Wrongly advised by solicitor

Hi
A few years ago i bought my ex partner out of the property we owned. My solicitor did not mention to me that any stamp duty was payable on the value of the half of the property that was signed over to me. He has recently rung to let me know that stamp duty should have been paid at that time. He is taking responsibility for the penalties and charges that will accrue. As far as I am concerned I paid him for professional services re. legal and tax matters associated with the transfer. I am wondering if there is any comback for me in so far as he wrongly advised me in the first instance and he should cough up the money. Could I have a "breach of contract" case against him? Any advice greatly appreciated, thank you.

If he has offered to pay interest and penalty costs, I don't see how you can expect him to pay what is after all your own SD liability on top of that.

Are (were) you a first time buyer?

Hi, thank you for your very quick responses. No, I did not have first time buyer status when we originally bought the house but we did get stamp duty relief as it was a new property. I know that the liability is mine and I would most definetely have paid it at the time if I had known but my query is in relation to the service I received from him. Surely if you pay someone a few grand they should be providing you with professional advice? I feel that he has not done this so do I have any comeback on this front? He says that he didn't think there was SD payable as the money that changed hands was less than the SD threshold of €127k. He didn't realise that SD was payable on the value being transferred not the payment. Thanks again.

Spartan1 said:

Surely if you pay someone a few grand they should be providing you with professional advice? I feel that he has not done this so do I have any comeback on this front?

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My understanding is that your only comeback is to expect that any additional costs arising to you as a result of his error will be covered by him. He has admitted this by offering to pay your interest & penalties. However I don't think you can expect the SD bill itself to disappear simply because he neglected to tell you about it at the time, unless perhaps the original transaction was motivated largely or solely to take advantage of an (ultimately non-existent) stamp duty exemption.

Maybe other posters with direct knowledge of this sort of issue might be able to comment more definitively?

Can I ask what was the value of the share being passed? And were there Gift tax implications for the ex partner if he/she was selling the property to you at an undervalue?

I'm wondering also what has triggered this situation? Ordinarily, the Deed would have been adjudicated which would have meant you needed a professional valuation. So it should have shown up then.

In any event, were a Court to adjudicate on liability here, my view is they would say - yes, very unfortunate but you are the one with the liability and if solicitor will take responsibility for penalties and charges then thats the end of it.

mf

Hi, we got a pofessional valuation on the property of €500k so he passed over a value of €250k to me. After the mortgage was taken off I gave him €90k. I'm very risk adverse so wouldn't have done anything to try and avoid any taxes etc and as far as I was concerned everything was done by the book. The reason the solicitor says it has just come up now is because I changed my mortgage to a different bank and they have requested the deeds. He has just realised that the deeds never came back from the previous bank's solicitors at the time of the transfer so he basically forgot to close off the transaction until now. I then get a call today saying I owe ten grand.

I just feel really let down because I have used this solicitor lots of times and trusted him. As far as I am concerned he's been negligent and did not provide a professional service. I will pay the €10k but want to go after him for shoddy workmanship basically.

Hi Spartan1,

I can understand why you might be annoyed, but consider this:

1. When you say you want to 'go after' a service provider for shoddy service, you are in reality talking about suing for compensation.

2. In this case the service provider (your solicitor) has admitted the error and has undertaken to compensate you, by paying for your losses.

3. The stamp duty liability is not a 'loss'. It was your liability. It is annoying not to have known about it beforehand, but that annoyance does not actually constitutute a financial loss. The only conceivable way you could argue that it is a loss is if you were to say 'well, had we known there would be stamp duty, we would not have gone ahead with the transaction'. I am sure you can see that such an argument would lack all credibility. If you had not gone ahead with the transaction, you would be far worse off today.

Your solicitor was negligent; he admitted it and undertook to make it right. Mistakes happen; it is very annoying, and you are right to be annoyed. But I think your solicitor has acted very properly. Provided this was a genuine once-off error and not an indication of systemic problems, if you stick with him, I think you will probably get very diligent service from the solicitor in the future, (certainly any time I have a screw up on a file, i make double double sure not to have another one for the same client) so don't make any hasty decisions.

Thank you all very much for your comments, I really appreciate all the feedback. Yes, I'm more annoyed at him than anything else. When you're 7 months pregnant the last thing you want is a ten grand tax debt rearing its head. Thanks again, this site is excellent.