What is "no sale no fee"?
The conveyancing cost has two components: legal fees and disbursement cost. No sale no fee is a type of arrangement that some conveyancers who will not charge you their legal fees if the sale is not completed.
How does no sale no fee work?
When the parties have exchanged contracts, they become legally bound to carry through the transaction. However, exchanging of contracts happens in the latter part of the conveyancing process, and at any point prior to exchange of contract, either party may back out of the deal.
In such situations, you may find yourself having to pay hefty legal fees even though your deal is not going through. However, if you have hired a solicitor or a licensed conveyancer who offers no sale no fee arrangement, then you will not have to pay any legal fees.
What could cause a transaction to fall through?
- A break in property chain – property chains can be complicated. If at any point any one person in the chain backs out of his transaction, it will directly affect you and your sale or purchase will also fall through. If you want to know more about property chains, please see our article on this subject.
- Gazumping – This is when the seller accepts a better offer even though they have accepted a lower one earlier. Though this is perfectly legal, it can cause the transaction to fall through. To know more about gazumping please see our article.
- A bad survey – quite often than not people do actually back out when they learn that the property they were interested in suffers from legal defects. If you have gotten a bad survey, here is what you need to know.
You will still have to pay some amount
However, if you use services of a solicitor or licensed conveyancer who offers no sale no fee arrangement, though you will be required to pay a small initial deposit (which may be subject to surrender if the deal does not go through) and you will not be charged legal fees if the transaction falls through. Therefore, talk to your solicitor or licensed conveyancer and fully understand the terms he is offering his services on.
Is it cheaper than going to a regular solicitor or licensed conveyancer?
Online conveyancers are more likely to offer no sale no fee services, which means that online conveyancing may tend to be cheaper as compared to conventional conveyancing. However, it should be noted that even if you have procured the services of a solicitor or licensed conveyancer who offers this arrangement, you will not be completely absolved from paying the solicitor or licensed conveyancer. You will still be liable to pay the other components of the conveyancing costs (i.e. disbursement costs) and cover the expenses of the solicitor or licensed conveyancer.
Please note that the information provided on this page:
- Does not provide a complete or authoritative statement of the law;
- Does not constitute legal advice by Net Lawman;
- Does not create a contractual relationship;
- Does not form part of any other advice, whether paid or free.
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