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    • Kent77
    • By Kent77 10th Mar 18, 4:38 PM
    • 17Posts
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    Kent77
    Conveyancing referral fee query
    • #1
    • 10th Mar 18, 4:38 PM
    Conveyancing referral fee query 10th Mar 18 at 4:38 PM
    Hi

    We are (finally) due to complete on Tuesday and have received (and paid) our completion statement.

    Going over all the paperwork again, I came across the following statement on the original illustration...

    Under the duty of disclosure required to be made for introductions, we must inform you that the solicitor/conveyancer will pay a referral fee for promoting their services. This fee will be paid by the solicitors themselves and not by you.
    Your chosen solicitor/conveyancer will pay Legals Direct Ltd a fee of three hundred and fifty six pounds plus VAT.


    Now, on the completion statement there is an item "Legals Direct Fee 427.20"

    Am I being really thick here or are they trying to pull a fast one?

    If they aren't meant to be charging us this, how do I get this money back? I'm not expecting them to say "ooops sorry, here you go".

    TIA
Page 1
    • googler
    • By googler 10th Mar 18, 5:30 PM
    • 14,777 Posts
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    googler
    • #2
    • 10th Mar 18, 5:30 PM
    • #2
    • 10th Mar 18, 5:30 PM
    So ... you hired them on the basis of a fee illustration which specified this referral fee, but now feel you shouldn't pay it ..... because?
    • ACG
    • By ACG 10th Mar 18, 5:45 PM
    • 16,822 Posts
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    ACG
    • #3
    • 10th Mar 18, 5:45 PM
    • #3
    • 10th Mar 18, 5:45 PM
    I think you are misreading the statement.
    You will not be paying them directly, you will be paying your conveyancers the amount which you agreed with them and they will pay everyone out from that which will include the 420 odd pounds.

    I have 2 solicitors I work with, one I get nothing from but they are local and on the average side of pricing. The other, I receive a kickback of 150 but they are cheaper than almost any other solicitor even with the 150 included. But with those 2 solicitors, if there is a problem at the legal stage I will do what I can to help. If a customer uses their own solicitor then I do not get involved with the solicitors.

    A 350 referral fee seems like a lot in my opinion.
    Whoever referred you has done alright, but realistically if the cost is the same as what you agreed to, there is not a lot you can do.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • Kent77
    • By Kent77 10th Mar 18, 6:32 PM
    • 17 Posts
    • 3 Thanks
    Kent77
    • #4
    • 10th Mar 18, 6:32 PM
    • #4
    • 10th Mar 18, 6:32 PM
    So ... you hired them on the basis of a fee illustration which specified this referral fee, but now feel you shouldn't pay it ..... because?
    Originally posted by googler
    Thabk yoy for replying.Firstly, the paragraph quoted is buried outside the main points of the illustration. I.e. in the small print. And the fee is not itemised

    Secondly, because the wording used is "paid by the solicitors themselves and not by you". It does not say "paid by the solicitors on your behalf".

    I don't know how that sentence can be misinterpreted. Nor am I saying that I am right and either of you are wrong.

    I think you are misreading the statement.
    You will not be paying them directly, you will be paying your conveyancers the amount which you agreed with them and they will pay everyone out from that which will include the 420 odd pounds.

    I have 2 solicitors I work with, one I get nothing from but they are local and on the average side of pricing. The other, I receive a kickback of 150 but they are cheaper than almost any other solicitor even with the 150 included. But with those 2 solicitors, if there is a problem at the legal stage I will do what I can to help. If a customer uses their own solicitor then I do not get involved with the solicitors.

    A 350 referral fee seems like a lot in my opinion.
    Whoever referred you has done alright, but realistically if the cost is the same as what you agreed to, there is not a lot you can do.
    Originally posted by ACG
    AVG, thank you for your insight. Perhaps I have misinterpreted it, I don't know (see above comment). To me, the language is clear and unambiguous- they pay, I do not.

    As far as I see it, I am paying (not exact figures here) 1000 Conveyancing fee and 400 referral fee. Separately itemised on the completion statement, with the illustration stating that there is a referral fee which is paid by the solicitors and not by me.

    If the statement showed 1400 Conveyancing costs and the illustration has the referral fee hidden in the small print- ok, suck it up. But it does not. Its a separately billed item that is not listed in the illustration as a billable item.

    I hope this explains why I am questioning this.

    I have found the following guidance from the Law Society which seems very clear to me....

    Q. Can I pass on the cost of the referral to my client?


    A. Referral fees are simply part of the cost of running your practice, in the same way as other marketing costs. They may be taken into account in calculating the fees to be charged, either generally or in respect of particular clients, but they may not be charged directly to the client. You may, for example, charge a higher fee for clients referred by a particular source, to take into account any referral fees payable; or you may choose to spread the cost of referrals across all of your clients. Either way, all referred clients must be informed that a referral fee is being paid and, where appropriate, the amount of the payment.


    A referral fee is not a disbursement and may not be charged to the client as such, nor treated as such for accounting purposes. It is not a liability that you have incurred on the client's behalf in the course of acting for the client. It is your liability, incurred by you before the client instructed you. By including the referral fee as a separate item on the client's bill or in a quotation (whether or not it is described as a disbursement), you would be suggesting that the client is responsible for paying the referral fee, when this is in fact your liability under whatever agreement you have entered into with the introducer.


    I'm not being sore here. If the fee is correct and proper, then no problem. But this guidance is also unambiguous.
    • ACG
    • By ACG 10th Mar 18, 6:49 PM
    • 16,822 Posts
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    ACG
    • #5
    • 10th Mar 18, 6:49 PM
    • #5
    • 10th Mar 18, 6:49 PM
    My understanding is that if you agreed a fee of 1,000, that is what you will pay.

    That 1,000 will include your referral fee.

    Give them a shout and ask the question, but I honestly think that is how it will be. 350 is a bit cheeky for just passing on a name and number but estate agents usually charge every penny they can.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • Kent77
    • By Kent77 10th Mar 18, 6:56 PM
    • 17 Posts
    • 3 Thanks
    Kent77
    • #6
    • 10th Mar 18, 6:56 PM
    • #6
    • 10th Mar 18, 6:56 PM
    My understanding is that if you agreed a fee of 1,000, that is what you will pay.

    That 1,000 will include your referral fee.

    Give them a shout and ask the question, but I honestly think that is how it will be. 350 is a bit cheeky for just passing on a name and number but estate agents usually charge every penny they can.
    Originally posted by ACG
    Thank you, that's exactly what my understanding of the illustration was...

    Total is 1000. You pay this please (oh by the way, we have to tell you there's a referral fee and the 1000 we're charging you might be more than what you'd have paid if you came to us directly)
    • ACG
    • By ACG 10th Mar 18, 8:45 PM
    • 16,822 Posts
    • 8,776 Thanks
    ACG
    • #7
    • 10th Mar 18, 8:45 PM
    • #7
    • 10th Mar 18, 8:45 PM
    Not trying to kick you whilst you are down, but that 350 will almost definitely be built in to the price ie, you paid that 350 indirectly - if you had gone to the same solicitors directly it would have cost you less, although maybe not 350 less.

    Best to try and look at the positives in this situation. You were quoted a price you were happy with.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • G_M
    • By G_M 10th Mar 18, 10:34 PM
    • 44,049 Posts
    • 52,169 Thanks
    G_M
    • #8
    • 10th Mar 18, 10:34 PM
    • #8
    • 10th Mar 18, 10:34 PM
    I think you may be right, but we'd need to see your original quote wording in full.

    If the quote stated eg a 750 fee for the basic conveyancing, plus disbursements, plus VAT etc

    and then the clause you quoted, then the 427.20 should be paid by the solicitor to Legals direct out of their 750 (+ VAT).

    "Under the duty of disclosure required to be made for introductions, we must inform you ......"

    This does not look like a fee chargeable to you - it is simply (as stated) 'disclosure'. ie in the interests of transparancy they have to tell you of the financial connection between themselves and Legals Direct.

    It should not appear on their bill to you.
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