Solicitors not paying interest on their client account?

C

ColmOR

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Hi,
So we sold our house back in May. The money - 118k euro from the sale went into our solicitors "holding account" and has been there ever since (over six months). We have been waiting on a certificate of no audit from the revenue before funds could be released as we live in Australia. Finally yesterday we got the certificate and our solicitor when asked has transferred the funds into our bank account. I asked what happens to the interest that has been earned over the past six months and was simply told there isn't any. Our solicitor doesn't particularly like us nor us them. The reply was as short as possible and just didn't seem right... in short I don't trust them as far as I could throw them.
I have read the posts above and as with everything legal or otherwise in Ireland it seems to be as difficult as it possibly can be with no simple answer.

Does this seem legit? I am happy to leave it as is but don't want to be screwed over by solicitors .

Thanks in advance
Colm
 
There is practically no interest to be earned on deposit accounts these days, have a look at the best buys threads on here with the savings/investment rates. Back when original posts on this thread were written in 2007 interest rates on savings would have been a lot better, these days some banks are charging customers to hold the money for them so I would be inclined to believe the solicitor, even if they got some interest it would be miniscule I'd imagine.
 
ColmOR said:
Hi,
So we sold our house back in May. The money - 118k euro from the sale went into our solicitors "holding account" and has been there ever since (over six months). We have been waiting on a certificate of no audit from the revenue before funds could be released as we live in Australia. Finally yesterday we got the certificate and our solicitor when asked has transferred the funds into our bank account. I asked what happens to the interest that has been earned over the past six months and was simply told there isn't any. Our solicitor doesn't particularly like us nor us them. The reply was as short as possible and just didn't seem right... in short I don't trust them as far as I could throw them.
I have read the posts above and as with everything legal or otherwise in Ireland it seems to be as difficult as it possibly can be with no simple answer.

Does this seem legit? I am happy to leave it as is but don't want to be screwed over by solicitors .

Thanks in advance
Colm
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Some Solicitors keep client’s monies in an interest bearing client account, some don’t.
Where they do, they are supposed to account to the client for any interest earned over a certain threshold. I’m not sure what the current threshold is, but in my day it was €100.00.
Demand Deposit interest rates are currently in the region of 0.01% APR. So that should give you some indication of the interest earned, if any.
I spoke with a Solicitor yesterday and what’s looming on the horizon is negative interest rates i.e. banks actually charging customers interest for depositing funds.
 
Jayom75 said:
I spoke with a Solicitor yesterday and what’s looming on the horizon is negative interest rates i.e. banks actually charging customers interest for depositing funds.
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I heard this in the last few days as well - some circular from the Law Society about how to deal with it.

So be careful in drawing down mortgages early.
Your bank will charge you interest on lending it to you.
And your solicitor's bank will charge you interest for lending it back to them.

Brendan
 
@ColmOR - Interest rates in Australia are the highest in the developed world for many reasons I won't go into. Here in the euro area they are close to the lowest, so as other posters have advised, interest on that amount of money for 6 months will be microscopic. I would just leave it alone.

Brendan Burgess said:
So be careful in drawing down mortgages early.

Your bank will charge you interest on lending it to you.
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I doubt that day will come. A mortgage is far too profitable over 25/30 years for a bank to be playing silly games over very small amounts.
 
The bank is not playing any game?

They are charging you interest on their mortgage.

They are charging a solicitor with €1m in their client account a fee for holding that money.

Brendan
 
Brendan Burgess said:
They are charging a solicitor with €1m in their client account a fee for holding that money.

Brendan
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At any one time, a small solicitor’s practice which engages in conveyancing can hold several millions of euro at any one time in the client account. If the banks start charging solicitors for holding these funds, these costs will ultimately end up being passed on to the client in some shape or form by increased fees.
 
Jayom75 said:
At any one time, a small solicitor’s practice which engages in conveyancing can hold several millions of euro at any one time in the client account. If the banks start charging solicitors for holding these funds, these costs will ultimately end up being passed on to the client in some shape or form by increased fees.
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Which is fair enough but when they are getting interest on the money in their client account do they pass it on to their clients?
 
Purple said:
Okay, so when my former solicitor held over €100,000 of my for months, back in the day of decent interest rates, he should have paid me the interest that accrued?
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AFAIK, if (1) the Solicitor held the monies in an interest bearing client account and (2) the amount of the interest, if any, exceeded whatever monetary threshold was in place (€100 in 2004) then yes.
I do know that many Solicitors, certainly nowadays, won’t bother with an interest bearing client account as it’s too much hassle, especially given the low rates.
 
Purple said:
Okay, so when my former solicitor held over €100,000 of my for months, back in the day of decent interest rates, he should have paid me the interest that accrued?
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He should have paid you what the money would have earned on demand deposit--- which would be not much, but at 0.5% it would have been €250 if he had your money for 6 months. So probably yes. Something.
 
Incidentally, maintaining a client account is a significant admin overhead. Most small firms have a bookkeeper in every day (for maybe 3-5 hours). Without a client account, once or twice a month would be enough. Even when the client account generated interest, it is a long long time ago since the interest covered the associated bookkeeping overhead.
 
MOB said:
Incidentally, maintaining a client account is a significant admin overhead. Most small firms have a bookkeeper in every day (for maybe 3-5 hours). Without a client account, once or twice a month would be enough. Even when the client account generated interest, it is a long long time ago since the interest covered the associated bookkeeping overhead.
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I'm sure that's covered in the fees and charges that the client pays.
 
Purple said:
I'm sure that's covered in the fees and charges that the client pays.
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Yes, it is an overhead that has to be taken into account in setting fees. But when the interest covered this particular overhead, it meant that the clients whose transactions caused the overhead (mainly property and probate) also indirectly footed the bill. Nowadays all clients pay (indirectly) toward this overhead, even though only some of them cause it. I preferred the justice of the previous arrangement.
 
MOB said:
Yes, it is an overhead that has to be taken into account in setting fees. But when the interest covered this particular overhead, it mean that the clients whose transactions caused the overhead (mainly property and probate) also indirectly footed the bill. Nowadays all clients pay (indirectly) toward this overhead, even though only some of them cause it. I preferred the justice of the previous arrangement.
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In my case the solicitor was instructed in writing to clear a loan with the money but failed to do so for 8 months, until I got a Statement from the bank. Mind you it's also the same guy who couldn't close a sale because his wife had had a baby. I asked his secretary if he was aware that his wife was pregnant and that the gestation period for humans was around 9 months. She said he was so I asked what steps he had taken to ensure his business functioned while he was out. There was no satisfactory answer.
 
Purple said:
In my case the solicitor was instructed in writing to clear a lone with the money but failed to do so for 8 months, until I got a Statement from the bank. Mind you it's also the same guy who couldn't close a sale because his wife had had a baby. I asked his secretary if he was aware that his wife was pregnant and that the gestation period for humans was around 9 months. She said he was so I asked what steps he had taken to ensure his business functioned while he was out. There was no satisfactory answer.
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Sounds like getting interest on your funds was the least of your problems with this guy.... I hope you got meaningful redress and apologies eventually.
 
MOB said:
Sounds like getting interest on your funds was the least of your problems with this guy.... I hope you got meaningful redress and apologies eventually.
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Nope, not a squeak out of him.
 
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