Conveyancing: Deposit

[FredPuli43]

Contracts exchanged. I am the seller. Deposit of 10 per cent now in my solicitor's client account. I ask my solicitor to pay it to me now, not retain it. She replies that she cannot release it to me until completion in three weeks "because it is a contractual condition that the deposit must be held by the seller's solicitor in their client account until completion "

What contractual condition is that? Is it in standard conditions of sale? Certainly I am not aware of signing for any such term. It benefits the solicitor, not the client. If I had acted without a solicitor, the deposit would be paid to me directly

[Quizmonster]

I should have thought you, of all people on AB, would know the answer to that, Fred! Legal professionals have never, in my experience, failed to take whatever advantage of their clients the law allows.

[Quizmonster]

Something strange going on here, it seems. I'm puzzled.

[themorrigan]

Well ask to see the Contract. If its in there then you signed and agreed. If its not in there then she's telling porkies (highly unlikely).

[woofgang]

I think themorrigan has nailed it. I am not a legal beagle but have managed well in many situations by using the simple phrase "where is it written?"
btw if you were doing a DIY job, would you not have to put the deposit into an interest bearing escrow account?

[FredPuli43]

I have emailed her to ask that, themorrigan. I suspect that it is a convention for the benefit of solicitors. I have asked what term and in what contract and how it is binding on me. She's sitting on £100,000. She graciously added that "if I liked" she would have the accounts department calculate what interest accumulated until completion and her firm would account for it to me. Well, that's nice of them isn't it ? Her fees and disbursements will not be payable until completion.

[FredPuli43]

woofgang, once the buyer has paid the deposit on exchange , that deposit is lost to him. He cannot in any normal case get it back, and it is mine. Therefore there would be no point in his expecting or asking that I put into escrow. And equally there is no point, apart from their own benefit, in solicitors holding it as some kind of stakeholder.

[woofgang]

This looks interesting....who is she acting as agent for?
http://www.phewconveyancing.co.uk/articles/when-can-a-conveyancer-hold-the-deposit-amount

[FredPuli43]

She is acting as my agent as seller and that would be made clear in the Standard Conditions,as if it wasn't obvious enough. Note that the link above says that it is the seller's to do with it what he wishes. I have asked whether Standard Conditions say that the solicitor can keep the money pending completion. I doubt it, because that makes no sense.

[Buenchico]

Although the solicitor is acting for you, the conveyancing system places a duty upon her to ensure that the deposit is available both to you (if the sale is completed) and to the prospective purchaser (if you were to pull out of the deal). If she gave it to you now, you could blow the lot in the bookies and then pull out of the sale, leaving the other party out of pocket.

[FredPuli43]

That could happen anyway, Buenchico, if I did the conveyancing myself. She has no duty to the buyer.

[IggyB]

That's true is you did the legal work yourself, however I would suggest that people would be unlikely to give you large deposit sums for this reason. What you are describing sounds perfectly normal and reasonable to me. What would your buyer do if you simply left the country with their deposit? No buyer in their right mind would allow what you are proposing

[john6969]

This is very straightforward, I'm a Solicitor. The Standard Conditions of Sale, which are incorporated into the Contract, state that the Sellers Solicitors hold the Deposit as 'stakeholder' pending completion. If the Seller has a related purchase, this can be varied to 'Agent for the Seller' so that the money can be used as a deposit for the purchase only. This is to protect the Buyer, as there are a number of situations where the Seller could fail to complete and disappear with the deposit, leaving the Buyer with only a bare contract on which to sue. The Sellers' Solicitor gains no benefit from this arrangement.

[FredPuli43]

But they would have to, if I did it myself.Iggy. There'd be no sale otherwise. They pay the deposit to bind themselves to the purchase. I can enforce the sale and they can vice versa. If they don't like that, they can have exchange and completion on the same day. But what is the contractual term that binds me and which says that, because a solicitor is employed by me as my agent, the solicitor can sit on my £100,000?

[FredPuli43]

At last, john! So it is somewhere in the Standard Conditions, which I must, by necessary inference or by written acceptance, have agreed to be bound by.

[john6969]

I've had a quick look and it's in standard condition 2.2.5 of the Law Society Standard Conditions of Sale (5th Edition.), which is what you'll have signed.

On such a large deposit, your solicitor will have to account to you for interest earned until completion

[Peter Pedant]

Quiz-mo mo is being a little qui+mie Fred

It crossed my mind to ask why you didnt know standard Ts and Cs
but they do change over time.

I thought one of the Big Things about using a solicitor was the certainty that you would get your money (if he doesnt embezzle it of course !)
and that kinda implies he will hang on to it for as long as poss


I have only eva been given the whole sum on completion day

[FredPuli43]

Ah, PP, at least I had the wit to suspect Standard Conditions [see the OP] ! But my solicitor has a track record for saying that she can't do something because it's not the firm's practice or isn't legal when a) it should be, but the firm's practice benefits the firm and not the client and b) it is perfectly legal, and always has been (but not doing it benefits the firm, if only because it avoids the risk of their being in trouble).Big firms like hers do have an eye for their interests, and the juniors, senior associates and even some partners live a life of looking over their shoulder, in case the top partners complain.

She should have given me chapter and verse at the outset, when I first asked for the contractual term

[Peter Pedant]

well I'll be joiled !
and why did you not use licensed conveyancers ?

[FredPuli43]

Licensed conveyancers? I wouldn't trust one with freehold registered land, let alone a stack of deeds and 30 related interests in title, all of which had to be researched to prove title without affecting rights (as this was). I've got another one like that on the stocks, the development market picking up, and that's gone to other solicitors; letting a licensed conveyancer loose on ancient rights of eavesdrop, and a right to stabling (in the middle of a town, but that mattered years ago), doesn't bear thinking about. It's not a job for a bus driver who has joined an association !

[Barmaid]

Glad you sorted it Fred, but lol at your last answer.