Solicitors fees

AceCobra

Hello,

My Fiancée and I are due to take possession of our first home this coming Friday. I received a letter from my solicitor last week asking for my deposit, details of insurance and their fees (including searches) 2 days before we are due to complete. Having sought advice from my father he suggested we provide payment for the deposit and enclose the required docs but attach a covering letter stating we would settle their fees, if appropriate on completion. Today our solicitor contacted me saying we must pay their fees in full, in advance of completion or the process will not go ahead. They say they will be liable for all the fees once completed and they are not willing to take that risk. Is this normal? Every person I’ve talked to thinks this is very strange, do I have any recourse if something goes wrong if the solicitor has already been paid? I somehow feel they will be more willing to help if they are still waiting for their fees should anything go wrong completion. Maybe I’m just worried as it’s my first home, any advice welcome.

Martin.

NB On a side note we are paying £1050 in total - 525+vat are their converyancy, the rest are searches. Is this a decent price for buying only?

distilled

This is quite normal. All fees have to be paid prior to completion. Enjoy your new home

AndrewSmith

Perfectly normal for them to want payment at exchange of contracts prior to completion.

Hope the move goes well.

RiskAdverse100

A distinction has to be made between the solicitors' costs and any expenses such as search fees, Land Registry fees and Stamp Duty Land Tax.

A solicitor can refuse to complete a purchase if expenses which are necessary to enable completion to take place remain outstanding.

Although the Land Registry fee and any Stamp Duty Land Tax are not in fact paid until after completion, if a mortgage is involved then the solicitors' mortgage instruction will require him to hold monies to cover these funds.

However, unless the solicitors made it very clear right at the beginning that they would require their costs to be paid for acting before the purchase is completed, they cannot insist that these costs are paid before completion.

To do so would be a breach of what is known as Principle 25.17 of the Practice Rules that all solicitors must comply with.

What has been suggested about paying the solicitors their costs on completion is perfectly reasonable.

RiskAdverse100

AceCobra

Many thanks guys

Martin

mary

I've just paid some £3.5 K for remortgaging and buying a second property to my solicitor before completion on 30th December. The solicitor's own bill is bad enough, but it's all the add on Stamp Duty, Land Searches, VAT, VAT etc. that knock it up even further

Me_Myself_2

MY OH's a solicitor and he always insists on payment before completion takes place.

He's often been out of pocket from the start (i.e.paying the Search Fees or Land Reg for documents) so it seems fair to me. Also if he doesn't ask for the money before completion it's surprising how slow people will be paying.

In addition although Stamp Duty and Land Reg will not be payable until after completion, he's legally obliged to pay them by a certain date, so he doesn't want to be left with no money to do this.

Don't forget that he's also been working on the matter for some weeks without being paid, so again it seems reasonable to me.

xx

shimmasok

If you really worried ask you Solicitor for an undertaking that if you fail to complete for any reason that they will refund you any appropriate fees

shimmasok

p.s. any chance of a training contact RiskAdverse100

Ian_W

RiskAdvers's answer is very interesting but in practice I've bought and sold quite a few times and always been required to pay sol's fees and disbursements in advance of completion. In fact, I've got a current initial letter from a solicitor with a quote for purchasing a property which encloses terms and conditions for that firm, one of which is [papraphrased rather than in full]:
When acting in the purchase and/or sale of property a bill for our fees and disbursements will be sent to you before completion and we require this to be paid in full at least 2 days before completion takes place.

So what your sol is asking for is the norm in my experience.

An internal complaints proceedure will also have been notified in the initial letter inc either a named partner or a local Law Society official as the point of complaint. There is a further avenue via the Law Socity's national complaints scheme at Leamington, the name's changed a few times and I can't remember what it currently is.

RiskAdverse100

As I hope was apparent from my original reply, if the solicitor has made it clear when taking you on as a client that he will want his fees and all other expenses to be paid before completion of a transaction then this is absolutely fine.

Solicitors are required to supply a client (and particularly a brand new client) with certain information about how they operate, who will be doing the work, the costs they will charge and the complaints procedure that they operate. This information can be set out in the initial letter although it often takes the form of a separate document - their 'Standard Terms of Business' or something similar.

However, whether or not this should be regarded as reasonable, if the solicitor has not made it clear to the client at the very beginning that he will want his costs paid before completion, he cannot then insist later on that this happens and threaten to refuse to complete the transaction if the client does not cooperate.

In, I hope, most cases, there is never a problem and clients are happy with the service that their solicitor provides and are happy to pay them their costs regardless of when the solicitor wants to receive payment!

RiskAdverse100