geoffxr4

I'm currently in the process of buying a property. However i'm slightly concerned about the saftey of any money held in the solicitors client account and what would happen if a bank failed. The transaction is a cash purchase and so the amount of cash i'll be tranferring is significantly greater than the £50,000 i'm covered for in the event of a bank failing.

The documentation from the solicitors states that they give consideration to which banks they use etc but i'm still concerned. To my mind the uk banks that have been nationalised/part nationalised are now relatively safe etc and at any rate safer than some foreign banks i.e icelandic banks.

What are peoples thoughts as to which banks can now be considered safest and are there any other things i can do to protect myself?

It is my understanding that this will not be covered under a solicitors indemnity insurance unless they can be shown to be liable. It hasn't been tested in court yet but i would imagine that any solicitor that picked an independent foreign bank over a nationalised uk bank could be shown to have acted negligently in the current market.

Thoughts please...

RS 500,

iTrader: (1)

go with a bank that the tax payer owns,[as your money is safe] or you could go a off shore account or a German bank is a good bet as they are know for saving money as a nation.

finally a good accountant would recomend such accounts. and may earn you slight percent on your money.

XRdodgybird

From the looks of some bank's figures from the past few weeks on the news, things are on the up not down.

To be honest, I work for solicitors, and it aint the banks you have to worry about..... its dodgy firms.

I wouldn't like to go into how many dodgy legal firms have been brought into fraud rings.....

geoffxr4

if 100% of deposits in northern rock are guaranteed since it's nationalisation then surely if my solicitor puts the money elsewhere in a more risky bank and and their bank fails they could be considered liable as they didn't take the safest option with my money...?

RS 500,

iTrader: (1)

you can ask them want bank, surely they could tell you, also get a company history/credit check on them. any less than A1 history i would fuck em off. plus if they are limited company which they prob are they could file for bankruptcy, and your money would be gone, and they could start back up next day easy as 1 2 3.

northerner

Is the money being transferred via CHAPS?

focusv8

There are guidelines here for solicitors;
http://www.lawsociety.org.uk/product...s/1841.article


It seems they can divide the cash between different bank accounts.
You need to tell them the name of any bank you already have cash in as if they put any on deposit in YOUR current bank as well, the total protection is still only £50k including
your own cash.

.

geoffxr4

probably bankers draft so could give them 4 for £50,000 each to split the money between banks maybe

Lambchop

iTrader: (1)

Do you wear 2 johnnies when/if you get a ride?

Surely a solicitor knows how to handle the money safely?

geoffxr4

No, they have a clause that states they are not liable for any losses due to banking failure and the law society issues this practice note as they consider FSA regulated banks to be safe from a liability point of view. Of course, that may not necessarily be the case at the moment in the current climate.

I agree that the chances of a major UK bank being allowed to go under by the government is slim. But the solicitors may choose to bank with a smaller non high st bank to get better interest rates.

Ordinarily you would be covered for the standard £50,000 per banking group. However, the solicitors may put all the money into one group and then i could potentially end up losing £150,000

Lambchop

iTrader: (1)

So you're buying the property cash yes? WHy does it need to go to a solicitor then? Surely it can be a bankers draft direct to whoever owns the property? Or am i missing something?

Rick Astley

Could you not make a number of individual payments under a 50k cap? Or would that not work?