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Diary of an innocent in-houser

17 March 14

The tale of a non-lawyer colleague who fancies himself as a property dealer

“James! I need your urgent help”, said Danny, barging into the legal department. He runs one of the divisions at the more “metal bashing” end of the group’s engineering business. “I’ve just done the company a really good deal. I’ve sold the Leith site for £500,000! Incredible price for a piece of useless land, but we need the documents sewn up as soon as possible, not your usual months of legal mumbo-jumbo. Can you kick that off?”

“I didn’t realise you were qualified in transferring title of heritable property in Scotland, Danny”, I responded, aware that any irony was completely lost. “Precisely what have you agreed and with whom?”

“Oh, just a quick exchange of emails with QQQ Properties”, Danny replied. “I’ll call later to see what needs to be done to sew this up by the end of the week, eh? Ronnie’s going to be delighted!”

I asked him to send me his “quick exchange” as soon as possible, QQQ being notoriously astute property dealers, and asked Alan, our property lawyer, to dig out the titles, suggesting he and I meet later that day. Something told me this would be trouble.

I was right. Danny’s email exchange started with a breezy suggestion from him to QQQ that the site was theirs for £550,000, followed by a trail of emails and signed letters in which QQQ had got the price down to £500,000 and neatly drawn us into completed formal missives, spelling out the site, the date of entry, a proper description, “free of all encumbrances”, references to penalties and goodness knows what. Danny had got us well and truly bound in, and I had no idea of the property, its value, whether it was part of the group security or anything else.

Alan phoned. “Are you sitting down?” he mumbled. “Yes”, I sighed. He said: “Well, guess what, we don’t own the site, we lease it at £45,000 a year, eight years to go, and it was recently valued at about £750,000 as it’s part of major new development. So, I hope we can walk away from this.”

“Well, I doubt we can. Danny’s walked right into it. Ronnie will have a fit”, I said, explaining the correspondence to Alan. “We may find ourselves trying to buy the damn property and then selling at a loss.”

In vain, I tried to get Danny by phone, email and text, leaving urgent messages. Later the following day, I had still had no contact and was on my way to tell Ronnie, the CEO, that we might have a property problem, when Danny called on his mobile. It was a bad line and I could hardly get myself heard over his excitable shouts: “James!” he yelled, “You’ve got to sue QQQ! They’ve reneged on me, they’ve pulled out! They say they can’t go ahead, despite all the correspondence, wrong property or no money, all a big mistake! I can’t believe it” – me still trying to interrupt in vain – “so, James, you’ve got to sue to make them go ahead! It’s £500,000! You’ve got to send a writ or whatever, like now!”

I tried to explain the deal was a potential disaster for us but the line was too bad and Danny kept interrupting, finally shouting over me: “So, what will you say to them, James?”

I sighed: “I think, Danny, I’ll send them a bottle of vintage champagne and a note of grateful thanks.” 

 

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