Ignoring Legal Advice Proves Costly
When a woman ignored legal advice and lent more than £600,000 to her uncle without taking proper steps to protect herself, the outcome was always likely to be regrettable.
While the transaction seemed straightforward – the advancing of a mortgage on his property through a company she had set up, to replace his existing mortgage – the outcome was not as predicted. The reason for that was that the property was subject to a Crown Court restraint order, issued under the Proceeds of Crime Act 2002. The order prevented the registration of the charge without the consent of the Director of the Serious Fraud Office or a further court order.
The mortgage could not therefore be registered, with the result that the company's loan was unsecured.
The company accused the solicitor involved of negligence, but there was copious evidence that the woman had ignored specific advice not to go ahead with the transaction.
Incredibly, she had also failed to have a valuation done on the property against which the loan was made.