FTB: Conveyancer adding an exorbitant fee for 'arranging' chancel indemnity insurance

robinium

Hi all,

I'm a FTB who has started the process of buying a property over the last couple of weeks. I appointed the conveyancer which was recommended by the agent (which in hindsight, is probably a mistake, but I was on a cruise with patchy phone signal while all of this happened, so I made a spur of the moment choice) and so far, I have only paid them for searches. Their initial quote was just over £2,000, which seems quite pricey, so I expected a good service. They very firmly advertise themselves as UK's number one conveyancers and have very positive reviews on Trustpilot etc.

Anyway, today, they said that the property is at risk of chancel liability, which I had never heard of until now. They recommended taking out a policy to cover this and have quoted me a price of £125 for the premium, plus their cost of arrangement. I did some of my own research, and found that the premium for this product is typically less than £20, meaning the solicitor is charging a pretty hefty premium.

After wading through the pile of documents they sent my way, I found that the actual premium they're offering to sign me up for is only £8. From my reading online, most solicitors do not charge extra (beyond the quoted conveyancing costs for the whole purchase) for arranging this type of insurance, and among those who do, the fee for arrangement is typically under £20, since it is such a common part of the home buying process and very quick and easy to add. This leaves me thinking that I'm being ripped off by my solicitor on fees for this purchase. Perhaps someone who is more experienced with the home buying process can give their thoughts on this? I'd really appreciate it.

It also appears to me that the solicitor has not checked with the vendor whether they've taken out a policy on the property already, as these policies typically seem to cover the property indefinitely. Given the previous purchase was in 2014, I would suspect there's a high chance that they've already taken out the policy and I would have expected my solicitor to ask them this. Does that seem like a reasonable expectation?

Thanks in advance to anyone who can help weigh in on this with their opinions!

robinium

Just to add, this comes after paying £430 on searches, which I also thought to be quite high, but I went ahead with them. Now that another higher than expected cost has come along, I am getting more and more sceptical of the conveyancers (AVRillo). 

TBG01

 I appointed the conveyancer which was recommended by the agent (which in hindsight, is probably a mistake, but I was on a cruise with patchy phone signal while all of this happened, so I made a spur of the moment choice) 

That's still on you.

Their initial quote was just over £2,000, which seems quite pricey, so I expected a good service

Means nothing without a breakdown of the fees. A £2,000 quote can quickly come down to £1000.00 for the actual legal work. You also seemingly did not get quotes elsewhere to compare 

They recommended taking out a policy to cover this and have quoted me a price of £125 for the premium, plus their cost of arrangement. I did some of my own research, and found that the premium for this product is typically less than £20, meaning the solicitor is charging a pretty hefty premium.

No, they're charging for their time sourcing a policy, reviewing the policy, reporting on the policy and then putting the policy on risk, which likely isn't covered in their initial fee

After wading through the pile of documents they sent my way, I found that the actual premium they're offering to sign me up for is only £8

Okay so they're actually charging £117 for the work, which if you consider their hourly rate, is quite reasonable. 

From my reading online, most solicitors do not charge extra (beyond the quoted conveyancing costs for the whole purchase) for arranging this type of insurance, and among those who do, the fee for arrangement is typically under £20

The firm i work for used to charge for it, and charged £145 plus VAT for the work. So using the same logic most Solicitors do charge for it and charge more than £125

It also appears to me that the solicitor has not checked with the vendor whether they've taken out a policy on the property already, as these policies typically seem to cover the property indefinitely. Given the previous purchase was in 2014, I would suspect there's a high chance that they've already taken out the policy and I would have expected my solicitor to ask them this. Does that seem like a reasonable expectation?

Simple. Ask the Solicitor confirm whether or not the vendor already has a policy or has it been raised. 

Just to add, this comes after paying £430 on searches, which I also thought to be quite high

Based on what? Searches are third party disbursements I.e the Solicitor has no say in the costs. If you're feeling ripped off, asked for an itemised breakdown with the invoices.

robinium

TBG01 said:

 I appointed the conveyancer which was recommended by the agent (which in hindsight, is probably a mistake, but I was on a cruise with patchy phone signal while all of this happened, so I made a spur of the moment choice) 

That's still on you.

Their initial quote was just over £2,000, which seems quite pricey, so I expected a good service

Means nothing without a breakdown of the fees. A £2,000 quote can quickly come down to £1000.00 for the actual legal work. You also seemingly did not get quotes elsewhere to compare 

They recommended taking out a policy to cover this and have quoted me a price of £125 for the premium, plus their cost of arrangement. I did some of my own research, and found that the premium for this product is typically less than £20, meaning the solicitor is charging a pretty hefty premium.

No, they're charging for their time sourcing a policy, reviewing the policy, reporting on the policy and then putting the policy on risk, which likely isn't covered in their initial fee

After wading through the pile of documents they sent my way, I found that the actual premium they're offering to sign me up for is only £8

Okay so they're actually charging £117 for the work, which if you consider their hourly rate, is quite reasonable. 

From my reading online, most solicitors do not charge extra (beyond the quoted conveyancing costs for the whole purchase) for arranging this type of insurance, and among those who do, the fee for arrangement is typically under £20

The firm i work for used to charge for it, and charged £145 plus VAT for the work. So using the same logic most Solicitors do charge for it and charge more than £125

It also appears to me that the solicitor has not checked with the vendor whether they've taken out a policy on the property already, as these policies typically seem to cover the property indefinitely. Given the previous purchase was in 2014, I would suspect there's a high chance that they've already taken out the policy and I would have expected my solicitor to ask them this. Does that seem like a reasonable expectation?

Simple. Ask the Solicitor confirm whether or not the vendor already has a policy or has it been raised. 

Just to add, this comes after paying £430 on searches, which I also thought to be quite high

Based on what? Searches are third party disbursements I.e the Solicitor has no say in the costs. If you're feeling ripped off, asked for an itemised breakdown with the invoices.

I am in no way, shape or form trying to say that isn't on me, apologies if that was misrepresented in my post. They offer a 60 day / no fee (excluding third-party disbursements, of course) service if you're unhappy with them, which is the reason I went ahead with it under my circumstances of not having reliable phone service. 

I have received quotes elsewhere. Three reputable (at least, from Trustpilot and Google reviews) local firms are quoting £500+ less than their total fees, the vast majority of which come from the legal fees and in-house admin fees.

I don't believe they have sourced, reviewed, reported on etc the policy, they have a generic policy that they attempt to sell to every single client (+ their fees); that is strongly suggested from the policy document and email wording. 

In addition to fairly extensive research online where I have not found a single instance (prior to your input) of someone being charged more than £60  from their conveyancers for this type of policy (with the majority only being passed the actual premium), I have asked one of the quoting firms mentioned about if they include this in standard legal work; they have confirmed they do.

housebuyer143

Do you actually need it? My solicitor tried to flog me one when a little bit of reading made it clear that it was no risk to me. 

robinium

housebuyer143 said:

Do you actually need it? My solicitor tried to flog me one when a little bit of reading made it clear that it was no risk to me. 

From my reading, it seems highly unlikely, especially given the previous sale (to the vendor) transacted after October 2013, but according to some sources (e.g. SAS Daniels Solicitors ) there is still a small risk. If it was just the £8 premium, I'd not hesitate to just add it on, but over £110 of additional fees from AVRillo makes it a more significant consideration.

TBG01

The likelihood of it ever being needed is slim to none. The same goes for most indemnity policies.

But the same people who are made aware of the risk and choose not to get one, are the same people who would ring up on a Monday morning complaining that the risk they took is now a costly one, so who can they look to blame instead of taking responsibility.

It's all well and good saying 'Well that wouldn't be me' but your Solicitor has likely heard it countless times but still been on the end of a complaint lodged against them with people not knowing the repercussions those have. 

robinium

housebuyer143 said:

Do you actually need it? My solicitor tried to flog me one when a little bit of reading made it clear that it was no risk to me. 

Thanks for prompting me to have another investigation with my full attention, after work.

So the legislation seems to suggest:

From 13 October 2013, Chancel Repair Liability ceased to be an overriding interest which meant that if it was to continue to affect a property, it had to be registered at the Land Registry and be stated on the title as a potential liability to homeowners. Approximately 250 churches applied to the Land Registry and notices of this right was attached to more than 12,000 properties.

I have checked the title deeds from my conveyancer - no mention of chancel repair liability on the deeds. Vendor purchased the property in mid-2014, which is after the deadline, and they purchased for a sum of money. As far as I can tell, this means I'm in the clear. Unless I'm missing something, solicitor probably should have spotted this... rather than recommending me to pay for the unnecessary search.