Law firms are routinely giving clients inaccurate initial estimates of conveyancing costs, according to Solicitors Regulation Authority (SRA) research.
For its Residential Conveyancing Thematic Review, published last week, the SRA visited 40 law firms offering residential conveyancing services and conducted detailed reviews of 80 case files. All the firms proactively communicated with clients and provided clear information on their complaints procedures, the researchers found, and firms were embracing technology.
However, more than a third of the firms gave inaccurate initial cost estimates by failing to include all the services and fees in their initial quote—the firms missed out information such as mortgage administration fees, electronic ID checks and administering gifted deposits.
Moreover, some 37% of firms failed to explain the real cost of third-party disbursements and their firm’s mark-up on these, with some charging up to ten times the actual charge for processing the transfer.
The research also highlighted failures to process paperwork efficiently, not explaining the difference between freehold and leasehold ownership, and failing to double-check that the client understood the long-term implications of contractual obligations and fees.
Six firms have been referred to the SRA’s internal disciplinary procedures as a result of the review.
Law Society vice president Simon Davis said: ‘All conveyancing costs should be presented upfront and at the earliest possible opportunity.
‘It is important to remember developers and estate agents have a responsibility to share all relevant information with purchasers at the very beginning of the process—including on the differences between leasehold and freehold models of ownership. More must be done to ensure that consumers are made aware of this distinction, and the long-term contractual implications, before committing to a purchase.’
Figures from the Legal Ombudsman show that residential conveyancing accounted for nearly a quarter of all complaints it handled over the past three years. In December 2018, the SRA introduced rules requiring greater transparency on pricing and services.
