Help! Conveyancer/lawyer delaying settlement

[Pmac]

My conveyance/lawyer has advised me that my settlement been delayed as the banks have refused to allow her to act on my behalf for the refinance loan and therefore she can't proceed with the settlement which apparently might take another 4 days. It has come to my attention that there are important documents from the banks that she hasn't signed and she has not made attempts to arrange for settlement up until the day before settlement date is up.
I am in NSW, any advise as to what I should do and who I should refer this matter of potential negligence to?
Thanks!

 

[Terry_w]

Wait 4 days?

What documents does a solicitor need to sign?

 

[Pmac]

Thanks Terry. Following the purchase of my new home, the banks approve 2 home loans (one for the new home and another to refinance my current property which will become an investment). She claims that she was unaware of the refinancing and the banks would not release the loan for the new home they have cleared the refinancing loan which they have excluded her from.
How is it that a conveyancer/lawyer have a lack of awareness of what needs to be done to ensure the settlement goes through on the due date??

 

[Terry_w]

I don't really understand what that means.

Conveyancers/solicitors don't get involved in refinances. Do you enter into a contract with this person do assist? Generally conveyancing relates to the transferring of title.

Have you cross collateralised the loans or do you need to get the deposit from the refinance?

 

[Pmac]

I think that the loans are cross collaterised. I do not need the refinance for deposit. Thanks

 

[Terry_w]

unless that was part of your agreement, to assist with the refinance, with the conveyancer I can't see how you could blame them or claim negligence.

This is why you should never cross collateralise loans. Hope the new one is stand alone.

 

[Pmac]

Just found out that my conveyancer/lawyer did not date the contract that she sent to the bank, as a result the bank was not able to fully proceed with settlement.
I would have thought that the delay in resubmitting the contract until the day of settlement would not be acting in the 'best interest of the client' as this is costing me over $300/day...and still not sorted.

 

[Terry_w]

What does the lawyer say.

It would be usual for a bank to ask for this on settlement day. They would normally ask the borrower or their broker as well as the lawyer for this, well in advance.

Is it really costing you $300 per day? Must be a property worth $912,500.
Don't forget to take the interest into account - the loan that hasn't been drawn yet.

 

[Pmac]

Yes, it looks like the bank requested the contract from my lawyer 5 days prior to settlement but it was not sent! I haven't confronted her about this yet but would like to negotiate cost sharing of the penalties, would this be fair? Also I had assume the 300/day was for the interest of the seller, is that another 300/day for my loan that hasn't settled as well? OMG!

 

[Terry_w]

Yes, it looks like the bank requested the contract from my lawyer 5 days prior to settlement but it was not sent! I haven't confronted her about this yet but would like to negotiate cost sharing of the penalties, would this be fair? Also I had assume the 300/day was for the interest of the seller, is that another 300/day for my loan that hasn't settled as well? OMG!

no, you don't pay interest on a loan you haven't drawn. So you are saving money there.

 

[Perp]

I had assume the 300/day was for the interest of the seller, is that another 300/day for my loan that hasn't settled as well? OMG!

You will have to pay interest to the seller, but you will be saving on mortgage interest, so it's approximately revenue-neutral for settlement to be delayed.

 

[Scott No Mates]

Not quite Perp, the penalty interest rate is usually 4-5% higher than the mortgage rate.

 

[Perp]

Not quite Perp, the penalty interest rate is usually 4-5% higher than the mortgage rate.

True, hence "approximately". My point was simply that Pmac should also factor in the mortgage interest saved.

I probably was more abrupt than I otherwise would be, because Pmac doesn't sound like they even know what's going on - not sure if it's cross-collateralised, not sure if solicitor appointed to act for refinance - yet is scathing of the solicitor and demanding accountability and compensation.

How on Earth can the solicitor know what's going on if the client doesn't even seem to know?

 

[Scott No Mates]

Very true Perp.

A clever person knows that only half of the story is factual, the truly wise person knows which half.

 

[Peter_Tersteeg]

This problem sounds like it's a result of bad structuring from whoever set up the loan; either the bank or a broker.

The lending process isn't the responsibility of a solicitor or conveyancer, they need to ensure the transfer is taken care of. The banks usually ask them for a copy of the contract and they do have to send transfer of land documentation, but even when this is delayed we've managed to get the bank to make up for it.

Banks usually want everything ready 5 days prior to settlement. Most have emergency processes available where they can get it together within 1-2 days. We've had occasions where they got everything lined up in the morning and settled in the afternoon.

 

[Pmac]

Thanks for all your comments. I have now realised that I should have paid more attention to the details instead of just trusting my mortgage broker and convenyancer/lawyer to get everything done - lesson learned!