Solicitors fees when sale and purchase has fall through

Padilla

I am trying to find out whether it is the norm for solicitors to inform you of no completion insurance so in the event of this you don't have to pay any legal fees? I wasn't informed of this insurance.

Also, without a no completion/no fee contract - the costs on a abortive sale or purchase would be, according to the contract "such lesser sum as is reasonable having regard to the amount of work done by that stage of the transaction" - would this be their hourly rate or pro rated against the fixed fee? (The contract did not stipulate this).

Our buyer pulled out just before we were about to discuss exchange and as a result the vendors of the house we wanted to purchase pulled out. I have been sent solicitors fees relating to the purchase which is only £100 lower than the fixed fee they quoted and the conveyancing had hardly even started (2 weeks after our offer was accepted the vendor pulled out) and they have based this on their hourly rate. Then as a goodwill gesture they reduced this fee as apparently this would have been considerably more than the fixed fee but it still doesn't seem proportionate to me. So if we had completed we would have paid a set figure but now that we haven't we have to in effect pay a lot more for the work ie fixed fee work is a lot lower than the hourly rate for non completion. And I know not a lot of work had been completed as the vendor of our purchase pulled out 2 weeks after our offer was accepted. To clarify the position, we needed the equity of the sale to purchase, however, the completion date was not tied with the purchase completion date as we were going go move in with parents in the interim period as it took us a while to find a house to purchase.

Any advise or details on your experience greatly appreciated

agrinnall

I've been buying and selling for the last 20 years and I've never heard of no completion insurance. I'd imagine that the fees to be charged in the event of a failure to complete will be specified in your contract with the solicitor.

societys_child

it still seems unacceptable and unfair

It would be unfair for the solicitor to be penalised because your buyer pulled out.

KRB2725

Were your sale and purchase not linked transactions? If your sale was at the point of exchange then I don't understand why conveyancing on your purchase had only just begun?

Was there anything on your quote from them about fees if your sale/purchase fall through?

alchemist.1

Pay the fees. No its not the norm.

The fixed fee is usually a cap on hourly rate and therefore you will be paying on hourly rate for the work done (if it works out below the fixed fee)

Hoploz

I don't see how you can be up to exchange on the sale but hardly started on the purchase. If the two transactions were not linked then why did the seller pull out?

Fees for the sale would be pretty much the full amount I would imagine - after all the solicitor has had to prepare the contract and collate all the information for the buyer, respond to their legal enquiries etc. to get s far as being up to exchange.

Not sure how far you've actually got with the purchase so can't really comment on this. Normally you pay a deposit at the beginning to cover the costs of searches which are done at the start so if these were done you may have already covered that amount.

glentoran99

Padilla wrote: »

I am trying to find out whether it is the norm for solicitors to inform you of no completion insurance so in the event of this you don't have to pay any legal fees? I wasn't informed of this insurance.

Also, without a no completion/no fee insurance or contract and solicitors charge for work carried out - would this be their hourly rate or pro rated against the fixed fee?

Our buyer pulled out just before exchange and as a result the vendors of the house we wanted to purchase pulled out. I have been sent solicitors fees and it is virtually the same as the fixed fee quoted for the purchase when the conveyancing had hardly even started and they have based this on their hourly rate and then as a goodwill gesture didn't charge me the hourly fees as apparently this would have been considerably more than the fixed fee but it still seems unacceptable and unfair to me to have to pay virtually the whole fixed fee amount when it was barely started and we didn't completely.

Any advise or details on your experience greatly appreciated

If you were exchanging conveyancing was pretty much almost done

Hoploz

To answer your question about insurance, I have heard of this but I don't think all solicitors offer it. When I was last buying and selling I asked mine and they said they didn't.

G_M

The answer is to read the solicitor's Terms of Business, and your contract with them.

Assuming you had a fixed fee quote for both transactions, then normally you'd be charged on their hourly rates for the work they'd completed up to the point of collapse of the deals, capped at the quote level.

Some solicitors will offer an 'no Completion no fee' basis, but rarely as standard - you'd need to negotiate /agree this up front. And you'd probobly still have to pay for disbursements (searches etc) that they'd paid out for on your behalf.

I believe there is some kind of insurance available, but with all sorts of exceptions as to the circumstances leading to the failure of the deal - who pulls out and why.

Padilla

glentoran99 wrote: »

If you were exchanging conveyancing was pretty much almost done

We were only exchanging on the sale. Completion dates for sale and purchase were not linked.

Padilla

societys_child wrote: »

It would be unfair for the solicitor to be penalised because your buyer pulled out.

I am not wanting to penalise the solicitor but the fees in relation to it completing vs not completing are not proportionate at all. For example in the most simplest terms for a transaction that completes you get charged x amount for say 10 items of work carried out but for not completing you get charged x+y+z for 4 items of work carried out. (Just trying to find a way to describe this better!).