If you are buying a house, will the final bill from your Conveyancing Solicitor be much higher than the amount you were quoted? Many people find themselves in this situation – they accept a quote for a cheap ‘headline’ figure, but don't read the small print. Then, on completion, they discover that numerous extra charges have been added to the bill.
Many Conveyancing Solicitors give fixed-fee quotes for all the work involved in Conveyancing – so the amount you are quoted is the amount you will pay on completion. However, not all firms follow this practice, as the clients of one South London law firm found to their cost.
The firm was recently taken to task by The Solicitor’s Disciplinary Tribunal over its charging methods for Conveyancing. Its partners were fined for several breaches of the Solicitor’s Code of Conduct.
The tribunal found that the firm had provided information about its costs which, far from being comprehensive and transparent, was largely impenetrable and hence misleading and inadequate.
How Conveyancing costs can exceed original quotes
This firm e-mailed quotes for their Conveyancing costs to prospective clients. They then sent by post a separate set of ‘terms and conditions’ which set out numerous items for which further charges would be made, so the final bill would be much more than the figure quoted.
In a number of specific cases which were referred to the Tribunal, several clients of the firm said that they had assumed that the amount quoted in the original email would be the total amount that they would pay. They had not noticed the additional items, which were set out in small print in the terms and conditions.
When they received their final bills they were annoyed to find that they were being asked to pay considerably more than they had been led to expect. But as bills were only sent just before completion was due to take place, they felt they had little option but to pay up.
These are some of the charges which this firm added to their final bills:
- An additional charge for dealing with the buyer’s mortgage
- A contribution towards the cost of the firm’s professional indemnity insurance
- Charges for postages, telephone calls, photocopying and other incidental expenses
- Fee for making a telegraphic transfer of completion funds
- A charge for checking the freehold title if the property being purchased was leasehold
- Advice regarding any deed of covenant
- Charges for making Company and Chancel repair Searches
- A charge for completing the Stamp Duty Land Tax (“SDLT”) form
The tribunal did not criticise the Solicitors for making extra charges for such items. Instead, the tribunal made it very clear that clients should have been clearly told that the bill could include further costs, at the same time as they received the original quote. It commented that information on costs should be comprehensive and transparent, but the way this firm had provided information was largely impenetrable and hence misleading and inadequate.
Do not confuse Solicitor’s costs with disbursements
Confusion does sometimes arise in respect of what are called ‘disbursements’ – these are payments which Conveyancing Solicitors must make to other bodies on behalf of clients during the course of a house purchase. The most common of these are the fees for various searches, land registry fees, and of course SDLT.
It is usual for these items to be shown in a Conveyancing quote, to give clients an idea of the total amount they will have to pay. But Solicitors do not profit in any way from these fees and charges, which are fixed by the various bodies to which they have to be paid.
When a quote includes figures for such items, these figures will be based on the fee scales or rates of duty current at the time of the quote. The amount which will actually have to be paid by the buyer will depend on the fee or duty payable at the time of payment, which may be changed after the quote was given. This is outside the control of the Solicitor.
Advantages of a fixed-fee quote
Many people will think it ridiculous that work should be categorised as an 'extra' when it will be a necessary part of the Conveyancing work on any normal house purchase. For instance the SDLT return form has to be completed for virtually all property purchases, so Conveyancing Solicitors should expect to do this when quoting fees, and include such a charge in even the most basic quote.
All Solicitors must have professional indemnity insurance in order to provide their services, so it is generally not appropriate to make and additional charge for this to each client.
When comparing quotes for Conveyancing, make sure that you know whether the Solicitor is quoting a fixed fee for all the work, or merely giving a base figure or estimate, to which other charges will be added.