Solicitors costs doubled!!

misterthrifty

Hi

My solicitors have exchanged documents on the house I am buying and have written for a balance cheque but the figure they are quoting for their fee is almost double what they first quoted and this has certainly not been a difficult transaction as I am only buying, not selling.

I'm worried about prejudicing the purchase but is there anything I can do at this stage. If I refuse to pay it all they may not complete on the agreed date, next Friday, which will land me in additional costs.

Help!

Mr T

Bossyboots

They cannot double their fee. If they gave you a fixed quote, they will have to stick to it. If they gave you an estimate then the actual figure must be very close although it can be a little more. This is not only basic contract law but also one of the specific rules governing solicitors.

You must ask them to explain their fee and point out to them that you had agreed a figure and you expect them to stick to it. If any unforeseen difficulties arose during the purchase, they should have notified you and warned you the fee might go up. It is too late now to ask you to pay more. If they had to do more work than anticipated then I am afraid they will have to take the loss if they did not renegotiate with you at the time.

Have you got your Rule 15 letter. This should have been sent to you when you first instructed them. This sets out their terms of business, who is dealing with your file and who handles complaints in the firm.

Also, they should have sent you an invoice for their fees. On the back of that invoice it states what you can do if you believe you are being overcharged. The fees in question may not be high enough for you to want to go down that route though.

You say they have written for a balance cheque. Is this by way of completion statement which itemises each and every expense (including their fees). If not, ask for the figures to be set out in this way.

They should not refuse to complete just because you have not paid the difference between the quote and the bill. They will be leaving themselves wide open to a negligence claim if they do. What you should do though, having checked the completion statement, is to pay everything else that is correct and the sum of their fees you agreed.

If you cannot sort this out with the solicitor handling the matter, you will need to contact the person named in your Rule 15 letter as the complaints handler and discuss it with them. The complaint should be in writing but if you explain there may not be time, they should speak to you on the 'phone.

misterthrifty

Cheers for that, the original quote I had was £363, plus VAT and disbursements. I have now had a completion statement stating their costs (but no invoice) as £695.90, I asume this includes VAT. The work has, in my opinion, been less than may have been anticipated and no suggestion was made that costs would be increased. I will write for an explanation but I may have to pay the original quote and hope that everything goes through.

Thanks again

Bossyboots

You will have to pay the original quote as in conveyancing it is usually a fixed figure, not an estimate. However they cannot increase the costs by the amount you have stated. They must also provide you with an invoice, simply putting it on the completion statement is not good enough. They are legally bound to provide you with an invoice which has on the reverse your rights to challenge the bill and what you need to do in relation to that. Without that, I would be inclined not to pay their costs at all and I certainly would not pay more than the original quote.

They should hold the balance of the costs in abeyance while you go through their procedures.

I may be being really sceptical here, but it seems like a clever way to get extra costs by slapping it in the completion statement when you are going to feel compelled to pay in case anything goes wrong. I would argue that as the item in dispute is their increased costs, they must complete using the costs figure originally given and you sort it out with them afterwards. They may just capitulate on the costs if this is their scheme. There is no financial loss to them by you only paying the agreed fee, it would be more difficult if a disbursement item was in dispute.

Fifer

Just a thought. The difference between the £363 and the £695 isn't explained by VAT and disbursements, is it?

Bossyboots

Fifer wrote:

Just a thought. The difference between the £363 and the £695 isn't explained by VAT and disbursements, is it?

That did occur to me, but the completion statement should list the disbursements separately, the entry for fees should just be the costs plus VAT.

garysletters

In the original quote, read through all the waffle that came with it. Lots of solicitors will charge extra for every phone call you or they make, and for every letter they recieve etc.
Did any extra searches need doing??? It may have been a simple transaction for you, but did they do anything they didn't quopte for (should've asked you first anyway).

Was their charge just the charge for their services, maybe the £695 charge includes the search charges that are not part of the solicitors fee.

eaasy answer is to ring the solicitor up and ask for the breakdown as mentioned before.

for example (these are all approximate figures, and may NOT include VAT

£363 (solicitors fees)+
£200 (search fee)+
£40 (stamp duty form) +
£60 (land registry inc. tax)+
£32.90 (funds transfer)

Total = £695.90 (+ VAT)
These are the type of disbursments mentioned above.

Hope this helps, even if not good news.

Bossyboots

In good practice all the items you have listed would appear separately on the completion statement as they are not solicitors costs but disbursements.

In conveyancing it is rare for fees to be based on telephone calls and letters received, it is usually a fixed fee and before that it was a percentage of the purchase/selling price.

I agree though that the OP needs to re-read his correspondence from the solicitors and as I have said, he really does need to get an invoice from them for their costs anyway. They cannot simply lump it onto the completion statement in this way.

misterthrifty

Hi

Yes, the original quote was £363 plus standard disbursements, additional charges and VAT and covers "solicitors costs noramlly associated with this type of transaction"

The completion statement shows:-

Local searches £124.08
Water search £42.77
Land registry £150
Stamp duty £2000
Solicitors costs £695.90

This is after I have paid the deposit and exacerbates an already stressful time. If they don't complete on the agreed date I believe there are damages of £100 per day, not to mention me having nowhere to live!

Maybe it is a try on and people are prepared to pay a couple of hundred quid for peace of mind.....not a philosophy I go along with.

Bossyboots

Did they give you any idea what the additional charges were? I have not come across this before and they should have set out what these were going to be for.

You must ring them on Monday and insist they send you a proper invoice for their charges and ask them to explain the figures on the 'phone.

While reading the figures back, it has occurred to me that maybe you have a mortgage. You would be responsible for the solicitors fees for that although I don't consider almost double your quote is an acceptable mark up. Additionally, those fees should be shown as a disbursement not part of your costs. Your solicitors cannot include those fees on their invoice paper as costs but again, this could simply be a badly set out completion statement.

Even if some of the difference is accountted for in mortgagees' costs, you must still be provided with an invoice from your solicitors with the information I previously mentioned printed on the reverse. You should insist this is provided to you on Monday, by e-mail or fax. It may be that when you speak to them the mystery is solved and all wel and good. Otherwise, don't let them get away with the try on because I have a rotten feeling that that is exactly what it is.

misterthrifty

This is the reply I have had from the solicitors

"I am also sending out to you a copy of the estimate which you signed
which clearly shows the profit costs of £353.00 together with the
additional payments/disbursements which total the amount shown in my
completion statement. Kindly confirm by return that this is agreed. I will on
completion let you have a copy of my account showing all payments."

It seems to me that I am expected to pay the bill, substantially above the quote, without the opportunity to see exactly what I am paying for! Is this reasonable?

Update

The solcitors are now saying that they would "prefer" me to see & agree the estimate before they agree with exchange.