Solicitor "lender fee"

Foolonthehill

Hi, first time poster here. I'm part way through purchasing my first property. I've followed much of the advice available here and in Martin's first time buyers guide and am hoping to get some good advice from you guys on the forum.

My solicitor wrote to me asking for an extra £300+VAT for "acting on behalf of the lender." I emailed asking what this involved and pointing out that in our initial email conversations when I asked if there would be any extra or hidden fees she confirmed there would not be.

The response to my email; "The lender fee is due to the lender used, however I am happy to reduce this to £180.00 including vat." The lender is NatWest, hardly a small outfit presumably?? Is this normal practice, should I pay it?

I'm not exactly thrilled with the solicitor for various reasons including badly worded correspondence, standard letters that don't apply to the situation and not answering my questions. Perhaps this is all standard solicitor stuff?

Thanks

phill99

Well I guess if you choose not to pay it, then your soliitor will nit he able to u dertakewhat is required to exchange /complete and in essence will not ge able to act for you.

davidmcn

I would ask for further clarification of what's unusually onerous about NatWest's requirements which would require an additional charge (I'm not aware of any).

Some lenders are more fiddly to deal with than others, but I've never felt the need to vary a fixed purchase fee accordingly.

G_M

Ah! You are buying with a mortage.

Your mortgage lender will need to appoint a solicitor to act for them in ensuring the property is a safe security (legally) for the loan (just like they will also get a surveyor to do a Valuation), as well as to ensure a Charge is registered at the Land Registry.

It is common practice for them to instruct the same solicitor that you use yourself for your conveyancing, but unless your mortgage product incudes 'free legals (and sometimes Valuation)', you will be charged for this.

When instructing your solicitor, it seems you did not check whether their quote was just for your conveyancing, or also included the lender's legal costs.

davidmcn

G_M wrote: »

When instructing your solicitor, it seems you did not check whether their quote was just for your conveyancing, or also included the lender's legal costs.

I would have thought the previous questions about any extra fees might have teased that out (and anyway, a solicitor quoting for a purchase ought to assume by default that there's a mortgage involved, particularly if they're dealing with a first time buyer). The "free legals" mortgage products are to do with remortgages, rather than lenders generously subsidising your purchase conveyancing.

The response that the fee "is due to the lender used" rather than merely "because there's a lender" suggests they think there's something peculiar about NatWest.

Richard_Webster

Lenders include a fee for the conveyancing work for them in their formal mortgage offer - OP should find it somewhere in there. I think they put this in as it is an upfront fee that has to be included to calcualte the APR.

Most lemders put in a fee, depending on the amount being borrowed, somewhere between £100 and £200. Many solicitors do not charge any extra fee but having ascertained the person is getting a mortgage would perhaps charge a little more on their basic fee than if no mortgage. Others add on their own, (generally fixed) amount.

A few solicitors say in their terms and conditions that they charge the amount set out in the mortgage offer - and unfortunately I think the RBS/Nat West group put substantially highrer figures than others in at this point.

If OP emailed and specifically asked about extra fees then I think she has good grounds to complain. The vast majority of buyers do have mortgages, so this should have been pointed out at that stage. OP should complain and threaten the firm with the Legal Ombudsman - this sort of dishonest approach needs stopping. Alternatively find another firm and use them.

davidmcn

Richard_Webster wrote: »

Lenders include a fee for the conveyancing work for them in their formal mortgage offer - OP should find it somewhere in there. I think they put this in as it is an upfront fee that has to be included to calcualte the APR.

Most lemders put in a fee, depending on the amount being borrowed, somewhere between £100 and £200.

A few solicitors say in their terms and conditions that they charge the amount set out in the mortgage offer - and unfortunately I think the RBS/Nat West group put substantially highrer figures than others in at this point.

Hmm, I have always regarded those fees as a notional figure which the lender has come up with purely for the APR calculation, not some sort of indication to the solicitor of what they ought to be charging. Some are possibly more realistic than others, but as I said I don't see what's unusual about NatWest's requirements which would actually justify a higher fee.

kingstreet

davidmcn wrote: »

Hmm, I have always regarded those fees as a notional figure which the lender has come up with purely for the APR calculation, not some sort of indication to the solicitor of what they ought to be charging. Some are possibly more realistic than others, but as I said I don't see what's unusual about NatWest's requirements which would actually justify a higher fee.

Me too.

None of the solicitors I know try to stick the purchaser with extra cost for representing the lender as well as them.

It's all part of the headline fee, as is completion of SDLT return.

WombleBat

I got my mortgage through Natwest last week and my solicitors didn't charge me anything for working with the lender at least in terms of an individual line item. That said they knew from the outset that I was getting a mortgage so probably included the costs in the initial quotation.

According to them the only involvement they would need to have is to ensure the lending terms are adhered to i.e. ensuring insurance is in place and contracts are valid and then liaising to have funds released.

agrinnall

Of course, what we don't know is how much the fixed fee was, if it's low then perhaps there's justification for the solicitor to ask for more to represent the mortgage provider.

Foolonthehill

Hi everyone thanks for the responses.

The original quote was £1111 including searches, land registry etc. This seemed to be in the mid range of local solicitors. My main dispute is that I (following MSE advice) specifically asked if that would be the final cost and the solicitor said yes.

There's a few things that have happened which being a first time buyer I'm not sure how strange/annoying they are. For example the vendor listed several fixtures and bits of furniture (a bed, desk, curtains, cooker, tumble dryer) as remaining in the inventory but on a recent viewing almost all have been removed. I've asked my solicitor to ask why this is, which she said she would. Despite asking for updates twice now she has not let me know if the vendor has responded to the question.

The flat was advertised as having an extended lease, an important selling feature for me and my partner. Our offer was accepted on the 7th of June and it transpired that the vendor was "in the process of extending the lease." On the 29th of July, after being chased, my solicitor said "it could take a further 2 weeks apparently as the solicitors have asked for amendments."

As of this Monday we have received details about management company fees and ground rent, a health and safety report, boiler certificates etc. Basically everything is in place except for this lease extension, when asked my solicitor said it could be another 3-4 weeks! We were expecting this to be quite a quick sale as we know the vendor has no chain. Is this normal for a lease extension?

Thanks again for your responses