Tuesday, 30 November 2010

Thousands face extra bills as court ruling hits property sales

The Herald reports that "A landmark ruling on repossessions is resulting in the suspension of property sales at the last minute and thousands of Scots facing large bills from banks on top of losing their homes. Almost a week after the decision by the UK Supreme Court effectively ground all Scottish repossession cases to a halt, there are concerns that hundreds of property deals could be halted as a result.

There are also warnings of the impact of the judgment on the cash-strapped courts service, with thousands of cases scrapped and having to come back into the system.  Last night, the Law Society of Scotland called on solicitors to put the brakes on all purchases of repossessed homes until it can be proven it is compliant with last week’s “earthquake” judgment.

Bruce Ritchie, director of professional practice at the Law Society of Scotland, said: “The society’s conveyancing and civil justice committee will be looking at this in detail but our preliminary view on current transactions that have not yet settled is that buyers’ solicitors should be firm about declining to settle the transaction until selling creditors can produce evidence of having followed correct procedure.”

Mike Dailly, of the Govan Law Centre, said he would pursue legal action against the lenders for putting the bill for dealing with the judgment on to his clients. He said: “The question that no-one has asked is ‘who’s going to pay for all this?’ I have no doubt UK banks will do what they always do and pass these costs onto consumers by adding them to their mortgage – which they can do if the costs are reasonable.  “We could be looking at up to £40 million or more. “It’s not reasonable to expect vulnerable Scots facing repossession to pay banks and their lawyers twice for what is essentially their solicitors’ responsibility and failure.” "

1 comment:

  1. Just to throw another issue into the mix. What about debtors who sold their homes to council and other social landlords whilst facing legal action by lenders, sometimes forfeiting equity.

    If the lender hadn't served a calling up notice and had proceeded on the basis of Standard Condition 9(1)b, could there be claims for compensation against the lenders.