A large website-based price comparison business has revealed that as many as a quarter may pull out of their property transaction if they miss the stamp duty holiday deadline.
Last month MoneySupermarket surveyed 2,000 people who are currently buying property, it revealed that 24% said they would terminate the potential purchase if they think it will continue after March 31st, when the SDLT is currently ending.
Today’s Conveyancer asked conveyancing experts if once vendors/buyers realise that they are not going to make the deadline are they going to charge for the work done to date.
Beth Rudolf, director of delivery at the Conveyancing Association said:
“In these difficult and challenging times, it would be sensible for home movers to expect to have to pay for any work completed if the transaction fell through. However, some firms and panel managers do offer ‘no sale no fee’ schemes so consumers should check their terms of business.”
Paul Sams partner at Dutton Gregory Solicitors commented. He said:
“We try to work on a no sale no fee basis as much as possible. Generally as my team are experienced we like to think we can judge time frames better than most. March is a long way off and a lot can change by then. We are making it clear to clients we will work as fast as the slowest person in the chain will allow. Given the number of firms not taking on new work our fees are going up because of the simple laws of supply and demand. Again as we are not turning away work then unlike those who are we should not need to chase it if and when that time comes.”
John Jones, head of conveyancing at BBH Legal Services Limited said:
“my firm, under its terms of business, has a discretion in the event that a transaction does not proceed to completion in that we may charge the Client for work carried out up to that point. The bulk of the work done on any matter is usually carried out prior to exchange of contracts, say, on average, 80% of it. If a matter aborts we may charge the Client a proportionate amount of the agreed fees based on what stage has been reached. Clients know this may happen from day one plus we are telling them from day one that we cannot guarantee completion by or before the SDLT holiday deadline.”
Sarah Dwight, conveyancing solicitor added:
“I think that this means that there are potentially a lot of disappointed house movers – if someone pulls out in a chain due to missing the deadline, and others in the chain still want to proceed, it will be very difficult to manage. I think that solicitors are under an obligation to tell their client that it may not be possible to meet the deadline and to make all reasonable enquiries as to whether they would still proceed if it weren’t for the SDLT holiday, making sure that they have sufficient monies to complete and pay the SDLT if their chain completes after the end of March.
“I would hope that solicitors would still charge for the work done (especially as we are all working very hard) but this would depend on the arrangement a firm has with a client. Some firms are no sale, no fee and that is what is agreed at the start of the transaction. I would always make a charge for the work done to date.”
Nicola Lebish, senior associate and head of enfranchisement in the residential department at Birketts LLP further added:
“Generally, conveyancers do not operate on a no completion no fee basis. I do not expect this to be any different as a result of the SDLT holiday. This does require firms to carefully handle clients and to set realistic expectations taking all matters into consideration – for example how long the local authority search result will take for the specific property will take, if a mortgage is required, etc. This expectation needs to be discussed before the instruction is accepted so that the client is very clear on what is achievable within certain timeframes.”
