I instructed a solicitor to act on my behalf in the purchase of my first investment property. The property is a leasehold flat. The solicitor is well known to me as I had used them previously 3 times for all my main home purchases (all of which previously had been freehold properties). Solicitor was aware this was my first leasehold purchase.

This purchase took place during covid, I never met physically with the solicitor. Nearly all communication was dealt with via email/letter.

I received the pack a week before exchange/completion with a covering letter that stated "we are now ready to proceed with your purchase", "return all documents to us in readiness for exchange " and " if there is any item in this report that you do not understand or require us to clarify, please do not hesitate to confirm this at our meeting". It was quoted the leasehold information pack and stated it was enclosed "which shows audited accounts, copy buildings insurance and replies to standard leasehold enquires" Nothing else was mentioned/highlighted.

The pack enclosed offices copies and filed plan, copy lease, EPC, Property Information form, Fittings and contents form, Leasehold information pack, local authority search, drainage search and environmental search.

LPE1 document stated Section 20 works anticipated in next 2 years - yes, listed some work details -cost £4k. increase in service charge over 10% - no.

 

Situation

Solicitor did not highlight section 20, what it was, implications etc. Nothing said, highlighted or explained.

We have never heard of a section 20, nor knew what it meant.

We received a section 20 notice, which came as a shock some 6 months after completion.

Upon reviewing pack I can only assume that I made an assumption that the £4k mentioned along with the increase n service charge being no, that I assumed work if carried out would be merged with the service charge.

I didn't know what a section 20 was until I received the letter (post completion) advising that a section 20 was now in force and the cost would be £8k (including the building owners management fees).

If I had known about this, before exchange/completion, I would have withdrawn from the sale. 

 

Complaint

I raised a formal complaint with the solicitor who handled my purchase. 

Initial response was to decline to assist, stating I should have telephoned them if I had any questions.

I appealed response to complaint through their formal channel, in writing and then with another partner on the telephone.

Second Response received offering £2.5k without prejudice.

I appealed this response citing costs are £8k, please increase your offer. I did not enclose a figure I wanted as I wasn't sure whether that was the right thing to do, or not.

They have responded , without prejudice, full and final settlement, £2.5k (no increase).

 

What next ? -

I am not happy with the offer of £2.5k when the cost to me will be £8k+.. I was not expecting this cost at all.

The solicitors, in my view, removed my option to withdraw from the purchase, by failing to explain what a section 20 was, the implications of it etc.

 

I would appreciate advice on best option to now follow?

1 Going back to the firm again?

2. Going to the Ombudsman/SRA

3. Going to Small Claims Court.

 

All opinions appreciated, I have no legal knowledge. Thank you.

 

 

 

 

 

 

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1 hour ago, mantis shrimp said:

If prior to exchange of contracts you had been given advice that a cost of £4K was likely, what would you have done?

I would have not proceeded with the purchase.

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Thank you Mantis Shrimp for your opinion and information link. 

 

Am I right In thinking, once I've exhausted the Solicitors firms complaint procedure,  my next step will be to bring a claim via the small claims court? Or should I go first to the Legal Ombudsman, then if still not happy, the Small Claims Court? 

 

If I was to ask you for a % chance of success with this claim, would you be able to offer me a %? . 

 

And would that change (decrease) if I continue to proceed asking for the full cost of the section 20 to be met? (Would the Judge feel I shouldn't have expected the full amount and think badly of me for bringing a claim for the full amount?).

 

Thank you.

 

 

 

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Thank you. After now becoming aware of section 20 and what it involves via the Internet, I find it hard to believe now I would have proceeded based on what I have read. 

 

In my first complaint email I did say to them-  by them not advising me, they took my options away to either withdraw from the sale or to renegotiate the asking price. Has that hampered my claim?   (I don't think I would have renegotiated price personally as I am pretty risk adverse and as mentioned before, from what I've read, section 20s are messy and best avoided. With that knowledge I would have walked away.)

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This is was I put in my initial complaint - 

-          Your firm should have advised us further on the implications of the LPE1.

-          That only sending a copy of the LPE1 and inviting us to raise any queries was not sufficient.

-          That your firm should have discussed the LPE1 in more detail given the circumstances of us not having purchased a leasehold property before.

-          By failing to provide detailed advice, as detailed above, you removed our options at the very least to renegotiate the asking price or to walk away completely.

 

My partner and I would have withdrawn from the sale. We are risk adverse and with a better knowledge now of section 20, we would have viewed this as a complicated purchase, and withdrawn. We only mentioned the removal of our options, in the email above, to highlight the fact that this type of discussion would perhaps have taken place, but didn't, because no advice came forth from the solicitor.

 

 

Would you kindly confirm that, by us mentioning these options, we have endangered our claim to recover the full costs? (Just t want to clarify - as you said this earlier ( "But you have a strong case for saying that any damages should be assessed by reference to the full additional cost. I say this based on your answer to my first question - had your answer been different I would have said you have no claim."))

 

Thank you.

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  • 2 months later...
Posted (edited)

Good afternoon, I am currently completing the Letter of Claim and note the section (i) that I have to indicate if I am happy to refer dispute to adjudication & that I should propose 3 adjudicators or seek a nomination from the nominating body. I have spent hours trying to find out who this is and even approached the SRA who said they couldn't advise me.

 

Is someone able to advise me on this, as to where I can get this information from? (searched this site too and couldn't find the answer.). Thank you. 

Edited by Lunar69
wrong term used
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Quote

(i) An indication of whether the claimant wishes to refer the dispute to adjudication. If they do, they should propose three adjudicators or seek a nomination from the nominating body. If they do not wish to refer the dispute to adjudication, they should give reasons.

 

WWW.SRA.ORG.UK

 

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The following is all I can find.....but if the SRA don't know or wont advise then don't opt for an adjudicator ..reason The SRA cant advise or have any knowledge.

 

https://www.sra.org.uk/consumers/register/person/?sraNumber=667808

 

 

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  • Thanks 1

We could do with some help from you.

PLEASE HELP US TO KEEP THIS SITE RUNNING EVERY POUND DONATED WILL HELP US TO KEEP HELPING OTHERS

 

 Have we helped you ...?         Please Donate button to the Consumer Action Group The National Consumer Service

 

If you want advice on your Topic please PM me a link to your thread

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