Conveyancing Negligence and Planning Permission

I had an enquiry the other day about a potential professional negligence claim against a conveyancing solicitor and it reminded me of a case I dealt with a year or so ago.

Mr Adeyemo* purchased a buy-to-let flat in Manchester. Well, it wasn’t actually in Manchester but we will say it was there for argument’s sake! Anyway, back to the story: he purchased a flat in Manchester. It was a flat in an old house that had been converted and he bought the downstairs flat with the benefit of a mortgage. He instructed solicitors to deal with the conveyancing and it all went through swimmingly.

The area where the flat was in was pretty popular and within days of purchasing the property, Mr Adeyemo had found some tenants. Their rent was sufficient to pay the mortgage and give him some additional income.

About a year or so later, his tenants handed him a letter that they had received addressed to him from the local council. It appeared the house had been converted into two flats without planning permission and the Council wanted it converted back to a single property, else Mr A would start facing some stiff penalties.

Mr Adeyemo ignored the correspondence for as long as he could but the Council started to get a bit insistent that the problem be remedied. They had written first to the occupier of the upstairs flat and then the mortgage companies who in turn, wrote to Mr Adeyemo. He could no longer ignore it.

I got his conveyancing solicitors file and went through it. Firstly, I noticed that the Estate Agents details advertised the property as being newly converted into flats. This should have set the solicitors’ alarm bells ringing, but they clearly missed it. They also missed that the Seller had confirmed in his documents that work had been carried out at the property to convert it into two flats. And they also missed the fact that the documents from the Council showed that no planning permission had been applied for on the property. In short, the solicitors had been negligent.

Unfortunately, the matter started to become very messy. There were two flats owned by two different owners both mortgaged with two different mortgage companies with two sets of negligent solicitors who each had their own insurers. And yes, the solicitor for the owner of the upstairs flat had also made the same mistake as Mr Adeyemo’s solicitors!

It took a long time to sort out this muddle. We had to get the insurance companies talking to each other first of all to see how they wanted to deal with it but clearly neither wanted to take responsibility. Then we had to get them to talk to the mortgage companies to see how they wanted to be recompensed before we could start talking about recompensing Mr Adeyamo.

Ultimately, I managed to settle the matter. Mr Adeyemo had to serve notice on his tenants to vacate the premises. Once they had, the insurance company bought the flat back from him and paid off his mortgage. I did try to argue for some compensation for Mr Adeyemo on the basis that the property had been an investment flat with a view to providing him with some additional income but they pointed out that Mr A could easily purchase a new investment property and reap his reward that way so that is what he agreed to.

All in all, it was an interesting negligence case although at times, whilst trying to get the insurance companies talking to the mortgage companies, it seemed like a Gordion knot. Fortunately, we managed to cut it.

*not my client’s real name, naturally.

Leave a Reply