Thursday, 20 March 2014

What’s Cheap is Dear: Transfer of Equity Conveyancing

Working in risk management and compliance often brings me to meetings with underwriters and claims handlers and discussion of cases and upgrades to our checklists. Out of one of those recent meetings comes the following sorry tale,  told by an underwriter of an expensive claim resulting from a particularly inexpensive conveyancing fee:

Following the breakdown of her previous marriage, Mrs. K, and her new partner decided to buy an apartment.  She already owned a house jointly with her estranged spouse. Her proposed lender on the new apartment, as one might expect, required her release from her current mortgage with her soon-to-be ex-husband by way of Transfer of Equity.  Mrs. K asked her solicitors (who were also dealing with the new purchase) to advise on  the Transfer of Equity for which they charged less than £250 inc VAT.
What could go wrong?

Mrs. K’s solicitors didn't explain that not only did the Transfer of Equity secure her release from the mortgage, it also transferred sole ownership of the house to her husband.  Soon after the divorce Mrs. K became painfully aware that she had given up all her rights to the increase in value to the property they had purchased a few years previously.  She sued her lawyers for her loss of entitlement.  

In case you are wondering ….she won!

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