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Solicitor's had an audit
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The solicitors who did the conveyancing for our property purchase have written to us, 3 years later, asking for �1000 pounds - claiming they overpaid us at the time (we took extra loan and had �1000 cash back on the mortgage). What should we do- we don't have a spare �1000! Thanks.
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Regardless of how much time has passed, this �1,000.00 belongs to the solicitor (and his/her other clients) and not to you.
I suspect that you will have no choice but to pay this back to the solicitor, though I would first get in contact with the Law Society (lawsociety.org.uk) and see what they can suggest. For the past three years, this solicitor's account has not balanced and this is a breach of the solicitor's account rules.
Personally, I would not give in just yet, even if pressure is being put on you. These funds have not been noticed for the past three years so a few more weeks or months of waiting will surely not be an issue.
I suspect that you will have no choice but to pay this back to the solicitor, though I would first get in contact with the Law Society (lawsociety.org.uk) and see what they can suggest. For the past three years, this solicitor's account has not balanced and this is a breach of the solicitor's account rules.
Personally, I would not give in just yet, even if pressure is being put on you. These funds have not been noticed for the past three years so a few more weeks or months of waiting will surely not be an issue.
But you must know whether your mortgage sum was set up as a borrowing of X or (X+�1000)? Look at the documents they sent you.
If they set up the loan for X, then your repayments are based on this sum, and you (unfortunately) owe the solicitor �1000.
If they set up the loan for X+�1000, then the solicitor needs to get off his arris and collect his �1000 from the mortgage company.
If they set up the loan for X, then your repayments are based on this sum, and you (unfortunately) owe the solicitor �1000.
If they set up the loan for X+�1000, then the solicitor needs to get off his arris and collect his �1000 from the mortgage company.
What was the arrangement at the time about how the �1,000.00 cashback was to be dealt with? Was it by way of a lump sum, as is the usual, or some other arrangement such as anumber of deductions from your mortgage payments.
Was it to come to you direct for you to pay to the solicitors or to be paid direct from the lender to the solicitor.
If the former, then, did you get the cash back? If so, then was it paid to the solicitors and, if not why not. If not then I'd follow up with the lender to see what happened.
If the latter, check with the solicitors as to the arrangement they had with the lender. I would assume any cashback offer would have been detailed in the mortgage offer both you and they would have received.
A copy should still be on the conveyancing file (not the deeds) which would have to be kept in storage for at least 6 years. If you used a broker, they should also be able to help.
Make sure they have checked their banking records to confirm it never came in (eg an error in it being credited to the wrong account etc...) and check whether any attempts to chase the lender were made.
I'd ask them how the error was made so you understand, for example, was it an error in calculating the completion statement or different amounts of money being sent or received in error and not picked up on.
I do wonder why it has taken so long to be picked up on. It is likely to be a debit on their office account (ie their money as you can't overdraw a client account as that would be a breach of accounting rules like keeping uncessary funds in credit on office account) which has just been picked up in an audit of unarchived files.
It may be the money is still owed and needs to be paid by someone but, at the least, you deserve a full explaination as to why it is outstanding and from who.
Was it to come to you direct for you to pay to the solicitors or to be paid direct from the lender to the solicitor.
If the former, then, did you get the cash back? If so, then was it paid to the solicitors and, if not why not. If not then I'd follow up with the lender to see what happened.
If the latter, check with the solicitors as to the arrangement they had with the lender. I would assume any cashback offer would have been detailed in the mortgage offer both you and they would have received.
A copy should still be on the conveyancing file (not the deeds) which would have to be kept in storage for at least 6 years. If you used a broker, they should also be able to help.
Make sure they have checked their banking records to confirm it never came in (eg an error in it being credited to the wrong account etc...) and check whether any attempts to chase the lender were made.
I'd ask them how the error was made so you understand, for example, was it an error in calculating the completion statement or different amounts of money being sent or received in error and not picked up on.
I do wonder why it has taken so long to be picked up on. It is likely to be a debit on their office account (ie their money as you can't overdraw a client account as that would be a breach of accounting rules like keeping uncessary funds in credit on office account) which has just been picked up in an audit of unarchived files.
It may be the money is still owed and needs to be paid by someone but, at the least, you deserve a full explaination as to why it is outstanding and from who.
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