Changing solicitors during a conveyancing transaction can add stress to buying or selling a home. Unfortunately, not always.
We hope you won’t have to change conveyancing solicitors, but we understand it happens sometimes. Clients may lose trust in their property lawyer. If a firm can no longer serve a client or closes, it may be required. This article explains how to transfer tasks easily.
Before switching solicitors, go to a senior member of the firm if you lose trust in yours. Your matter may be transferred to a firm solicitor who can better handle it.
How Do Firms Transfer Solicitors?
Most companies are willing to resolve client issues. If not, move your work to another firm immediately. Staying with a dissatisfied company benefits no one. Transferring tasks early in a transaction is easiest. Contracts set a completion date, making it harder.
Changing conveyancers after the exchange is risky since delays can result in costly penalties. If your conveyancing solicitor is no longer able to act for you, you may need compensation counsel. Homeward Legal can help you identify a top conveyancing counsel to easily take over your work.
Should You Pay for Previous Work?
Before switching, examine if you will have to pay the first solicitor for work already done and how much. Your written solicitor agreement will determine this.
Many firms offer “no completion, no cost” conveyancing. If your sale or buy falls through for reasons beyond your control, they won’t charge. If you switch firms, you may have to pay the original firm for work they’ve done even though it’s not finished.
If a firm stops representing you or closes, you may still have to pay for their work. The original solicitor’s terms will determine this.
Is it Complicated to Transfer Documents?
The initial law firm may hold onto paperwork until they’re paid for their work. Because of their lien, they can accomplish this.
This rarely delays anything. If contracts have not been transferred, a new firm can typically take up the task without all the correspondence and paperwork from the original firm. The other party’s lawyers may send the new business more records. If you sell, the new Sydney conveyancers can seek another title from the Land Registry.
The title deeds must be transferred to the new solicitor if your title is unregistered. If the property is mortgaged, the deeds must be returned to the lender before they can be released.
Does SRA Have to be Involved in the Transfer?
Another law firm will represent the Solicitors Regulation Authority (SRA) when it closes or “intervenes” in a solicitor or law firm they regulate. If a lone practitioner solicitor dies or becomes disabled, this can happen.
Most agents hold the file until the customer instructs another firm. Clients must hire a fresh firm that can take on a case quickly and finish it. Unfortunately, it takes time to sort through the files, and they need the client’s written consent to send the file to the new firm.
What if a Solicitor Holds Your Money?
If you change solicitors after giving them any purchase money or after they receive money on your behalf, you should be able to transfer the money to your new solicitor. Solicitors must keep client money in a separate bank account. Solicitors should transfer it to other firms upon request.
This does not apply to mortgage advances. If so, the lender must receive the money until completion.
When a firm closes, it must transfer client money to clients or new solicitors. The agent firm needs access to the closed firm’s accounts and records to authenticate the money’s owner, which can take time.
After purchase, the buyer’s solicitor may close before stamp duty or transfer registration. If this happens, the buyer would need another solicitor to fulfill these requirements. The SRA’s representatives can give the solicitor the duty and Land Registry costs, although it may take time.
How Do Transfers Affect Mortgage Transfer?
A mortgage offer will list the lender’s solicitor. This firm usually represents the buyer. If the buyer changes solicitors, the mortgage offer will be altered.
The buyer can switch to the lender’s firm if the lender isn’t willing to instruct the buyer’s firm. If the buyer’s solicitor changes, the lender won’t automatically transfer its instructions.
In that circumstance, the buyer could accept that the original firm will complete the mortgage (in which case they will expect to be paid for this work.) The buyer might inform the lender and request a fresh mortgage offer in the name of the new firm, but that would delay the process.
If the SRA intervenes in the mortgage offer company, the lender must be informed and instructed to submit a fresh offer as soon as practicable.
Are there any Penalties for a Solicitor Transfer?
If one party wants to change conveyancing lawyers before contracts are exchanged, fines (not additional fees) are rare. If a solicitor change delays completion after contracts are exchanged, penalties will apply.
If a buyer fails to complete on the contractual completion date, interest is payable at the contract rate, sometimes 5% or more above the base lending rate. If the buyer fails to finish following a notice to complete, the seller can withdraw the contract and keep the deposit. Sellers can sue for other contractual remedies and losses.
The buyer can also deduct interest from the purchase price and cancel and sue for losses and damages if the seller fails to complete on time.
Do I Get Compensation if My Solicitor’s Firm Closes?
When a law practice closes, client money should be protected and recoverable. Unfortunately, not always. Claim against the solicitors’ compensation fund for missing client funds must be made. You can make these claims on SRA’s website.
After a firm closes, clients may face legal fees or penalties for not paying Stamp Duty Land Tax (SDLT) within 30 days.
The compensation fund reimburses solicitor misappropriated funds, thus such expenses may not be paid. The firm’s indemnity insurance may cover some claims. This can take a long time and require professional help.
Conclusion
Having quality conveyancing services from a conveyancing lawyer is a great deal. They can help you deal with issues with property law and legal documents. As well, help you with professional indemnity insurance. Including disputes of your own conveyancing and lodge legal documents. Having a conveyancing solicitor with good understanding of property transactions and property transfer is the focus of many people.
When it comes to contract of sale disputes and other conveyancing work there is no DIY. You can’t simply sort it out yourself without causing more mess.
For all you need to know about Australian licensed conveyancer, legal fees, and conveyancing costs, our experienced conveyancing lawyers at Chamberlains can help you. To beat your Australian competition in property purchase and property settlement you should trust the right hands.
