The government have recently published a revised ‘How to’ guide in relation to purchasing a property. You can find a copy of the guide here. This guide makes it clear that there remains a large number of firms who do not provide accurate cost estimates at the outset of a conveyancing transaction.
The rules on cost transparency were updated in December 2018, and firms are now required to publish a guide on their costs and enable Clients to obtain a more detailed estimate from the firm’s website, without the Client having to make a specific request or provide personal details. You can find Hart Reade’s conveyancing fee here.
In the majority of cases, Firms should be able to give Clients an accurate estimate of the likely costs involved in a transaction at the outset, before any work is undertaken. It is a source of immense frustration for Clients when they agree to instruct someone based on the fee estimate given only to find that this is not reflected in the final invoice received at the conclusion of the transaction.
Is that fixed fee estimate you were given at the outset really fixed?
In a competitive conveyancing service market it has unfortunately become common practice for a number of firms to offer a low ‘headline’ price in order to entice potential Clients to use their services. This often does not reflect the final figure which is due at the end of the transaction.
Whilst the headline figure may be fixed there will often be a multitude of additional costs added on which are not disclosed to Clients at the outset. These fees are predominantly incurred in purchase transactions and commonly include:-
- A fee for completing and filing the Stamp Duty Land Tax Return with HM Revenue and Customs;
- A fee for completing and filing the application for registration of your purchase with the Land Registry; and
- A fee for reviewing your mortgage offer.
Whilst it is not uncommon for these fees to be charged, and Hart Reade do indeed charge some of the above ourselves, these should be disclosed to Clients at the outset. When you receive an estimate from us you will see that whilst the fee is broken down into sections there is a clear total column for our legal fees.
In addition to legal fees it is again common for other fees to be included for necessary reasons. These commonly include;
- Bank transfer fee; and
- Anti-Money Laundering or ID search fee.
Again, these fees should be disclosed to Clients on the estimate at the outset, with an indication of the costs involved in regards to the same. In most cases these additional fees are charged per name. Again we make this clear on our estimate and show the cost per event.
Additional legal fees:
Whilst we aim to do our best to advise Clients as to the likely total cost there may be instances where unexpected matters arise. These may be in cases where a property has not yet been found and when this is the case, it is not a ‘standard’ matter. The following are common examples where costs will increase:-
- Leasehold properties;
- New builds;
- Shared Ownership;
- A Help to Buy Mortgage; and
- Where there is a defect in your title
If we are aware of the above when we provide you with an estimate we will list the additional fees required for the same in the estimate. If this information is not made clear at the outset we will notify you as soon as we become aware, which is usually when we receive initial paperwork either from the Estate Agent or the other conveyancer, of any additional costs.
We are aware that other firms do not necessarily make this clear at the outset and will only notify you of an increase in the invoice at the conclusion, pointing to a page buried deep in their terms of business allowing them to make additional charges in various circumstances.
What else am I required to pay?
We feel that it is important to give Clients an accurate estimate as to the total cost likely to be involved in a transaction. This means that we will give a clear indication as to what other costs are likely to be incurred that we will be responsible for settling as part of the transaction. These usually include:-
- Stamp Duty Land Tax;
- Land Registry fees
- Searches (which usually include a local authority search, drainage and water search and, an environmental search) If you know the address of the property you are purchasing we will likely be able to provide an accurate estimate of the costs of the searches as these do vary from Council to Council; and
- There are additionally some minor searches which are carried out at the Land Registry which usually cost no more than £10
In addition, in the case of Leasehold purchases, there will be a fee payable to the Managing Agent for registering the new Buyer’s details. This is an administrative cost which is quite often significant and can run into hundreds of pounds. On our estimates we provide a guide as to the likely cost for budgeting purposes but cannot know what the exact cost will be until this information is received from the managing agent in the course of the purchase process.
- Official Copy Entries of your title from the Land Registry
In addition, in the case of Leasehold purchases, a Vendor is required to provide a ‘sales pack’ (provided by the Managing Agent) to the Buyer. The Managing Agent will charge a fee, again this can be significant, for the provision of this pack. We will provide a guide as to the likely cost for budgeting purposes but again will not know the exact cost until we commence work and receive this figure from the Managing Agents.
When obtaining an estimate for conveyancing fees we would recommend that you ensure that it encompasses all above mentioned points. There may be situations whereby a Firm is required to increase conveyancing fees due to unforeseen circumstances, however, in the modern age situations where these unforeseen circumstances may arise should occur in the minority and not majority of cases. You should note that firms are obliged to update you if the costs estimate changes. If you do not receive a new costs estimate and are not made aware clearly as to what additional fees may be payable in advance, you are not obliged to settle these at the culmination of a transaction.
If you would like to receive an accurate estimate of your conveyancing fees please do give us a call on 01323 841481.
Alternatively, please complete the contact form below.
Please note, this article does not constitute legal advice and its content may be subject to modification depending on any changes in the law.