Not upheld: mortgage application handling, valuation error, legal fees dispute complaint against Shawbrook Bank Limited

Decision detail

Summary

Mr S complained about Shawbrook's handling of his commercial mortgage application for an HMO property, including delays, valuation errors, and a demand for £540 in legal fees despite being told fees would only be payable on completion. The application did not proceed as Shawbrook's valuation of £525,000 was significantly lower than Mr S's estimated £675,000. The ombudsman found that the £540 legal fees were payable under a binding undertaking given by Mr S's solicitors to Shawbrook's solicitors (PL) for the lease review, making this a matter between Mr S and his solicitors rather than Shawbrook. The ombudsman upheld Shawbrook's £150 compensation for the valuation error and communication failure as fair and reasonable, and did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman found that the £540 legal fees were payable under a binding solicitors' undertaking, which is separate and distinct from the email stating costs would be payable on completion. The undertaking given by Mr S's solicitors to PL creates a professional obligation enforceable by the Solicitors' Regulation Authority and the courts, and the fact that the mortgage did not proceed to completion does not release the solicitors from this obligation. The dispute over these fees is between Mr S and his solicitors, not between Mr S and Shawbrook. Regarding the valuations, Shawbrook is entitled to rely on expert valuers' opinions, and the £150 compensation for the valuation error and communication failure was fair and reasonable.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website