Wednesday, 23 November 2011

Waffling bankers - again!

Two significant points of interest arose in the course of a property purchase during the last few days - one topical and the other - well, incredible.

Client buying residential property with the assistance of a mortgage from High Street Bank represented in this particular transaction by associated firm because we don’t deal with residential property.

Father and his son are occupiers of the property, but not parties to any of the transactions.  Bank, very reasonably, requires signed forms of disclaimer of equitable interests.

There’s some confusion about whether or not the two occupiers are required to seek independent advice but rather than debate the point where time is pressing, the two head off to another law firm where they are told “we can’t help, because you are not our clients”.

An approach to another law firm, another established conveyancing practice, elicits a “we would like to help but we are sorry we can’t”.

They take a little more trouble to explain that they don’t get many requests for this type of exercise now and in view of the amount of time required to comply with regulatory and other requirements, have decided as a matter of policy not to do it.  It isn’t cost-effective or worthwhile from a risk perspective. 

I find that entirely understandable.  These are the sorts of reasons why we choose not to deal with any residential conveyancing.

These were two firms that have established practices in that field, choosing not to undertake the particular task for similar reasons.  This is for privately paying clients who, within reason, were not in a position to haggle - they just wanted the job done.

Trite point but this doesn’t augur well for the survival of poorly paid legal activities in various guises.

Not much to say about the bank in all that?  Well, don’t despair because the bank ultimately stole the show.  How?  Breathtakingly!

My associate did all the necessary and submitted the report on title to the bank and then made arrangements for completion with the seller’s London lawyers, subject to arrival of funds.

Whilst waiting for the mortgage monies to arrive, he then took a call from the purchasing client to report that she had the mortgage proceeds of more than £¼m in her personal bank account, courtesy of the lending bank.

The bank’s explanation?  That’s the procedure - the monies go to the customer who then passes them on to the solicitor.

The solicitor of course then completes the transaction, obtains the documents of title and is able to complete the bank’s security which protects its investment...

We only act for the good guys, of course, but in other circumstances that bank might have been lucky that the telephone call didn’t come from a luxury hotel or cruise ship in the Caribbean. 

It’s good to see that things have tightened up during the last three years.