Solicitor and auctioneer costs after sale fell through?

[kitog]

Does anyone know what fees should apply if a property sales falls through?

I sold a family property last year at a public auction but the buyer could not get the funds together and the sale has collapsed.

Before the auction I had agreed with the solicitor and auctioneer what their costs would be if the sale closed or if it didn't sell at auction - however we didn't cover this situation and I can't find any information on it.

I've requested a number of times from the solicitor what the fees should be, but they keep putting it off saying that they need to look up a similar case - in the meantime they are holding onto the deposit.

Is there anywhere else I can can get information on this as I feel that my solicitor isn't be upfront with me.

Thanks,
Ken.

 

[niceoneted]

While it is nice for your solicitor to have another case to bench mark the costs against. He should be well able to form a bill for the work done, how many hrs, what letters had to go out etc. Ask, in writing if necessary, for an invoice for work carried out to date stating that you wish to settle your bill. Add in a time frame if you like and failing getting an invoice you can contact the law society for advice or to make complaint.

 

[Bronte]

I sold a family property last year at a public auction but the buyer could not get the funds together and the sale has collapsed.

I've requested a number of times from the solicitor what the fees should be, - in the meantime they are holding onto the deposit.

.

Maybe you need to write to your solicitor. It is not at all right for him to hold on to your deposit for a long time. He should bill you and deduct the fees from the deposit. How long since the sale fell through?

Something odd about this story. An auction means that the buyer has to purchase. Did they hand over a substantial deposit on the auction day and did they sign a contract that day?

 

[ryaner]

Sounds like they are holding on to the buyers deposit, not the OPs. And since the sale fell through, the OP shouldn't be due the deposit?

 

[Brendan Burgess]

The OP is entitled to the deposit, as far as I know.

A contract was signed. They have the option of pursuing the buyer in court to complete the purchase, but this would be expensive and pointless.

As an alternative, they can hang onto the deposit.

What fee had you agreed in advance for the conveyance. The solicitor should pay you the excess over that as a first step and then bill you in full later.

Brendan

 

[Padraigb]

The OP is entitled to the deposit, as far as I know.

On an auction sale, yes.

... What fee had you agreed in advance for the conveyance. The solicitor should pay you the excess over that as a first step and then bill you in full later.

That is so self-evidently reasonable that a failure to so is going perilously close to misconduct.

Further, OP may find another buyer for the property, and some of the work done by the solicitor in relation to the aborted sale would be relevant to a future transaction. I suspect the solicitor has already lost that business.

 

[kitog]

Bronte
I've written a letter to the solicitor today asking a breakdown of the fees. I guess what I really wanted to know is whether it should be a percentage of the deposit or on an daily rate on the work carried out?

ryaner
The buyer had lodged a 10% deposit with our solicitor on the day of the auction and we have sent final notice that they will lose that deposit - however the solicitor delayed sending out that notice until last monday when it was due to be sent 3 weeks ago, so it really feels like they are trying to hold onto the deposit for as long as possible.

I was talking to the auctioneer today and they expect to get a percentage of the deposit, again I don't know if this is standard practice. The contract was no-sale no fees (we already paid for ads etc), but it did sell so I don't know where this leaves me.

Brendan / Padraigb
We had an outline of the fees for the conveyance from the solicitor before the sale, but they ended up doing a lot more work as we extended the closing date twice, so I'm worried that they will hit me with a large bill. I will take the approach you suggested and pay for the agreed conveyance fee and take it from there.

To be honest the whole experience with the solicitor has been very disappointing, do I need to go to another solicitor to find out what the fees should be? I had a look at the law society web-site last night but it said that they couldn't offer legal advice.

Thanks everyone.
Ken

 

[Padraigb]

... We had an outline of the fees for the conveyance from the solicitor before the sale, but they ended up doing a lot more work as we extended the closing date twice, so I'm worried that they will hit me with a large bill...

That's hardly a lot more work; more like a little. Because the sale was not concluded, they also avoided some work.

 

[ryaner]

The buyer had lodged a 10% deposit with our solicitor on the day of the auction and we have sent final notice that they will lose that deposit - however the solicitor delayed sending out that notice until last monday when it was due to be sent 3 weeks ago, so it really feels like they are trying to hold onto the deposit for as long as possible.

I'd be a little worried about this. I can partly understand them holding on to the deposit until everything is finalised, but only if they are actively trying to finish things off.

In case you are thinking it, the solicitors accounts will very rarely earn interest, so they don't gain that way by holding on to the money.

 

[Bronte]

How much is the deposit and how much initially did the solicitor tell you the bill would be? Did you get a quote in writing from the solicitor?

Does the potential buyer have any assets, you are entitled to go after them to enforce the contract but this is probably pointless.

No the solicitors fee should not be a percentage of the deposit. He should be paid for the work done.

I see no sale, and see no reason that you have to pay the auctioneer. If memory serves me correctly it is not when contracts are signed that the auctioneer gets paid but when the sale goes though, in your case it has fallen though. Who has suggested to you that you should pay the auctioneer a percentage of the deposit. Furthermore this is a very odd situation as it was an auction, whereby the potential buyer should have had to have finance in place before bidding. Was there an underbidder?

 

[mf1]

That's hardly a lot more work; more like a little. Because the sale was not concluded, they also avoided some work.

Actually, this sounds like a seriously, drawn out, tedious transaction!

If a vendor's solicitor is at the stage of issuing completion notices, following two delayed closing dates, then the problem with the finance only happened very late in the transaction.

Nonetheless, if all parties are now agreed that the deal is not proceeding and, if the purchaser has conceded that their deposit is forfeit ( it is not always that straightforward), the solicitor should be raising their fee and seeking payment, not holding onto the deposit.

OP states that there was no agreement on fees if the deal did not go through. In today's climate, that is careless all round. Anyone involved in property transactions will confirm that the deal is not done until the money is in the bank - anything can happen.

Most professionals will have a contingency fee scale - in this case, I suggest that all of the work has been done by the Vendor's solicitor and s/he deserves the total fee.

I can appreciate that, as the sale has not closed, the vendor has not got their funds but do they expect that the professionals should work for nothing?

mf