A house is often a person’s biggest investment during their adult life. Alongside the house or flat itself being a costly investment, additional fees also begin to mount up when it comes to removal firms, structural surveys and conveyancing fees. That is all before furnishing, modernising and decorating the property once you have the keys. In this article, we look at conveyancing fees in more detail and ask the question “Do I need to pay conveyancing fees upfront?”
When looking for a conveyancing solicitor, unlike other areas of law, they should provide you with an itemised quotation of what you should expect to pay. In conveyancing, we appreciate circumstances are different and so fees are often set for different sets of circumstances. For example, someone using a mortgage and therefore requiring works in this regard should expect to pay an additional mortgage lender supplement over someone purchasing in solely cash from their own savings. The same applies for someone purchasing or selling a leasehold flat, which requires additional work in relation to the landlord, shared and common parts of the building or land over someone purchasing a freehold property.
Conveyancing quotations are in most cases separated into professional costs, i.e. costs you pay to the solicitor for their legal expertise and disbursements, third party costs paid for associated services. Examples of disbursements including ID Checks, fees to the HM Land Registry for registering the property in your name, Property searches through a third-party specialist provider and HM Land Registry document fees for downloading Official copies of the documents held at the Land Registry for a particular property title or titles.
However, at an expensive time, it is important to know financial obligations and also a timeframe for those fees. You know you will need to pay several thousand pounds in fees, disbursements and stamp duty, but at what times in practice do you have to actually pay that money to the solicitor. We recognise that budgets are managed carefully and need to take into consideration any big outlays at certain times. At Express Conveyancing, we work hard to make sure you are not left asking “do I need to pay conveyancing fees upfront?”
Many Firms, including here at Express Conveyancing, will take a proportion of the overall bill at the start of the transaction. This is often known as money on account or fees on account. It is used to cover third party disbursements such as ID checks, Land Registry document fees and searches (in a purchase). This amount varies from Firm to Firm but is often in the region of a few hundred pounds.
The remaining amount is then payable in time for completion, or from completion funds in the event of a sale.
As completion nears, a solicitor will produce a completion statement. It is often worked out and will pass between the two solicitors on either side of the transaction before a final version is sent to you for payment.
What is included on a completion statement?
Well, the short answer is everything.
In a purchase, a completion statement will show the total amount payable for the property. It will show a deduction for any mortgage fund being received. The solicitor will then list the professional fees and supplements, disbursements, stamp duty (or Welsh Land Transaction Tax). It will also include anything that has been required or negotiated as part of the transaction e.g. indemnity insurances, money for furniture or white goods. In the case of a leasehold property or one falling within an Estate Management Company, apportioned fees for service charge, estate management fees and notice fees will also be on the statement. The initial fees paid onto the account will be deducted and you will then have a final amount to pay.
In a sale, a completion statement will show total amount being received from the sale, any mortgage redemption amounts. The solicitor will then list the professional fees and supplements, disbursements, plus anything negotiated as part of the sale with the buyers such as a contribution towards indemnity policies etc.
If you own a leasehold property, then you may have some service charges or notice fees to settle upon the sale of the property. Your buyer’s solicitor may have also agreed a retention on the account. A retention is a small amount held back in the solicitor account in case of any unsettled Management company fees when the account is transferred over to the new buyer. Anything left of this will then be deposited back to you after the designated amount of time.
When do I pay conveyancing fees with Express Conveyancing?
Here at Express Conveyancing, we work hard to ensure as much fee transparency as possible and to help clients budget for what is an expensive time in their lives. Our team are happy to chat through quotes and check to ensure everything is included in our quotes specific to your transaction. Therefore answering the important question of “do I need to pay conveyancing fees upfront?” We also offer a no obligation quote comparison service because we recognise that not all solicitors use the same way of charging fees or the same terms for different fees. We are also transparent on what needs paying up front and what comes later in the transaction.
