Repairing the damage


House improvements: what if buyer does not give OK to discharge undertaking?

Q.  I acted for a client in selling his property last year. It was agreed that I would retain £5,000 out of the proceeds of sale until the buyer confirmed that various works, which my client agreed to do, had been completed to his satisfaction. On my client’s instructions, I gave an undertaking to this effect.

The outstanding works were completed some months ago, but the buyer’s solicitors have been unable to obtain instructions from their client, despite several attempts. In the meantime, we are being pressed by our client for the monies. Can we write to the other side, telling them that if we do not hear to the contrary within two weeks, we will deem the undertaking to be discharged?

A. Once you have given an undertaking and the recipient has placed reliance on it, you cannot unilaterally withdraw from it; only the courts or the recipient have the power to discharge you.

Generally speaking, if you give an undertaking, you will be expected to comply with it as a matter of conduct.  However, in circumstances such as these, where you are reliant on the recipient taking some action, you can ask the Solicitors Regulation Authority (SRA) to give notice to the buyers’ solicitors that unless the buyer indicates that the repair work is defective and gives details within a specified period, the SRA will not thereafter consider a complaint in respect of that undertaking (see rule 10, guidance note 30 of the Solicitors’ Code of Conduct 2007).

It will be a matter for the SRA to consider, in the light of all the circumstances, whether to issue such a notice.  However, bear in mind that the court has jurisdiction in respect of undertakings (see guidance note 31).




Leave a Comment

By clicking Submit you consent to Legal Futures storing your personal data and confirm you have read our Privacy Policy and section 5 of our Terms & Conditions which deals with user-generated content. All comments will be moderated before posting.

Required fields are marked *
Email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Reports

Our latest special report, produced in association with Temple Legal Protection, looks at the role of after-the-event (ATE) insurance in commercial litigation post-LASPO. We are at a time when insurers, solicitors, clients and litigation funders work ever more closely to create funding packages that work for all of them, with conditional fee and even damages-based agreements now part of many law firms’ armoury.

Blog

13 November 2019

The October PII renewal: Why the market changed

Since the abolition of the Solicitors Indemnity Fund, the October professional indemnity insurance renewal season has always been a challenge, but this year most law firms saw their premiums go up.

Read More

Loading animation