Wrong completion fees after completing - shall I dispute?!

meganw1992

Myself and my husband have recently moved into a new build property (where the stamp duty was paid as an incentive, this is a point to remember for further on) 

We asked for a completion statement a couple of times between exchange and completion so we could better understand how much was due and we were given an itemised completion statement which varied each time. When it came to actually completing we were given our final completion statement with what we owed on and it broken down and we paid and happy days we move into the property. 

A few weeks later the solicitors get in touch and say they are very sorry but an error was made and we actually owe an additional £2400 as the completion statement they gave us was wrong. And we needed to pay it asap as they had to pay our stamp duty. I asked for a breakdown of where this went wrong and what the £2400 was for, also explaining that as the developers were paying the stamp duty how have they not got enough funds to pay this (£14k). They then emailed back and said stamp duty had been paid but they needed the £2400 asap and attached an up to date completion statement just stating how much everything cost. 

I have asked again and again for a breakdown of what the £2400 is for but they just keep sending me the same statement. 

They have emailed again today and said I will be fined £100 by HMRC if I don’t pay the £2400 due today. No explanation what the fine was for at all. 

It’s all so confusing. My question is, where do I stand with this? I’m not prepared to pay £2400 when I don’t know what exactly it’s for. I don’t know what has been paid and what hasn’t and I’m just confused how to move forward. Have they possible not paid stamp duty out of the total funds they received and taken their fees out of it for example? As surely that’s not right as stamp duty shouldn’t even come into our finances as the developers paid. 

Help please! 

loubel

Have you compared the first statement with the new one to see what's different? 

meganw1992

Yes, their fees are wrong and there’s a £1700 payment that isn’t included on the final statement for rental payments that are due on our shared ownership property account. As a side note these rental payments are incorrect, the account hadn’t updated with our payment when the completion statement was raised.

But, she is saying stamp duty hasn’t been paid because of the £2500 owed. 

kingstreet

The developer doesn't actually pay your SDLT. Their solicitor asks for a correspondingly lower amount to purchase the property. This should mean your solicitor has more funds in hand to cover the SDLT and other sale and purchase expenses. Does the gross price on the reservation minus the purchase monies handed over by your solicitor (from the completion statement) to the developer's solicitor equal the SDLT incentive?

loubel

You could argue that they should have prioritised paying your SDLT on time rather than taking their fees, but they clearly warned you that that was what they were doing. Either way you need to pay them the shortfall to clear your account.

eddddy

You need to clarify what you mean by "fees are wrong".

If for example, you mean the solicitor's legal fee on the earlier completion statement is £x and  it's shown as £y on the later completion statement - you should ask the solicitor why it has changed from £x to £y.


I don't really follow your comment about the £1700 rental payment either.

But if for example, you are saying the solicitor has paid £1700 too much to the housing association - you should contact the housing association and ask them to confirm that £1700 too much has been paid, and ask how they will pay it back to you.

 

EssexHebridean

You have an earlier email from the solicitors confirming that the SDLT had been paid - initially point them back to that as a good reason why you will not, in your view, owe the £100 fine plus the ongoing interest to HMRC. 

I would also be asking the responsible partner in the solicitors firm (this will be detailed in your terms of retainer with them) to provide a full breakdown or exactly what should have been on the completion statement with itemised detail against each line confirming exactly what it was for. 

If it turns out that the £2400 is genuinely owed, do you have it to pay to them? 

loubel

Apologies I've just re-read and spotted that they said they had paid the SDLT already, so you shouldn't have to pay the late payment penalty, but you will still need to pay the shortfall unless you can show that it isn't owed for some reason.

nicmyles

If the money is money the solicitor needs to pass on for purchase-related costs, you need to pay it.
If the money is their fees, and the fees differ from what you agreed initially, you should challenge it.
If it's not clear, you need to insist on a fuller explanation. You've mentioned emails, I would suggest phoning them if you haven't already.