Bankruptcy In Conveyancing

The scenario is straightforward if probably unusual. A solicitor acts for the purchaser of a house in the usual way. Contracts are exchanged. Between exchange and completion, unbeknown to the conveyancing solicitors (on either side because the vendor has failed to disclose or perhaps even he doesn't know) the vendor has been made bankrupt. In the absence of any knowledge that the vendor has been made bankrupt the transaction proceeds to completion and funds are transferred in the normal way.

In our case the transfer was completed by the sale of shares in a company owning the freehold to the property so there was no involvement of the Land Registry but it is far from guaranteed that a bankruptcy restriction would be added to the title before completion took place.