Conveyancing problem - help please.

[luckystrike]

Ten months ago my friend paid a 10% deposit to his solicitor for a new apartment which was being built in a block of six. This solicitor then called him into his office where he signed his part of the contract of sale. The cheque for the deposit was lodged.

Now ten months later the construction of the apartment is nearing completion. However, the deposit has been returned to my friend's solicitor, with a message from the builder's solicitor saying that the builder has never signed their half of the contract, and as the sale price of the apartment has gone up by �50k, they are putting it back on the market, with the people on the waiting list being contacted first.

Obviously this has been a major shock, especially as my friend logically assumed that their solicitor would deal with the contracts on their behalf. This was one week ago, and no doubt someone else has now put a deposit down for the apartment. The other five people have had no problems with their sales as their contracts were signed by the builder at the time.

So where does my friend now stand? They signed their part of the contract in good faith, and the deposit was taken out of their account.

All advice and references would be greatly appreciated.

Thank you very much in advance.

[lady_p_gold]

Blimey that is an unusual one. I daresay you will get a better answer than this but it does sound as if there is a possibility of negligence on your solicitor's part .. maybe the Law Society could advise you as they probably have an ombudsman or something. Have you tackled the solicitor about it? How much one has to check on what your solicitor does I am not sure, but like you, I would feel that if it were in his hands then he or she should have ensured that it was all signed and sealed properly, or at the very least informed you if it was not.

[lady_p_gold]

Or your friend rather

[MustafaTickl]

You ask where your friend stands now. It is out in the street without an apartment. There is no contract, so no sale. This happens quite a lot in times of house price inflation. A purchaser must keep pushing and pushing to ensure that a seller signs the contract, to sit around for ten months having parted with money and not received a signed copy of the contract is silly. No compensation is payable, and the lesson to be learned is stay awake next time.

[jennyp]

Was the cheque cashed?

[luckystrike]

Yes, jennyp, the cheque was cashed at the time.

My view is that by them cashing the cheque, it constitutes 'acceptance' of the 'offer', irrespective of whether they signed their part of the contract or not.

Again, any further advice would be appreciated.

[MustafaTickl]

You are entitled to your view, of course. But in reality no contract was created by the cashing of the cheque.

[Didwot]

The only outstanding issue is whether the friend's solicitor had done thier job properly. If they had been more on the ball would it have been possible to exchange contracts wit hthe builder ten months ago, or did they try to and the builder put the transaction off? If the former the solicitors may have some explaining to do and compensation to pay. From the way you report matters it does sound as if they may not have done a very good job. They ought to have made sure that the contracts were exchanged, and kept your friend advised of what was going on, including their inability to get the builder to exchange, if that is what happened.
Exchange of contracts usually takes place over the telephone using a Law Society formula, and the friend's solicitors should never have been in any doubt as to whether or not they had achieved an exchange.

[MustafaTickl]

In view of the stars placed by luckystrike I add my view that the return of the deposit plus luckystrike's friend being barred from a purchase at the higher price indicate that the friend was up to some funny business. It must be serious for a developer and it's solicitor to take this extreme action. Not only is no compensation payable. as I have previously said, but there may be trouble ahead for luckystrike's friend.