Conveyancing fees are an important part of any property transaction, whether you’re buying, selling, or both. These costs cover the legal work involved in transferring ownership of a property from one person to another and are typically paid to a solicitor or a licensed conveyancer. But when do you actually have to pay these fees?
First, let’s clarify that there are two types of conveyancing fees: legal fees and disbursements. Legal fees are what the conveyancer or solicitor charges for their professional services, while disbursements are additional costs paid to third parties for things like searches, land registry fees, and stamp duty.
As for when these fees need to be paid, it typically depends on the agreement with your solicitor or conveyancer and the progress of the transaction.
- Upfront: Some conveyancers may ask for a deposit upfront. This is usually a small proportion of their legal fee. It’s designed to cover them in case you decide to pull out of the transaction.
- During the conveyancing process: Disbursements, such as search fees, are usually paid when the searches are carried out, which typically occurs after your offer on a property has been accepted. Some conveyancers might request that you provide them with an amount of money upfront to cover these costs, often referred to as money on account.
- On completion: The majority of the legal fee, along with other outstanding disbursements, is usually payable on completion. This is the day when the keys are handed over and you can move into your new home, or the buyer can move into the home you’ve sold.
Remember, if you’re buying a property, you’ll also need to pay Stamp Duty Land Tax (if the property you’re buying is over a certain price and in England or Northern Ireland), or Land and Buildings Transaction Tax (in Scotland), or Land Transaction Tax (in Wales). These taxes are typically due within 14 days of completion, but most people aim to pay it on the completion day itself.
In general, it’s a good idea to start saving for your conveyancing fees as soon as you decide to buy or sell a property. When choosing a solicitor or conveyancer, make sure you get a detailed quote so you know what costs to expect. This quote should break down the total cost into legal fees and disbursements, giving you a clear idea of what you’re paying for.
It’s also worth noting that if for any reason the property transaction falls through, you’ll usually still be liable for certain costs. Some solicitors offer a “no move, no fee” guarantee, which means you won’t pay the legal fee if the transaction doesn’t go through, but disbursements already paid out will still typically be owed.
In conclusion, you’ll need to pay conveyancing fees at various stages of the property transaction process. Make sure you budget for these costs and understand what each fee is for, so there are no surprises along the way. It’s always a good idea to discuss the payment terms with your solicitor or conveyancer at the start of the process so you know exactly what to expect.
