A solicitor has agreed to leave the profession after acting on property deals where the developer went bust before the promised flats were fully built.

Peter Carey, formerly with Manchester firm Sedgwick Legal, acted for 21 clients in the purchase of 26 flats developed and sold by the same company. Almost £1m was paid through the firm’s client accounts.

The developer’s business model was to buy a disused property for conversion, and the individual properties were sold before or during the refurbishment work. Buyers would pay 50% of the purchase price on exchange and the rest on completion of the work.

The Solicitors Regulation Authority, in a decision notice published today, said Carey discussed none of the risks of this arrangement with buyer clients, many of who were based abroad and unfamiliar with the conveyancing process. They were not made aware of the risk of having full ownership of the flats before building works were finished, and were not told how unusual it was to pay half the monies pre-completion.

Solicitors Regulation Authority, SRA

Regulator says solicitor gave ‘inadequate advice’ to 21 clients lumbered with unrefurbished properties

Source: Alamy

In the event, the developer went into liquidation in 2016 and the buyers were left with flats they own but are unable to use or let, and virtually impossible to sell without paying for building works. None of the funds have been repaid.

Carey accepted he failed to give adequate advice to clients on the risks. The solicitor also admitted acting for the seller of a flat in another development when he already represented buyers of other flats in the block, thereby acting in a conflict of interests.

The SRA said a fine was appropriate given Carey’s direct control and responsibility for what happened but taking into account the ‘relatively small’ number of clients affected. ‘Issuing a fine to those solicitors who give inadequate advice shows the public that the SRA takes such matters seriously and expects solicitors to maintain appropriate standards,’ the regulator added.

Carey, admitted in 1986, was fined £2,000 but indicated he would apply to remove his name from the roll and never seek to be re-admitted. The SRA agreed to drop an allegation of a lack of integrity given Carey’s decision. He has not practised since 2018 and expressed insight and remorse for his actions, co-operating with the investigation throughout.