When purchasing a property there are many factors and costs to be considered such as, negotiation of purchase price, fees for surveyors, cost of finance and speed of the transaction. This is before you turn your attention to work which may be required to refurbish or update a property.
For the majority of people buying a property will be their biggest and most stressful purchase. As a result it is too easy to accept your estate agent’s recommendation of a particular firm of solicitors over a local high street firm.
With the majority of solicitors advertising fixed fees it is tempting to assume that competition ensures that solicitor’s charges are reasonable. However this is often not the case.
Prior to instructing a conveyancing solicitor you should consider the following questions:
Is a fixed fee reasonable?
As with the purchase of any product or service it is advisable to obtain a number of quotations. Failure to do this can often result in paying uncompetitive fees. A recent example I have seen is where two people separately purchased shared ownership properties on the same housing development, via different solicitors at the same local solicitors firm. One paid just over £500 and the other just over £1,500.
What does a fixed fee not include?
According to Charles from Check My Legal Fees “When setting fixed fees solicitors make certain assumptions as to the work involved and the time the transaction will take.”
However, like many things in life things often do not go according to plan. Amongst other things there may be problems uncovered with the title of the property, issues with rights of access, additional work involved in dealing with your mortgage provider or additional work as a result of the actions of the seller and his legal representatives.
You should ensure that your solicitor confirms any circumstances where you will be required to pay additional fees and the manner in which additional fees will be charged.
Without this information, what at first appears to be a competitive fee could increase significantly.
Estimates
A solicitor is required to provide you with details of estimated costs of instructing them, explain how this is calculated and the assumptions on which this is based. Your solicitor is also required to provide updates as to costs during their instruction and where circumstances change and additional costs will be incurred.
Where your solicitor has failed to provide you with sufficient information as to costs, or seeks to charge its client more than estimated, the solicitor’s costs can often be limited to the estimate provided by their solicitor.
Referral Fees
Given the intense competition between solicitors for conveyancing work it has become common practice for an estate agent to earn a commission for every case they refer to a particulars firm of solicitors. This is typically in the region of £200.
There is therefore a clear motivation for a solicitor to recommend a particular solicitor regardless of the quality of service which will be provided. This may also result in your legal fees being higher than those charged by another firm of solicitors who do not pay a referral fee.
If the solicitor you instruct pays a referral fee to the estate agent this fee must be disclosed to you.
High Street Firms
Often local high street solicitors are able to offer comparable services at comparable prices. The advantage of instructing a local solicitor is that you can physically attend their offices and will have in most cases a dedicated person dealing with your case. Physical proximity can also speed up the process as you can attend to sign documents or prove your identity
Volume Conveyancing Firms
These firms can provide a costs effective service as they operate on a small profit margin. However in order to obtain a significant volume of instructions they often pay referral fees which may result in fees being equal to or higher than a competitor.
To retain profitability the service is operated with a strict focus on minimising costs. Examples include:
- The majority of staff employed being unqualified
- Very few qualified lawyers supervising a huge number of cases
- Property searches subcontracted to other companies operating outside the UK
- Difficulty in contacting the person conducting your transaction or obtaining updates and information.
What can you do if you are unhappy with your solicitor’s fees?
A client can challenge his legal costs in two ways:
- Utilise your solicitor’s complaints procedure
- Have your solicitors costs assessed by the court under the Solicitors Act 1974
Your solicitor’s complaint’s procedure
If you follow your solicitor’s complaints procedure it will take up to 8 weeks for your solicitor to provide its response. At this point you lose your automatic right to have your solicitor’s bill assessed by the court under the Solicitors Act 1974.
If you are not content with the outcome of your solicitor’s complaints procedure you can then you have 6 months in which to complain to the Legal Ombudsman. The Legal Ombudsman will then hear representations from both parties and make a judgement. The disadvantage of this is that there is less certainty as to the outcome and that you will be representing yourself against your solicitor.
Assessing your solicitors costs under the Solicitor’s Act 1974
You are able to have your solicitor’s bill assessed by the court under the Solicitors Act 1974.If the court reduces your bill by 20{ee2a2ced2e83a70af3b12a5f5f4bc88f1c095ae1846c54ee750c7ec9c020c045}or more your solicitor has to pay the costs incurred in challenging their bill.
You have an automatic right to have your solicitors legal fees assessed within 1 month of your solicitor providing and serving a bill of costs in compliance with the provisions of this act. Between 1 month and 1 year you are able to make an Application to the court to have your bill assessed. This is in most circumstances successful.
Often it transpires that a solicitor either failed to serve a bill of costs which complies with this act or to serve it in accordance with this act. Where this happens you still have an automatic right for the court to assess your solicitors costs incurred at any point within the last 6 years.
The fact that a 20{ee2a2ced2e83a70af3b12a5f5f4bc88f1c095ae1846c54ee750c7ec9c020c045} reduction is the definition of a win means that your legal fees can be assessed and advice can be provided with significant accuracy from the outset.
