I am still receiving requests from new homebuyers for advice on using the builder's choice of solicitors.
Just this week I had these two enquiries:
"We have been offered a deal with a new build housebuilder but they have said it's condition we use their recommended solicitor and mortgage company. If we don't use these then there is no deal unless we buy the house at full asking price with nothing extra ie stamp duty paid.
Does anyone have any experience good or bad about using the builder's recommended solicitor?what would you advise?"
"We have been offered a deal with a new build housebuilder but they have said it's condition we use their recommended solicitor and mortgage company. If we don't use these then there is no deal unless we buy the house at full asking price with nothing extra such as stamp duty paid.
Do you have any experience good or bad about using the builder's recommended solicitor?
What would you advise?"
I am so angry that this is still happening!
The house builder is in fact bribing buyers to use their pet firm of solicitors so they can control the whole process (especially legal completion) and more importantly, what buyers are told and not told. There will be clauses in the contract that are not in the buyer’s interests and should be objected to or negotiated by a buyers wholly-independent solicitor.
The Law Society acknowledges
"there are dangers of a conflict of interest where the same solicitor is acting for both sides in a transaction." However it also says,
"Whether there is a problem will depend upon the facts of each case."
It is a breach of requirement 2.5 of the Consumer Code for Home Builders and against the law - The Consumer Protection from Unfair Trading Regulations 2008 - to require buyers to use a
specific builder-stipulated firm of solicitors. Despite this some still do, but most circumvent this by either bribing buyers or requiring you to choose one from a list of firms.
Whilst all solicitors are legally obliged to act in their clients best interests at all times, I cannot stress enough how much buyers disadvantage themselves by using a builder nominated solicitor.
I know of recent cases where buyers bought a new house and found out at a very late stage, that it was actually being sold leasehold. Others have been misled or not informed about the extent of management charges and escalating ground rents. In addition things like buyers not being advised that the road was not adopted by the council, or was that a Section 38 agreement is in place to ensure adoption took place.
If, as is quite likely with new homes, buyers need to take legal action against the house builder, they will discover that the builder-nominated solicitor will not act for them on this , saying there is a conflict of interests.
Many first time buyers will no doubt you are taking advantage of Help to Buy.
Most lenders also require you to use their choice of solicitor and many of these firms will be used by the house builders.
My advice would be to get the name of the house builder’s solicitor(s) and then make sure you don’t use any of them!
There is always a reason if
"it seems too good to be true" It usually is!
