Buying a house - when are payments due discussion with sollicitor

WeB

Hi All,

We're buying a house, but cutting it close on costs. We have some more money locked away for a longer period and would have to pay a penalty to access it at this point. Hence we’re trying our hardest to avoid this.

In all conversations with the sollicitor we’ve always asked to split the bill up, but he’s now just sent us a single invoice for his legal work and costs, the purchase price of the property (minus mortgage and deposit) and the stamp duty. Payable ASAP.

I’m a bit confused by this as we still have 15 days before we’re due to complete. I can see why he would prefer all this money in his account rather than ours though!

We would now like to challenge him on this to spread the cost a little.

1. The remainder of the purchase price of the house, I’d like to pay around the 20th of April, so it’s definitely in his account by the 1st of May (our completion date).
2. His costs and advice, I’d like to pay by credit card. Although he has said there is a limit of 500 GBP on this. Which is OK – all little bits help. So I’ll pay part of it to him by CC and the other half after by bank transfer. Is it reasonable though to suggest doing this on April 27th (next paycheck), and the credit card payment on May 1st, so it rolls over in to the next month.
3. The stamp duty, as far as I can see from the gov.uk website is only due 30 days after completion. So I’d like to suggest to the sollicitor that we’ll postpone this until May - at which point I might even decide to pay by CC again (I’m aware there is a 1.25% surcharge). I’m assuming that it is my responsibility to pay this anyway and he's not liable, and that there should be no reason for the sollicitor to demand this money from me now. But again I’d prefer to double check first.

Thanks for all replies, ideas and suggestions!

kingstreet

If you require a mortgage, the CML Handbook tells solicitors they have to have cleared funds in hand in preparation for completion. This includes stamp duty and their fees, so the opportunity to pay stamp duty later exists only for those who pay cash.

You have to expect the solicitor to want the funds cleared a couple of days before completion to ensure there are no hold-ups which might delay completion and cost you thousands in penalties.

Finally, if the solicitor earns interest of more than £20 it has to be paid to you, so your insinuation there is an ulterior motive for wanting the money earlier is incorrect.

WeB

kingstreet wrote: »

If you require a mortgage, the CML Handbook tells solicitors they have to have cleared funds in hand in preparation for completion. This includes stamp duty and their fees, so the opportunity to pay stamp duty later exists only for those who pay cash.

Blast!

kingstreet wrote: »

You have to expect the solicitor to want the funds cleared a couple of days before completion to ensure there are no hold-ups which might delay completion and cost you thousands in penalties.

Could you give me an indication as to what you think is reasonable? I am about 2K short at the moment, which is due to come in on the 27th of April.

kingstreet wrote: »

Finally, if the solicitor earns interest of more than £20 it has to be paid to you, so your insinuation there is an ulterior motive for wanting the money earlier is incorrect.

Thanks for clearing that up. Those couple of days wouldn't earn him much interest. It was more of a general comment - I wouldn't mind having that money in my account either, even if it's just for a couple of days and I can't touch it

benjus

Since Faster Payments appeared people have got used to being able to shuffle up to £100k (with some banks) around instantly between different banks. So they may be tempted to send the money to the solicitor at the last minute. But FPs are not guaranteed to be instant - they might get delayed for security checks, or downgraded to a BACS payment in certain circumstances.

So I suspect your solicitor wants to avoid you waiting until the last minute to transfer the money.

Emmylou_2

benjus wrote: »

Since Faster Payments appeared people have got used to being able to shuffle up to £100k (with some banks) around instantly between different banks. So they may be tempted to send the money to the solicitor at the last minute. But FPs are not guaranteed to be instant - they might get delayed for security checks, or downgraded to a BACS payment in certain circumstances.

So I suspect your solicitor wants to avoid you waiting until the last minute to transfer the money.

I had a CHAPS payment (we were buying our house cash, with help from the Bank of Mum and Dad) delayed for fraud checks. The in-laws are overseas and the money came in OK from them, and then I wanted to send it on to the solicitors with a few days to spare for completion. I was very glad I did...I sent the payment on the Monday afternoon and was called on the Tuesday around lunchtime to answer some extra questions (where it had come from (account in the name of PIL, held by *bank* in *location*), where it was going (solicitors client account), why it was going (house purchase) as well as the usual "who am I" questions). It took 2 days to reach the solicitors because of this and so I'm glad I gave myself a few days' leeway.

Paying on 20th April shouldn't be an issue as it still gives plenty of time. You could speak to them and say "£X is coming in on 20 April and the remainder £Y is coming in on 27th". If there's a problem, they'll let you know!