Solicitors doubled my fees: what can I do?

Gentoo365

On the issue of the reserve he asked me to pay a "reserve of £5,000 to cover any apportionments that the vendors have paid in advance and are seeking reimbursement, e.g., Rates or service charges if the property is leasehold. Obviously, any part of this reserve not utilised will be returned to you immediately on completion." 
Is this standard practice? 

Thank you very much for your help.

That seems like a large amount. It seems like the solicitor is asking for an extra £5k to be held with them until completion so they can pay whatever is the proportion of service charges paid in advance that would be reimbursed as the vendor is not there fore the whole year (or whatever period the service charges cover).

..for a freehold house the charges will be much smaller so you would think a few hundred pounds would cover it.

The fact it mentions leasehold suggest it's a standard term/amount and you should ask for this to be reduced to reflect an amount closer to what the actual service charge is.

...or, just pay it, and get it back after completion, 

Jude57

Gentoo365 said:

On the issue of the reserve he asked me to pay a "reserve of £5,000 to cover any apportionments that the vendors have paid in advance and are seeking reimbursement, e.g., Rates or service charges if the property is leasehold. Obviously, any part of this reserve not utilised will be returned to you immediately on completion." 
Is this standard practice? 

Thank you very much for your help.

That seems like a large amount. It seems like the solicitor is asking for an extra £5k to be held with them until completion so they can pay whatever is the proportion of service charges paid in advance that would be reimbursed as the vendor is not there fore the whole year (or whatever period the service charges cover).

..for a freehold house the charges will be much smaller so you would think a few hundred pounds would cover it.

The fact it mentions leasehold suggest it's a standard term/amount and you should ask for this to be reduced to reflect an amount closer to what the actual service charge is.

...or, just pay it, and get it back after completion, 

I'm amused by the words 'e.g. Rates or service charges...' given that General Rates have not been payable on domestic property in England since 1989! We've had Community Charge from 1990-1992 and Council Tax since 1993. I'm guessing it's a copy and paste from a very old document or from one which refers to commercial premises for which National Non-Domestic Rates have been payable since 1990. Either way, not a good sign of attention to detail which should be paramount for a solicitor.

gazfocus

Just thought I'd point out that as you have now exchanged contracts, you are not in a position to not complete without a hefty penalty so as others have said, if you're really not satisfied with any explanation/reason the solicitor gives, you would need to pay under protest then challenge it later. 

lb00

Gentoo365 said:

On the issue of the reserve he asked me to pay a "reserve of £5,000 to cover any apportionments that the vendors have paid in advance and are seeking reimbursement, e.g., Rates or service charges if the property is leasehold. Obviously, any part of this reserve not utilised will be returned to you immediately on completion." 
Is this standard practice? 

Thank you very much for your help.

That seems like a large amount. It seems like the solicitor is asking for an extra £5k to be held with them until completion so they can pay whatever is the proportion of service charges paid in advance that would be reimbursed as the vendor is not there fore the whole year (or whatever period the service charges cover).

..for a freehold house the charges will be much smaller so you would think a few hundred pounds would cover it.

The fact it mentions leasehold suggest it's a standard term/amount and you should ask for this to be reduced to reflect an amount closer to what the actual service charge is.

...or, just pay it, and get it back after completion, 

Thing is I know service charge is paid quarterly. So the sellers will have paid until Sep 30 and he would just have to give them 6-7 days worth of service charge (Sep 23 to Sep 30). Other than the service charge what could this money be for? 
What I wouldn't want to happen is some extra fee springing up and him paying it automatically with this reserve..

gazfocus said:

Just thought I'd point out that as you have now exchanged contracts, you are not in a position to not complete without a hefty penalty so as others have said, if you're really not satisfied with any explanation/reason the solicitor gives, you would need to pay under protest then challenge it later. 

I'll phone him tomorrow and ask for clarifications, don't think I'll go to challenge it to be honest. 
Will just ask why he didn't notify me of the extra fees given what he wrote in his terms... I'll see if he can at least waive n.3 which seems the most unreasonable to me.
 Lesson learned: always agree on a fixed fee and local is not always better - I picked him as he was 10 mins away from my place but in the end never did an in-person meeting - always phone or zoom calls.

saajan_12

Aside from the disputed points, are any of the other charges mentioned in your original quote? Unless its the actual disbursements which are always added, I'd expect many of these to be anticipatable and hence included in the original quote.  

lb00 said:

Here's a breakdown of the fees, including 20% VAT:

1. Fee for dealing with Undervalue Transaction: £300.00 - did they quote when this came up?
2. Insolvency Declaration: £180.00  - did they quote when this came up?
3. Fee for dealing with HM Land Registry delayed Registration: £300.00  - did they warn if it gets more than another week, I'll start to charge £x?
4. Fee for Gifted Deposit Queries: £420.00 
5. Deed of Covenant: £180.00  - what is the work done?
6. Fee for Freehold Company: £300.00 - why was this a surprise?
7. Fee for Management Company: £300.00 - why was this a surprise?
8. Bank Transmission Fee: £42.00 - why was this a surprise?
9. Copying Charge: £24.00 - why was this a surprise?
10. Land Registry Search Fee: £8.40 - fair enough, disbursement
11. ID/AML Check (x3): £126.00 - why was this a surprise?
12. Local Authority Search: £305.40  - fair enough, disbursement
13. Stamp Duty Return Fee: £120.00 - why was this a surprise?
14. Indemnity Insurance Fee: £150.00 - did they quote when this came up?
15. Incidentals (Postage, Telephone calls, etc.): £48.00  - why was this a surprise?
16. Fee on Purchase: £2,340.00 - is this the original quote or the SDLT? 

On your other question, yes there should be some mention of apportioning regular charges, but this is fairly standard so may have been fairly brief. If it'll be returned upon completion then its a fairly short period, so the £5k isn't too objectionable, especially if you're not expecting to receive much money net after paying off the mortgage and deposit on the new property. 

lb00 said:

4. Additionally, my solicitor has included in the completion balance a "reserve of £5,000 to cover any apportionments that the vendors have paid in advance and are seeking reimbursement, e.g., Rates or service charges if the property is leasehold. Obviously, any part of this reserve not utilised will be returned to you immediately on completion." Is this standard practice, and should I agree to this reserve?

Obviously, I don't want to delay completion, but at the same time, I feel some of these fees are quite unreasonable. What would you do in my position?

TheJP

lb00 said:

Gentoo365 said:

On the issue of the reserve he asked me to pay a "reserve of £5,000 to cover any apportionments that the vendors have paid in advance and are seeking reimbursement, e.g., Rates or service charges if the property is leasehold. Obviously, any part of this reserve not utilised will be returned to you immediately on completion." 
Is this standard practice? 

Thank you very much for your help.

That seems like a large amount. It seems like the solicitor is asking for an extra £5k to be held with them until completion so they can pay whatever is the proportion of service charges paid in advance that would be reimbursed as the vendor is not there fore the whole year (or whatever period the service charges cover).

..for a freehold house the charges will be much smaller so you would think a few hundred pounds would cover it.

The fact it mentions leasehold suggest it's a standard term/amount and you should ask for this to be reduced to reflect an amount closer to what the actual service charge is.

...or, just pay it, and get it back after completion, 

Thing is I know service charge is paid quarterly. So the sellers will have paid until Sep 30 and he would just have to give them 6-7 days worth of service charge (Sep 23 to Sep 30). Other than the service charge what could this money be for? 
What I wouldn't want to happen is some extra fee springing up and him paying it automatically with this reserve..

gazfocus said:

Just thought I'd point out that as you have now exchanged contracts, you are not in a position to not complete without a hefty penalty so as others have said, if you're really not satisfied with any explanation/reason the solicitor gives, you would need to pay under protest then challenge it later. 

I'll phone him tomorrow and ask for clarifications, don't think I'll go to challenge it to be honest. 
Will just ask why he didn't notify me of the extra fees given what he wrote in his terms... I'll see if he can at least waive n.3 which seems the most unreasonable to me.
 Lesson learned: always agree on a fixed fee and local is not always better - I picked him as he was 10 mins away from my place but in the end never did an in-person meeting - always phone or zoom calls.

No solicitor fees are ever fixed, its all down to how complex the conveyancing is throughout the process and the type of property you are selling/buying.

saajan_12

lb00 said:

Gentoo365 said:

On the issue of the reserve he asked me to pay a "reserve of £5,000 to cover any apportionments that the vendors have paid in advance and are seeking reimbursement, e.g., Rates or service charges if the property is leasehold. Obviously, any part of this reserve not utilised will be returned to you immediately on completion." 
Is this standard practice? 

Thank you very much for your help.

That seems like a large amount. It seems like the solicitor is asking for an extra £5k to be held with them until completion so they can pay whatever is the proportion of service charges paid in advance that would be reimbursed as the vendor is not there fore the whole year (or whatever period the service charges cover).

..for a freehold house the charges will be much smaller so you would think a few hundred pounds would cover it.

The fact it mentions leasehold suggest it's a standard term/amount and you should ask for this to be reduced to reflect an amount closer to what the actual service charge is.

...or, just pay it, and get it back after completion, 

Thing is I know service charge is paid quarterly. So the sellers will have paid until Sep 30 and he would just have to give them 6-7 days worth of service charge (Sep 23 to Sep 30). Other than the service charge what could this money be for? 
What I wouldn't want to happen is some extra fee springing up and him paying it automatically with this reserve..

gazfocus said:

Just thought I'd point out that as you have now exchanged contracts, you are not in a position to not complete without a hefty penalty so as others have said, if you're really not satisfied with any explanation/reason the solicitor gives, you would need to pay under protest then challenge it later. 

I'll phone him tomorrow and ask for clarifications, don't think I'll go to challenge it to be honest. 
Will just ask why he didn't notify me of the extra fees given what he wrote in his terms... I'll see if he can at least waive n.3 which seems the most unreasonable to me.
 Lesson learned: always agree on a fixed fee and local is not always better - I picked him as he was 10 mins away from my place but in the end never did an in-person meeting - always phone or zoom calls.

How exactly was this described if not a fixed fee? That's pretty much the norm these days for standard residential purchases and sales. If you agreed an hourly or modular fee schedule without a base 'fixed' fee then yes there will be additions. Even with a fixed fee there can be unexpected extras, but much fewer.