Conveyancing Costs FAQ
Fixed Fee Conveyancing
Our promise to you is that we will complete your standard conveyancing transaction for a fixed fee. However, if your matter changes after it has commenced, or you require legal services that are beyond the scope of our fixed-fee service, additional costs may be charged.
Additional Legal Costs
Our promise to you is that we will complete your standard conveyancing transaction for a fixed fee. However, if your matter changes after it has commenced, or you require legal services that are beyond the scope of our fixed-fee service, additional costs may be charged.
The purpose of these FAQs is not to prepare you for the charging of additional costs, but to reduce the likelihood of our having to do so. We hope that by drawing your attention to some of the situations that can cause a matter to move away from the standard conveyancing process, we can assist you in avoiding additional costs.
What does fixed-fee conveyancing mean?
Fixed-fee conveyancing means that you are able to pay a single lump-sum amount to cover all of the conveyancing work associated with your conveyancing transaction. In the case of a purchase matter, the fixed-fee will be collected at settlement. In the case of a sale matter, a portion of the fixed-fee will be payable after the sale documents have been prepared, with the balance collected at settlement.
The advantage of paying a fixed-fee is that you know from the outset what your conveyancing will cost. Of course, fixed-fee conveyancing can be offered only where the nature and extent of the legal services being provided are known, and resources can be allocated in a standard and uniform way. This means that we must determine what is included in a standard conveyancing matter, and what is not included.
Because we know with certainty what will be involved in a standard conveyancing matter, we can establish procedures and policies, develop standard form documents, and allocate time according to the tasks required to complete the matter in a time and cost effective manner. Sometimes a matter may begin as a standard matter, but because the client changes their mind about something, or something happens that causes the matter to be "derailed", additional resources must be allocated to the matter, and it ceases to be cost-effective. In such cases an additional cost may be charged (see our heading "Additional Legal Costs" below).
How has the fixed-fee been calculated?
Our fixed-fee has been calculated by reference to a number of factors:
- The cost of time and resources required to complete the matter.
- The requirement for involvement by professional lawyers and conveyancers as the matter proceeds.
- Risk management and legal compliance responsibilities.
- Costs payable to other agencies (search companies, councils and utility authorities, settlement agents).
- Office costs (postage, telephone, photocopying, faxes etc.).
- Marketplace competition.
- Automation through technology and economies of scale in the processing of standard transactions.
The setting of a fixed-fee requires careful calculation, taking all of the above into consideration. We have set our fixed-fee at a level that provides maximum service and legal protection, while providing an acceptable profit level, where a matter remains within industry norms and resource inputs remain predictable and cost-effective.
What is included in the fixed-fee?
A broad set of inclusions can be viewed on our website at "Fixed Fee Conveyancing - Purchase" and at "Fixed Fee Conveyancing - Sale". When you instruct us to proceed with your conveyancing matter we will provide you with a copy of the Work Plan that will be used for your transaction.
The Work Plan sets out every task, and every step, required to complete a conveyancing transaction. A copy of the Work Plan is attached to each conveyancing file, and the conveyancer with carriage of your matter will tick off each step as it is completed.
Everything appearing on the Work Plan is included in our fixed-fee.
Can I be charged more costs in addition to the fixed fee?
Yes. If your matter ceases to be standard, and requires the allocation of additional resources, you may be charged additional costs. Similarly, if something goes wrong along the way (see "When are additional costs charged?" for some examples of unforeseeable situations that can occur) additional costs may be generated.
How can I avoid having to pay additional costs?
See "Can I avoid incurring additional costs?" below.
What information will I get about conveyancing costs?
All clients receive a full Costs Disclosure Statement and a Costs Agreement as required under the Legal Profession Act 2004. The Costs Disclosure Statement explains how we charge for our services, and the Costs Agreement is a document you sign to confirm that you understand how we charge for our costs, and that you wish to have us proceed with your matter on that basis.
What if I dispute the costs of have been charged?
If you believe that we have made a mistake, please draw it to our attention immediately. If you feel that we have been treated unfairly in terms of costs charged, and we are unable to resolve the matter to your satisfaction, there are numerous avenues of complaint available to you.
For full details see:
When are additional costs charged?
We are able to charge a fixed-fee for our conveyancing services because we know what is required in a conveyancing transaction, and we can calculate the time and resources needed to effectively complete a standard conveyancing matter in normal circumstances.
Additional costs may be charged whenever the conveyancing transaction departs from the normal conveyancing process. Departures from the normal conveyancing process can occur in a number of ways, including:
- Contract variations - Variations are changes made to the contract after the contract has been signed. These include changing the settlement date, nominating substitute or additional purchasers, change of names.
- Over-servicing - Where a client requires personal contact with our staff in circumstances that is well beyond what is required for the completion of their conveyancing matter (e.g. unnecessary and frequent telephone/emails to check on progress of the matter, or to have us follow up on other parties, hypothetical questions, or contacting us with questions that have already been answered in correspondence or FAQs) Please see our Lawyer and Client Contact FAQ for more information on these.
- Mistakes - Mistakes made by other parties, and which create additional work to be performed on your behalf. (Of course, if we make a mistake we will not charge you for work associated with rectifying the situation.) Common examples include mistakes made on sale documents by real estate agents, incorrect payout figures provided by banks, banks causing settlement to "crash" (see our "Settlement FAQ" for more information on this), clients providing incorrect information which requires documents to be rectified.
- Unforeseen situations - These can include death, bankruptcy, disputes or other issues that impact on the transaction and result in the need for additional work.
We say that additional costs "may" be charged, because we do not always charge for additional work, particularly if the additional work does not significantly impact on the time spent on your matter.
How are additional costs calculated?
Practitioner Remuneration Order - Schedule of Fees
The guide for the charging of additional costs is the Legal Profession Act 2004 Practitioner Remuneration Order which sets out a schedule of tasks and their applicable costs.
We use the Practitioner Remuneration Order to calculate the costs applicable to a particular action, and then fix our fee below the total schedule fee.
For example, we calculate the cost of a variation to a contract as follows:
Schedule fees according to Practitioner Remuneration Order:
- Receive instructions by email: $10.40
- Peruse email instructions: $10.00
- Reply by email to confirm instructions: $26.20
- Draft letter to other side: $26.20
- Transmit letter by fax: $10.40
- Receive response from other side by fax: $10.40
- Peruse response: 10.00
- Draft advice to client: $26.20
Total: $129.80
In addition, if there are any telephone calls associated with the variation, the schedule cost for each call is $40.30 per quarter-hour or part thereof.
However, we do NOT charge the full schedule fees when calculating additional costs.
We Do Not Charge Full Schedule Fees
We do NOT charge the full costs as set out in the Practitioner Remuneration Order. In the example above, our fixed fee for such a variation is capped at $110, and we do not charge for any telephone calls between our office and the other party's lawyers or with the client when negotiating the variation.
We take this approach with all additional costs, setting fixed-fees where possible, to limit the amount payable by the client.
Will additional costs be itemised on my invoice?
Yes. Any additional costs generated during your conveyancing matter will be fully itemised on your invoice.
Can I avoid incurring additional costs?
It's easy to avoid incurring additional costs in most cases. Here's how:
- Don't call us, we'll call you - We realise that this may sound a little rude, but it's best to get straight to the point. You should assume that we know what we're doing, that we are keeping your matter on track and acting in your best interests, and that as an accredited Law 9000 Legal Best Practice law firm we have systems in place that ensure that your matter will be completed properly and on time. Unnecessary contact by telephone can render a fixed-fee matter unviable, and may therefore generate additional costs. (See our "Lawyer and Client Contact FAQ" for more information about this). If we need your instructions, or if we require further information from you, we will contact you. When we contact you about something, contact and your return calls/emails are included in our fixed-fee.
- Don't change horses mid-stream - When you sign a contract you and the other party are making a promise to do everything that is contained in the contract by the dates and times specified in the contract. The banks and lawyers who receive a copy of the contract will plan their work on the basis of the contract provided. This includes data-entry, the generating of documents, writing to other parties to confirm arrangements, and a host of other tasks. Changing the contract after the day of sale has a ripple effect through a number of different parties and their offices, and this increases the amount of work and time required for the processing of the matter. It also increases the risk of mistakes. Changing the contract after the day of sale will invariably generate additional costs.
- Don't stray from the Work Plan - When we commence your matter you will receive a copy of our Work Plan for your conveyancing matter. The Work Plan sets out all of the tasks associated with your conveyancing matter, and we mark off each task as it is completed. Our fixed-fee is based on the tasks set out in the Work Plan, and so it provides an excellent guide to what is included in our fixed fee. If you want us to do something that is not on the Work Plan, it is likely that the task will attract additional costs.
- Read all communications - Some clients have told us that they do not have time to read the letters or FAQ, and that they prefer to telephone or email us to find out what they need to do. There are two problems that arise when a client fails to read communications:
- We never provide verbal legal advice, and only written legal advice can be relied upon.
- Failure to read communications can lead to misunderstandings, mistakes and additional legal costs (See our "Lawyer and Client Contact FAQ" for more information about this).
- Do not accept advice from anyone but us - Real estate agents have a very bad reputation for misleading consumers, particularly if they fear that they may lose their commission. You should never communicate with the real estate agent after the contract has been signed, and you should refer the real estate agent to us if he/she contacts you about your matter. Similarly, if your bank asks you to contact us on their behalf, you should provide the bank with our details, inform them that you are legally represented, and ask them to contact us. (See our "Lawyer and Client Contact FAQ" for more information about this).
- Do not allow real estate agents, mortgage brokers, banks or others to use you as a conduit to us - You have engaged us to represent you in your dealings with the other parties associated with your matter. We know what has to be done to have your matter settle on time, and we know the roles of the other parties who are involved. Sometimes a party may attempt to "hurry things along" by getting in touch with you and telling you to contact us on their behalf. You should always inform the caller of our details and have them contact us. Here is an example of the problems that can arise if you allow yourself to be used as a conduit:
Anecdote: Our client had purchased a property, and the deposit was held in trust by the real estate agent. The real estate was keen to have the deposit released to the vendor so that he could deduct his commission from it. As lawyer for the purchaser, it is our responsibility to ensure that certain checks and enquiries were completed before allowing the deposit to be released, including having the vendor's lawyers provide confirmation from the vendor's bank that the amount owing on the vendor's mortgage was sufficient to discharge the vendor's mortgage.
The impatient real estate agent contacted our client, and told the client that he should authorise the release of the deposit immediately, otherwise the vendor would cancel the contract. The client did not realise that the real estate agent had lied to him, and that neither the vendor nor the vendor's lawyer were aware of what the real estate agent was doing.
The purchaser became upset, and contacted us urgently to tell us that the vendor was attempting to cancel the contract unless the deposit was immediately released. We knew that the vendor could not do this, but we were forced to write to the vendor's lawyers and to spend unnecessary time and effort in sorting out a dispute that should never have arisen.
Had our client simply told the real estate agent to contact us, the matter could have been properly dealt with quickly and decisively, and without any cost or inconvenience to the client.
Of course, some things are beyond your control. Mistakes, whether they are made by you, your bank or the real estate agent, can generate costs if we have to spend time and effort to put them right. We will do what we can to minimise your incurring additional costs, including:
- Specifying a fixed fee that is less than the total aggregated scale costs applicable to a task.
- Being pro-active, anticipating problems before they arise, and taking action to prevent problems.
- Ensuring that you are able to obtain plenty of information via our website.
- Providing you with cost-free options wherever possible.
- Advising you when it is appropriate for us to require another party to bear the additional costs.
Do other law firms and conveyancing businesses charge additional costs?
Yes, but it is interesting to the note the different ways additional costs are handled by law firms and licensed conveyancers.
Licensed Conveyancers
Licensed conveyancers are restricted to performing basic conveyancing tasks only, and if a client requires services that are beyond the scope of basic conveyancing work, the conveyancer has two choices:
- End the relationship with the client and refer the client to a qualified lawyer on the basis that the matter is beyond the competence of the conveyancer; or
- Charge additional costs if the requested services do not involve legal expertise beyond the capacity of the conveyancer.
There is no scale of costs for licensed conveyancers and so they can charge whatever amount they please. The only restriction on the opportunity for licensed conveyancers to charge unfair costs is the fact that they cannot charge for legal work that is not within the definition of "conveyancing work".
Lawyers
Lawyers are not restricted on the legal work they can perform for a client. This means that a lawyer's client can request legal advice on criminal deception, family law implications, and a host of other legal issues that can arise in the context of a conveyancing transaction. These are in addition to the common problems that can derail a conveyancing transaction and result in additional costs, such as a "crashed settlement" or issues arising during post contract negotiations or disputes.
Unlike licensed conveyancers, lawyers are provided with guidance in the setting of reasonable costs by the Practitioner Remuneration Order. This is discussed further below.
Can I be charged additional costs because of problems caused by other parties?
Yes. We do not charge our costs according to which party or other is to blame for problems that result in additional costs. This is because we have been contracted by you to provide the legal services you require to complete your conveyancing transaction, and all services we provide are at your instruction and at your cost. Also, it can be extremely difficult to apportion blame in any meaningful way.
For example:
If you are selling real estate and the purchaser of your property is granted a number of finance approval extensions (see our "Subject To Finance FAQ" section), only to eventually cancel the contract because their bank has not had sufficient time to approve finance, you will be responsible for the payment of any additional costs incurred by the seeking and granting of numerous finance approval extensions. Who should be regarded as responsible for the additional costs generated in such circumstances? Should it be:
- The purchaser, because the purchaser has wasted everyone's time?
- The purchaser's bank, because the bank took too long to approve finance?
- The real estate agent for preparing the contract with too short a finance approval period?
- You, because you signed the contract to accept the terms on which the purchaser bought the property?
If you have incurred costs because of your bank's failure to provide proper service it may be possible to recover your loss from the bank. However, banks are notorious for refusing to accept responsibility for the problems they create.
If someone on the other side of the transaction is responsible, you may be able to claim costs as the result of a breach of the contract or by a negotiated agreement. To do this, you would have to be in a position to demonstrate that the other party was contractually responsible for your loss, and that you are entitled to claim from them.
Can I recover my costs from other parties if they have caused me to incur them?
In some cases, claiming costs from the party at fault is quite easy. For example, if you are selling, and the purchaser fails to settle on the appointed settlement day, it is quite easy to insist that they pay the costs you have incurred as the result of their failure settle. This is because there has been a very obvious breach of the contract.
However, there are few other situations where the blame for causing loss is so easy to demonstrate.
In most cases you will be advised to instruct us to insist that your costs be reimbursed, but if the other party refuses to co-operate you will be advised not to pursue the matter. This is because the cost of court action to recover legal costs is invariably more expensive that the costs pursued, and the court may not allow you to claim the legal costs associated with the pursuit of the claim.
Will I be told in advance that an additional cost will be payable?
In many cases we will be in a position to to advise you of certain options. For example, you may be purchasing a property and the vendor wants to vary the contract to bring settlement forward. We will advise you of the cost associated with this, and ask you if you are prepared to bear the cost of the variation, or have us inform the vendor that they will have to bear the cost.
In situations of urgency, where prompt and decisive action is needed to protect your interests, we may take action without informing you of the costs applicable. For example, we were acting for a client who have purchased a property, and we discovered that the real estate agent has improperly sold the property to someone else without our client's knowledge. We immediately arranged for a caveat to be lodged over the property without discussing the matter with our client, because the urgency of the situation required us to act immediately.
In most cases, however, we will assume that you are aware that your instructions to us will generate additional costs, and that you expect to be invoiced. This assumption is based on the Costs Disclosure Statement you received at the beginning of the transaction and the Costs Agreement you have signed. It is also based on our policy of directing you to relevant FAQ sections of our website by including the "What Happens Next" section in each letter we sent to you as the conveyancing transaction progresses.
Why can't you charge one big fixed-fee that covers every possibility?
There are so many possibilities associated with a conveyancing transaction that a single fixed-fee to cover all eventualities would be prohibitively expensive. It would also be unfair to consumers, as a client who allows a standard conveyancing matter to remain standard would pay much more than they should, as compared with a client who generates large amounts of work by seeking changes and variations after the day of sale.
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