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The purpose of this article is to help you understand how to interpret a quote so that you can ensure you get the right deal for you.
Charging By The Hour (Time Recording) The traditional method of charging for solicitors is by the hour (or more usually in 6 minute blocks).
This is known as time recording.
In many areas of law this method is still used but it conveyancing a fixed fee is generally agreed at the outset.
It is unlikely you will find a specialist conveyancer that time records however if using a high street solicitor, particularly one who does not specialise in conveyancing, he may.
This is likely to be more expensive than a fixed fee arrangement and certainly will be more difficult to budget for so if cost is an issue, solicitors who time record are best avoided.
Fixed Fee Arrangements As mentioned above it is usual when instructing a conveyancer to agree a fixed fee at the outset, rather than an hourly rate.
This is generally cheaper and is obviously easier to budget for however even a "fixed" fee can alter.
The element which is fixed is the conveyancer's legal fee, rather than the disbursements.
The terms and conditions which govern your agreement with your conveyancer will usually contain a clause which states that additional fees may be charged if the transaction involves substantial additional work which could not have been anticipated at the outset.
What to Do Before Agreeing a Conveyancing Quote Before instructing a conveyancer you should always obtain a quote in writing which should be broken down and should include any disbursements which can be reasonably anticipated at the time.
One tactic that some conveyancers will use to make their fees appear low is to display their headline fee as something impossibly low but then add on "extras" which in reality would apply to all (or the majority of) transactions.
For example one firm might quote £100 plus VAT for dealing with a purchase but then in the small print state they will charge an additional £150 plus VAT if you are buying with a mortgage, whereas another firm might quote £293.
75 inc.
VAT to include dealing with your mortgage.
If you are getting a mortgage then these fees are identical, but the first looks the more tempting.
In order to establish what you actually pay you need to check what is and is not included in the basic fee, and what disbursements are likely to be necessary and what they will cost.
The paragraph below should help.
Elements of a Transaction Which Should Be Included In The Initial Quote There are a number of common elements of a transaction which some conveyancers will charge separately to their basic fee in order to make their quote appear more attractive.
The following is a list of some of those elements.
Though this list is as comprehensive as possible conveyancers are always coming up with inventive new ways to bump up their charges and inevitably there may be some omissions:
- Fee for dealing with new mortgage (purchase only)
- Fee for redeeming mortgage (sale only)
- Leasehold supplement (where the property you are buying or selling is leasehold.
The vast majority of flats are leasehold whereas the majority of houses are not) - SDLT Fee (purchases only and where the purchase price is £40,000 or more)
- Stationery and postage charges
- Indemnity fund contribution
- Telegraphic transfer fees
- Electronic identity checks
- Acting for an additional buyer/seller (applies where there is more than buyer/seller)
- Fee for obtaining searches (purchase only and only in the event there is no HIP, this is in addition to the cost of the searches themselves)
There may be more than one fee payable.
Part of the cost is a disbursement charged by the solicitor's bank but most firms also charge a fee.
The average total is £30 plus VAT per transfer ** Some firms will now check a client's identity by means of an electronic search which negates the requirement to provide identity documents.
The total fee will include a disbursement element and often also a fee.
Before instructing a firm you should check that any of the above elements which are relevant to your transaction are included in the fee you have been quoted.
Try to get this confirmed via letter or e-mail so that you have some hard evidence to refer to if there is a dispute later.
By checking whether all of these elements are included you will be able to compare different quotes equally.
What Are Disbursements and What Can I Expect to Pay For? Disbursements are payments which your conveyancer has to make to third parties on your behalf and for which the conveyancer received no financial benefit, such as land registry fees, stamp duty etc.
The price of disbursement should not vary from conveyancer to conveyancer, though searches are an exception as different firms will use different search providers.
Below are listed the standard disbursements payable in respect of a sale and a purchase: Sale:
- Electronic identity check (not applicable where you are asked to provide paper ID at the outset)
- Official copies from land registry of title
- Telegraphic transfer fee (one fee per mortgage being redeemed)
- Telegraphic transfer fee (for transferring sale proceeds to you)
- Energy performance certificate (if not already obtained)
These fees vary greatly and will not usually be known at the time the quote is issued.
Purchase:
- Electronic identity check (not applicable where you are asked to provide paper ID at the outset)
- Conveyancing searches
- Priority search
- Bankruptcy search (if buying with a mortgage)
- Telegraphic transfer fee (for transferring funds to seller's solicitor)
- Stamp duty land tax (if applicable)
- Land registry registration fee
Other than payments due to landlords, your conveyancer should be able to give accurate estimates of the cost of these disbursements and you should ask for details to help you budget.
Changes in Conveyancing Fees During the Transaction The conveyancer will generally reserve the right to charge additional fees should the transaction involved significantly more work than was anticipated, and could reasonably have been anticipated, when the quote was given, however before doing any work for which he intends to charge a higher or additional fee he must discuss it with you and obtain your authority.
If he fails to do so then he is not entitled to charge for the work.
Generally, only work which is outside of the scope of a normal conveyancing transaction should give rise to an additional fee, for example dealing with a defect in the title or drafting a deed of trust.
If ordinary parts of the transaction simply involve more work than average then this would not normally be sufficient, for example if you are selling and the purchaser raises more enquiries than a purchaser would be generally expected to raise this would not be grounds for the conveyancer to increase his fee.
If your conveyancer does advise during the transaction that he intends to increase his fee and you are not satisfied that the increase is reasonable, and if you cannot resolve by discussing the matter with the person handling your case you should ask for a copy of the firm's complaints procedure and follow this.
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