Going to miss settlement date, but who is to blame?

[neil100]

Hi all,

I'm due to settle on an IP (NSW) Next week.
However, the bank are (rightly in my opinion) questioning the differences found between the contract and title registration. This is going to delay settlement and cost me in penalty payments every day I don't settle.

The basic sequence of events is something like this

September 2009
Exchange took place, contract is signed between vendor A an myself.

February 2010
Receive notification that vendor A sell their interest to NewVendorB
A transfer of direction is created with Transferor NewVendorB and Transferee being myself

I never signed the Transfer of Direction or a new contract with newVendorB

September 2010
Title registration occurs and I now need to settle within 14 days.
Bank raises an issue with regards to the contract and title registration / search. In essence I think what they are saying is that I signed a Contract to buy a property based on the fact that the Vendor was Vendor A. The bank believe that either the Contract should have been between myself and NewVendorB or I should have consented to the sale Vendor A to NewVendorB

Last night I received an email from the conveyancer suggesting I take independent legal advice as I think this is now beyond the conveyancers knowledge or capability. This morning I have engaged a solicitor to look at the issue.

Does anyone, preferably with legal knowledge, have any views as to my position on this? Do I have any remit for compensation?

Where was the mistake in this process?

Cheers all.

 

[Terryw]

I don't really no about the legal side of things, but your penalty will probably only be small and, since you will only be drawing the loan down at settlement that is a week where you won't have to pay loan interest.

 

[neil100]

I don't really no about the legal side of things, but your penalty will probably only be small and, since you will only be drawing the loan down at settlement that is a week where you won't have to pay loan interest.

Yes, you are right about the penalty and interest, but I have had to engage a solicitor which will add to the cost base, and I just feel a bit aggrieved at how I have found myself in this position.

What I have learned though, is that it is probably better to use a solicitor from the outset in case these sorts of issues arise.

 

[Terryw]

Yes, i was going to say that. A conveyancer maybe good for conveying - arranging the changing of titles but you really would be better to use a solicitor as often other legal issues pop up.

I am not sure of the 'mistake' made if any. I haven't come across vendors changing before settlement before, but I can't see this as being the banks fault in anyway. 14 days is a tight deadline and they have to look into the change in vendor issue. I suppose you should have sought legal advice before you were approached about the vendor changing and given the bank more notice. Also it would have been good to get a longer notice of settlement period - 28 days instead of 14. But don't worry too much.

 

[neil100]

I suppose you should have sought legal advice before you were approached about the vendor changing and given the bank more notice.

Or I should have been advised to seek legal advice by the conveyancer?

Also it would have been good to get a longer notice of settlement period - 28 days instead of 14. But don't worry too much.

Agreed, again, maybe a solicitor would have picked this up and suggested it?

I feel happier now it is in the hands of a solicitor, and get the feeling that the conveyancer is "happy" to let this one go too!

 

[Terryw]

Or I should have been advised to seek legal advice by the conveyancer?



Agreed, again, maybe a solicitor would have picked this up and suggested it?

I feel happier now it is in the hands of a solicitor, and get the feeling that the conveyancer is "happy" to let this one go too!

So you consulted with the conveyancer when you were notified about the vendor transferring? I would have thought they should have advised you it was beyond their ability to advise on this and told you to go elsewhere.

Yes, you may have been advised to extend the 14 days to 21 or 28, but this would really depend on the person advising - you get some good conveyancers that would have picked this up too.

What has the solicitor said about this?

And do you know the reason why the change in vendor - maybe death or insolvency?

 

[neil100]

So you consulted with the conveyancer when you were notified about the vendor transferring?

No, unfortunately I was very ignorant about the meaning of such a thing. I knew there was internal fighting with the vendors, and that there would effectively be a buy out, so when it happened, I just assumed it was "par for the course".

I would have thought they should have advised you it was beyond their ability to advise on this and told you to go elsewhere.

Yes, they have now, but too late IMO

Yes, you may have been advised to extend the 14 days to 21 or 28, but this would really depend on the person advising - you get some good conveyancers that would have picked this up too.

Again, ignorance on my part. I now realise the gulf that exists between solicitors / lawyers and the typical conveyancer. A good lesson to take forward with me though!

What has the solicitor said about this?

And do you know the reason why the change in vendor - maybe death or insolvency?

I am hoping to hear back from them today, once they have had chance to go through the file. I will update the thread once I know.

The original vendor was made up of 5 or 6 people, and I understand there was some in-fighting, so they sold their interests and went their separate ways.

Cheers