All Topics / Help Needed! / Exorbitant solicitor charge

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  • Profile photo of kennykennykennykennykennykenny
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    @kennykennykenny
    Join Date: 2012
    Post Count: 23

    Hi guys,

    I have read this forum diligently for months and am in awe of the knowledge the regular (and not so regular) contributors possess in this property investing world, so thanks to everyone who shares here. You guys are such great motivation!

    I have struck a slight complication in obtaining my first IP in Victoria so I am asking for advice. I have engaged a solicitor for the property purchasing transaction based on a recommendation from family and friends. The solicitor has so far done a fine job, but nothing out of the ordinary, in going over the Section 32 doc and the contract of sale etc., except getting the wording of two conditions in the contract of sale changed to better cover me. Now that I've paid my deposit and the contracts have been executed by all relevant parties, I have received am estimate of the solicitor's fees. Unfortunately, I did not ask for a quote from the beginning, and the estimate from the solicitor is $3500 (GST inclusive). That to me is outrageously expensive when compared to the average cost of a conveyancer or solicitor for a straightforward property purchase. I have since emailed the solicitor twice to get a breakdown and explanation of the estimate, but of course I have had no replies from her since I wrote the email two days ago. What should I do? Change to a conveyancer or at least someone with a cheaper fixed fee? If I do, will that be a hassle? Also, I'm afraid the cost of the solicitor's work up until now will be quite high already so maybe the combined cost of the solicitor plus the new conveyancer will just be as high.

    I'm in two minds as to what to do and it's causing me a bit of stress.

    Profile photo of Joe007Joe007
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    @joe007
    Join Date: 2010
    Post Count: 1

    Hi Kenny,

    The solicitor I use in Victoria is old school and fantastic.

    If you want his details, that is, u decide to change, let me know.

    Your Solicitor's charge is way to exorbatant.

    Profile photo of FreckleFreckle
    Blocked
    @freckle
    Join Date: 2012
    Post Count: 1,680

    Get a full schedule of costs when its all over. If I recall correctly you can challenge these fees through the legal professions own oversight body. TerryW or Darryl might be able to chime in here and clarify that for you.

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    Seems pretty steep.

    $1k to $1.5k seems to be about the norm.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213

    When I was working for a martin place law firm I did conveyancing and we charged by the hour, $350. I ended up charging cliens $11,000, $7,000 and the cheapest was around $3.500. This is for average properties too – $500k houses etc. Clients were often professionals and even lawyers.

    The lawyer is supposed to disclose their fees up front and enter into a costs agreement with you.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of kennykennykennykennykennykenny
    Participant
    @kennykennykenny
    Join Date: 2012
    Post Count: 23

    Thanks for your comments everyone. I might get a quote from someone else, but lesson learned. So many to learn on this property investing caper!

    Profile photo of RPIRPI
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    @rpi
    Join Date: 2012
    Post Count: 308

    If you have not been provided with a costs agreement that complies with the legal profession act you should investigate further.

    If we charged by the hour and everything was done by a soli it would often top that. We charge fixed and in some cases though at under a third of that.

    RPI | Certus Legal Group / PRO Town Planners
    http://www.certuslegal.com.au
    Email Me | Phone Me

    Property Lawyer & Town Planner

    Profile photo of kennykennykennykennykennykenny
    Participant
    @kennykennykenny
    Join Date: 2012
    Post Count: 23

    We did receive a costs agreement, but not at the beginning when we engaged their services. We only got a costs agreement and disclosure statement halfway through the process (after contracts exchanged and deposit for the property was paid). If we cancel their services now, they will charge me for the work they've done up till now; can I challenge that since they did not provide the costs agreement upfront?

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213

    You can challenge it, but you received it near the start and let the lawyers proceed with their work. Did you sign a costs agreement? Even if you didn’t you implied you agreed to it by continuing to instruct. But this doesn’t mean you cannot ask them to reduce fees or you could challange it

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of kennykennykennykennykennykenny
    Participant
    @kennykennykenny
    Join Date: 2012
    Post Count: 23

    Hi Terry,

    I would have thought "near the start" would mean when we gave the contract and Section 32 to the solicitor to peruse, not after they've had the contract amended and we've all signed it. Anyway, we have not signed the costs agreement yet because we only received it yesterday, two weeks after engaging the solicitor to do the work.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    Hi Kenny,

    It will come down to your negotiation skills and then the solicitor rules and regulations. Have a look at the solicitor rules VIC and Legal professional act vic.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of kennykennykennykennykennykenny
    Participant
    @kennykennykenny
    Join Date: 2012
    Post Count: 23
    Profile photo of wema7300wema7300
    Member
    @wema7300
    Join Date: 2013
    Post Count: 1

    Hi Kenny,

    I found myself in a similar situation earlier this year. The law firm i used was one of the big national brands, but i don't see the added value of a lawyer compare to a settlement agent. The cost tripled compare to my usual bill from a settlement agent,  but my file was handled by a paralegal!! 

    Lessons learnt – if the transaction is straightforward, a settlement agent is sufficient for the job.

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    I tend to agree with you wema. For a straight forward purchase or sale a conveyancer should be fine. However, I also find that there are plenty of solicitors out there that will do the same job for a similar price anyway. Just make sure you have an understanding of their price structure before proceeding.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    But how do you know if it is going to be an easy conveyance?

    Conveyancers are not qualfied to advise in other related areas either – sucession issues, asset protection, bankruptcy.

    What if it turns out to be the executor of a deceased estate…

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of RPIRPI
    Participant
    @rpi
    Join Date: 2012
    Post Count: 308

    Conveyancing is the biggest area of claims in terms of both quantum and quantity on solicitor's professional indemnity.  

    RPI | Certus Legal Group / PRO Town Planners
    http://www.certuslegal.com.au
    Email Me | Phone Me

    Property Lawyer & Town Planner

Viewing 16 posts - 1 through 16 (of 16 total)

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