April 29, 2014 | Posted in:Conveyancing
Cost of Conveyance Legal Fees
Conveyancing fees not only differ based on which firm of solicitors you look at, but also between the cost of sales and purchases. Many people’s initial reaction is to assume there is some dishonesty at work when they notice a differentiation in the cost of conveyance legal fees for different sides of a transaction. In fact, the opposite is true. If you were charged as much for conveyancing on a sale as you were on a related purchase, chances are you have been ripped off. It is very unlikely that the firm is under charging for the work carried out on every purchase and much more likely that they are charging too much for sales. The reason for the disparity between fees is that there is more work involved for the conveyancing solicitor in a purchase transaction.
It is the responsibility of the purchasing solicitor to raise enquiries with the other side. This ensures that they obtain all possible information relating to the property and legal title that may affect their client’s decision to go ahead with the purchase. They will draft lists of standard and special enquiries that are usually sent out at the beginning of the transaction, ahead of the contract being drawn up by the sellers. When the replies to these enquiries are received from the sellers and their solicitors. The purchasing solicitor has to go through the information with a fine-tooth comb. In most cases, they will have to raise further enquiries or examine complex documents, such as planning permissions, certificates relating to the property, and title deeds. This is a large part of the conveyancing fees for purchasing a house as it is the conveyancers time you are paying for.
Leasehold Properties and Property Management Companies
The process of raising enquiries is complicated if the property in question is being sold on a leasehold basis. The contracts and title deeds are far more complex in these cases. Extra enquiries need to be raised with the freehold owner and any property management company responsible for the upkeep of the property. It is often a drawn out process trying to get replies from these parties. They have little motivation to prioritize this paperwork. There are also usually extra legal stipulations relating to the title, such as payment of ground rent. Due to the added complexity, leasehold purchases usually involve higher fees.
In cases where the property is being purchased with the aid of a mortgage, the purchasing solicitor will act on behalf of the mortgage lender, as well as the buyer. The solicitor will receive a copy of the mortgage offer. It is their responsibility to ensure that all the lender’s conditions are met. The purchasing solicitor is also responsible for arranging bank transfers for the deposit and mortgage advance. They ensure that these are paid in full to the seller’s solicitor in time for exchange and completion respectively.
Most mortgage offers require searches to be conducted against the property. Even in cash purchases, it is advisable to have these searches carried out. Purchasing solicitors have to contact various relevant agencies. These include such agencies as the Water Board and Local Authority, instructing them to carry out the searches and send reports. The purchasing solicitor will then study the reports to look for any potential problems that may affect the buyer or contradict the conditions of the mortgage offer. Where searches are not performed or any issues are found, the purchasing solicitor will also have to arrange for suitable indemnity policies to be put in place. The cost of these is often passed to the seller, the work is done by the purchasing solicitor.
None of this work is done on a sale, and so this is why conveyancing fees for purchasing a house costs more.