Is it safe to complete on the basis of an undertaking? ask Malcolm Dowden & Elinor Clark
* * * * * *
A solicitor who has given an undertaking is obliged to comply with it. If that undertaking is to redeem and discharge a mortgage, the solicitor must secure that result, even if the sale proceeds are insufficient.
Risk of giving an undertaking
Angel Solicitors v Jenkins O'Dowd & Barth [2009] EWHC 46 (Ch), [2009] All ER (D) 133 (Jan) demonstrates the dangers that arise where a seller's solicitor gives an undertaking to redeem and discharge an “all moneys” charge without first obtaining a redemption statement, and securing the lender's agreement to release the property on payment of a specified sum.
The seller's solicitor had proceeded (without checking) on the pre-credit crunch assumption that the lender would be willing to accept 70% of the proceeds of sale of a property to discharge an all-moneys charge. In fact, after completion, the lender agreed to discharge the property only on payment of
.tmb-mov69x69.jpg?sfvrsn=7bf1005b_1)
