QLD Conveyancer's misleading quote & online offer?

[Hmm2000]

Hi everyone

Sorry. No idea which forum this fits in. I'm abit lost and not in a good headspace. Hoping to get some ideas/ guidance.

This is my first time trying to buy a home. I recently made my first ever offer on a place (it was close to a hospital - which I need as I have ongoing medical issues). I went with one conveyancer after getting a lot of quotes and things.

I would not have engaged their services had I known what I know now.

Their free quote was misleading as it did not provide a hint that there was anything other than a 'flat fee' - there were no conditions/ contingencies/ additional fees/ charges outlined for their conveyancing service in the quote. (They gave the quote in February 2020 and confirmed the amount of the flat fee in early July 2020.)

They also had a website offer that said, 'Our fixed-fees also include a life-time of free initial advice on any subsequent sale, purchase, or mortgage of property by you or your immediate family… a valuable benefit which you can use at any time.'

I was enticed by the quote and free advice offer on their website. And now I have a legal bill of $220, no house (they were going to charge me double for trying to negotiate the purchase price!) and feeling deceived because I took the information they provided at the beginning at face value.

I have no problems with legal fees. BUT they should tell prospective clients about any costs and limitations, etc, BEFORE clients come on.

I am concerned that prospective clients are not being informed of the additional charges and fees BEFORE they engage this group's conveyancing services.

I raised my concerns with them via email on 10 July 2020 and asked for a complaints reference number/ more information on their complaints handling process. I haven't heard back yet.

I'll give them a week and then try to follow-up.

Is it common in conveyancing for them to not be upfront about their costs/ fees/ charges/ conditions/ contingencies??

When they sprang the $220 on me I initially thought it was to do with preliminary title searches, as someone suggested. But then they clarified they hadn't done any preliminary searches at all, it was to do with email communications (I relied on their offer and kind of assumed they'd let clients know if/ when the 'free' part was about to end/ only applied to say first three emails, or something?!!).

I'm still bill-shocked. I haven't even dropped into their office branch to sign forms or get any paperwork (it was suppose to happen on 8 July 2020, but they cancelled it as I had my BPI report which came back with heaps of problems at that stage).

Any help/ ideas would be gratefully received!!

 

[Rob Legat - SBPL]

It's important to first note that you're dealing with a law firm - all 'conveyancers' in Queensland must be attached to a law firm. It is illegal for paid conveyancing work to be done otherwise, and the work must be supervised by a solicitor. It is also relevant to understand that residential conveyancing work is very competitive and margins are low. It's also traditionally an area of high claim amounts when things go wrong. Many firms run their conveyancing 'lean and mean' as the only way to make a dollar.

You haven't stated what they've charged the $220 for, but I'm guessing it is an 'initial advice' of sorts (and will comment on that basis, unless you indicate otherwise). Since you discuss 'negotiating price' it's pretty clear there is no signed contract yet. In Queensland, solicitors usually don't get involved until the contract is signed by the parties; with the real estate agent preparing the contract (and disclosure statement if a strata lot). On occasion I'm asked by clients to prepare the contract, especially if it is by agreement without an agent, and on those occasions I charge extra.

They do not usually get involved in price negotiation either. While there is no bar to them doing so, it will be considered an 'extra'. There is a list of things that are not generally covered in conveyancing work in Queensland or which comprise 'extra work'. Some things are excluded due to liability - our professional indemnity insurer puts out a list we use.

That being said, there's two issues which I think are relevant:
1. The offer of 'free advice'; and
2. The cost of that initial advice.

It's hard to be certain without knowing the exact terms of the quote you were given. However, going off the quote you provided from their website, it does say "life time of free initial advice on any subsequent sale, purchase, or mortgage....". That would imply you pay for the first one, and it's the ones that come after which are free.

In terms of the $220 charged, there are three valid ways that a lawyer can charge you (this applies to amounts less than $1,500):
- Based on a written costs agreement;
- Pursuant to an applicable scale (there is none for conveyancing); or
- On an assessment made pursuant to the Legal Profession Act.

What constitutes a written costs agreement is pretty basic: be between the law practice and the client, clearly state it is an offer to enter into a costs agreement, and set out how it can be accepted. Acceptance can be by way of conduct, such as providing further instructions after receiving the agreement. I'd suggest carefully looking at what you have been given to see if you've been given a costs agreement and not realised it.

If you haven't received one, and are not happy to pay it (after consideration of the above points), simply ask them for a copy of your costs agreement and see what comes back.

 

[Hmm2000]

Hey Rob

Thank You for your detailed reply and explanations.

Sorry about the download (really stressing and frustrating)! If only your information was available to me before all this!! (I read alot of first home buyer websites/ Google reviews to get some pointers, but none of them said conveyancers don't do negotiations, or to be careful when getting quotes and not to rely on them, etc).

MORE BACKGROUND
The contract between the buyer (me) and seller was signed by the time this conveyancer came on. The real estate (RE) agent group were really on-the-ball and kind (I have various limitations with my medical and IT situation and they worked with me). The RE group helped pass on my offer and counter-offer before we signed the most recent offer. I feel really bad I couldn't close the sale for the RE group, but the BPI listed too many issues that I can't address with my resources and the price point being what it was on the contract.

1. THE OFFER OF 'FREE ADVICE'
I clarified the $220 was for email communications/ 'advice'/ their time or replies.

The conveyancer kinda implied it would cost heaps more if I keep raising my concerns.

I fell into the offer limits of 'subsequent sale, purchase, or mortgage..' because my immediate family (parent) had used their conveyancing services a few years ago.

Like I told the conveyancer on 9 July 2020, I have no problems with legal fees as such:
"[they] may charge for their services, my issue isn't with that. BUT they should tell prospective clients about any costs and limitations, etc, and explain any conditions BEFORE clients come on. For example, people who offer free consult should quantify it by saying they may offer the first 30 minutes free but charge for their time after that. [Businesses] should tell people about costs and provide the best possible information so people can make an informed choice about coming on or not."

It would have been good if this conveyancer either gave a warning ('hey, just a quick email to let you know we charge after the third email/ question at $X per minute')/ sought client consent/ have upfront disclosure in their quote or offer/ have cost agreement signed so clients are clear about what they are in for and make informed decisions.


THE COST OF ADVICE
I was only informed of the $220-440 fee if the property purchase isn't successful AFTER I sent my signed contract to them. I was told this via email in the midst of negotiations with the sellers, when I was feeling vulnerable, needed support/ advice, and didn't know what to do after a bad BPI report (I really, really wanted this property and I was shocked as I wasn't told before this that they don't negotiate, etc, *sigh*).

I can confirm I didn't sign anything with this conveyancer group. (I was supposed to drop into their branch on 8 July 2020 to sign forms and get paperwork, but they cancelled it as I had the BPI report back before then).

Definitely no written cost agreement (and they didn't reply when I asked if they had any information/ evidence I was provided with information about their conditions/ contingencies/ additional fees and charges BEFORE I engaged their services).

I got their quote back February 2020 in anticipation I was home-hunting, and in early July 2020 when I reaffirmed I need face-to-face and paperwork. I'm very old-school, the other conveyancer I initially nominated couldn't do face-to-face as their office policy changed after COVID, so I changed conveyancer.

Not sure about an assessment made pursuant to the Legal Profession Act. Like I said, my issue isn't with legal costs, just that it was not given in an upfront and honest manner and that the threat of it going up and up if I wanted to negotiate to reduce the purchase price of the forever home kinda killed the whole buying process, as I don't (and still don't) know what I was in for costs and process-wise. I felt the whole how-much-we-charge-per-work-item-or-time-allotment should've been made apparent to prospective clients from the get-go.

Am I being unfair in saying these things should be made clear before prospective clients come on board? Genuine question, I'm not usually aware when I'm being unreasonable.

Thanks v much Rob. Much appreciated. I will ask for a copy of costs agreement/ anything else they think applies in my follow-up email (I suspect they won't reply to my request for a complaint reference number/ further information given no email so far!). Will see what comes back!!

 

[Hmm2000]

This is the email trail with the conveyancer's quote and my request for paperwork (reason I switched from the other conveyancer given the recent COVID no-face-to-face office policy in COVID times). The names and emails are blanked out.

***Note: I use a free email account from an international platform, so the date and time stamps use US time. So may or may not skew some of the dates of emails here.***

There were no attachments or anything else to the emails. This is why I believe I wasn't told or alerted to any additional fees/ charges/ conditions/ contingencies. The conveyancer hasn't come back with any further information/ evidence that they gave me a heads-up on the fees and charges yet.

"-----Original Message-----
From: XXXMEXXX
Date: 07/01/2020 07:08 PM
To: XXXConveyancer emailXXX;
CC: XXXMEXXX
Subject: RE: free quote for conveyancing please?

U r awesome XXXConveyancerXXXX - will send contract from another account (that account is nearly full, hence this one!!)

L

-----Original Message-----
From: XXXConveyancer emailXXX
Date: 07/01/2020 04:13 AM
To: XXXMEXXX
Subject: RE: free quote for conveyancing please?

Hi XXXMEXXX,



The answer to your queries is ‘yes’.



After all parties have signed, please send us the Contract so we can begin to protect your rights.



Regards,



XXXConveyancer detailsXXXX


Liability limited by a scheme approved under professional standards legislation



From: XXXMEXXX
Sent: Wednesday, 1 July 2020 4:23 PM
To: XXXConveyancer emailXXX;
Subject: Re: free quote for conveyancing please?
Importance: High



Hey XXXConveyancerXXXX and team

Could i please confirm the quoted price for conveyancing for a buyer of a residential in Brisbane is still $1,090 flat fee including GST?

Would I be able to get my paperwork from yo after you're done?? (I can pick them up, but I don't want an electronic version only, I'm a paper person, if it isn't on paper, it didn't happen!!)

And if you do paper - do I just get the agent to send the stuff to you?!

Cheers
XXXMEXXX

-----Original Message-----
From: XXXConveyancer emailXXX
Date: 02/09/2020 08:06 PM
To: XXXMEXXX
Subject: free quote for conveyancing please?

Hi XXXMEXXX,

Our fixed fees on a purchase (including searches and GST) are $1,090. After all parties have signed, please instruct the agent to forward the Contract to us so we can send you our letter outlining the steps involved.

Our fees for a Will is $185 per person. Unfortunately, we don’t handle Trusts.

Regards,

XXXConveyancer detailsXXXX

Liability limited by a scheme approved under professional standards legislation

-----Original Message-----
From: XXXMEXXX
Sent: Monday, 10 February 2020 9:43 AM
To: XXXConveyancer emailXXX ; MEXXX
Subject: Re: free quote for conveyancing please?

Hello to the XXXConveyancerXXX at XXXTHEIR BRANCHXXX

I am hoping to buy a home around Brisbane in the next two years.

I'd like to get a rough ballpark of how much conveyancing may cost at your firm?

Could I also please get a quote for how much it'd cost for:
- a family trust to be set up to put the home in (it'll be the only item in the trust for the life of the trust); and
- a will (very general).

Thanks
XXXMEXXX"

 

[Rob Legat - SBPL]

Some aspects change slightly based on your follow up information:

• It sounds like the $220 wasn’t for ‘initial’ (i.e. pre-contract) advice. Rather it appears it was for advice and file setup after receiving the contract. Conveyancing requires a lot of up-front work as soon as the contract is received to review it, map out the contract dates, get initial searches done, and provide advice on the contract terms to the client. The Queensland Conveyancing Protocol requires a lot of up front work and advice (and reading) be given to clients. It’s a big time sink for something that may not proceed. This step can take hours to perform, depending on the complexity of the contract and the nature of the property.
• I think you’re equating the ‘free initial advice’ with the ‘preliminary work done on the contract’ – they’re two separate things in my mind.
• Contracts can and do fall over for reasons beyond your, or your solicitor’s, control. It would appear their charge is to cover the work done before that point.
• All solicitors I know of have this contingency built into their costs agreements, that if the matter does not proceed to completion they’re entitled to charge for the ‘work done’. Such a charge is considered fair.
• Them not giving you a costs agreement before receiving a signed contract is neither here nor there. The first I know of a conveyance is usually when a signed contract lobs into my inbox.
• You not having signed anything with them is also not particularly relevant. A costs agreement can be accepted by conduct – such as continuing to give instructions/correspond on the matter after having received it. The key is that it must have been given and, if they're doing things the right way, it should have been one of the first things you got from them once they received the contract.

 

[Hmm2000]

Thanks Rob!!

MORE BACKGROUND INFO
There wasn't any initial searches done by these conveyancers (I asked to clarify where the $220 came from and the conveyancer just said it was due to communications/ emails!). There was no advice on the contractual terms as I had already signed the contract by that stage via the RE group and only needed the BPI to close the deal (or so I thought!!). The real estate agents had already mapped out the contract and dates and things for me before I got the conveyancers (the RE group were fantastic, couldn't have been more helpful!).

QUESTIONS:
1. So *HOW* do prospective homebuyers who are looking for conveyancers know what the costs, processes, etc, are BEFORE they choose/ commit to a conveyancer? (Genuine question as I am still looking for my forever home and don't want to be in this situation again. I was asking for quotes from different groups and looking at their google reviews as a way of vetting them. Obviously not effective! Now I'll also ask for their cost agreements BEFORE I sign on, is that right?).

2. Is it possible in future to not involve a conveyancer until AFTER the BPI? (I had good communications with the RE group, the BPI inspector and the sellers. Everyone was really helpful and were happy to work together/ share info with me. So I could have probably worked with them/ talked some more?! The sellers weren't in a hurry to sell and were very flexible working around my situation. But the sudden charge of $220 and double that if I wanted to negotiate kind of knocked me for six, and I backed right off because I wasn't sure how much I'd be up for if I tried to negotiate and failed.)

3. Do I still ask the conveyancer who charged me the $220 for their cost agreement when I chase up my previous email asking for a complaint ref no/ their complaint handling process? Or is it really a moot point at this stage? (I don't think after four days that they're going to suddenly respond to my request for complaint ref no and further info).

I appreciate from what you're saying it's standard practice that 'if the matter does not proceed to completion they’re entitled to charge for the ‘work done’.' I don't have an issue with people charging for their work. What my concern is that this charge is NOT made clear and upfront to prospective clients BEFORE they sign on. It wasn't even a hidden fee and charge, it was just no information whatsoever.

I thought I was relying on the 'offer' for free advice (they didn't tell me any different!), and I assumed that it'd be like other normal business transactions where I'd be told upfront what I'm up for and how much and when; BEFORE it happened. Bad assumption! Now I know! The legal sphere is different!

Given their speciality in conveyancing, I felt they should have been aware that termination was a possibility and alerted prospective clients like me of relevant fixed fees and charges at the beginning via a full disclosure/ cost agreement that is given to the person/(s) BEFORE any work begins; so clients can make informed decisions about which conveyancer to go with and how they communicate with the conveyancing team.

Thanks again Rob. Sorry about my silly questions!!

 

[Hmm2000]

Reading back - sorry about any 'tone' that may sound unprofessional/ 'wrong', not my intent at all. Just under alot of stress and medical situation flaring up.

*Very* grateful for your time and insights Rob!!

 

[Rob Legat - SBPL]

Re Background Info: There should have been work at least started on file. Initial searches can incorporate a whole range of things – not just what costs money. For example, I always jump on to Council’s planning maps and look at what could potentially affect the property (such as flood, bushfire, vegetation order, natural habitats). Those searches don’t cost anything to do, but they take time.

By the building and pest stage, unless very unusual time frames are involved, I would expect that you would have at least received:

• Engagement/costs letter;
• Report on the contract;
• Information booklet about residential conveyancing;
• ‘To do’ list;
• Request for information (usually in the form of a questionnaire); and
• List of potential searches.

These things are all but mandated under the Queensland Conveyancing Protocol.

1. You ask around and get quotes, like you did. You’re entitled to ask not only what they charge, but how they charge. As with most things (non-legal included), a quote will be given for the whole job. If only part of the job is done, it is reasonably inferred that there will be a corresponding cost. Some could state what fee is for what stage, but there’s no obligation. The possibility of termination is always an option in conveyancing at any time up to and including at settlement – it’s part of the territory. Mapping out each particular ‘portion’ is completely impractical.

2. Yes, but. There’s no obligation for you to use legal representation when you buy a house. Should you use legal representation? Absolutely. That’s not just a ‘protect the lawyers’ sentiment. A house is often someone’s biggest investment in life and not something that you want to screw up. Getting the right advice can be crucial. Plus, conveyancing is very complicated unless you know what you’re doing. As for timing, I would always suggest immediately. A lot of things in conveyancing are time sensitive and you’ll need to know what is required when, and what you can do about it if you or someone else misses a date. The only way you can do that is to get advice right from the start.

3. You’re entitled to a costs agreement. Ask for it. There should be no argument from them whatsoever – and if there is, then that in itself is an ethical no no.

 

[Hmm2000]

I see. Thank You for your explanations and insights Rob!! Much appreciated.

Sorry if I sound like a grump. Ongoing medical issues. In abit of pain.

Just checked and checked again my emails (I get ALOT of spam!!).

From the conveyancer, I got a 'Letter to client acknowledging contract' that laid out the dates/ events, e.g. when I have to get deposits in. Time-frames the RE group already warned me about! I also got a OSR form (which I was going in branch to fill-out and sign on 8 July). This was after I asked the RE Group to forward them the signed contract.

I didn't get a few things on your list:
* Report on the contract - but I signed the contract before they got it so that's OK.
* Information booklet.
* Request for info (another conveyancing group had sent something like this to me when I asked after a quote, but nothing from this group. I guess some of the questions would be covered by the OSR form?!)
* List of potential searches.

In fairness to the conveyancer, it could be that they would have provided them if I attended their branch. I was going to do some face-to-face to sign the forms and get my paperwork, etc (much less cross-signals for me that way). But my slot on 8 July got cancelled by the conveyancers after the problematic BPI report landed. And like you quite rightly point out, there's probably alot of stuff below the surface they did that wasn't conveyed when they lobbed the $220 charge.

I'll follow up with a request for the costs agreement from the conveyancer and see what they say!

RE: your good advice on point 2: I agree that this is the biggest purchase of a lifetime and should have all relevant advice/ support. I guess I was pretty excited and really comfortable with the RE group and the sellers. They were honest, kind, and really went way above and beyond. So I feel really bad not to be able to close - for more reasons than just my own well-being and happiness in getting a place close to the hospital! I really, really wanted to pay the sellers and for this RE group to get their fees!! Kindness and good deeds should always be be rewarded monetarily.

As you can tell, I'm really worried about legal fees associated with home purchases. My recent experience indicates I could be up for several more lots of "who-knows-how-much?" conveyancing fees/ charges that go nowhere due to bad BPI reports, etc (the area near the hospital have old houses, and alot of rentals). *Unless* I find a QLD group that does face-to-face & paperwork during COVID (always get paperwork!), but won't charge until the home purchase/ contract is closed! (yeah, right: unicorn!)

***Whatever I do, I'll make sure from now on I ask conveyancers I'm looking to engage:
a. What kinds of quote/ charges/ fees/ costs I'm looking at roughly.
b. *HOW/ WHEN* they generally charge it.
c. What costs/ fees/ charges are incurred if the contract terminates for any reason.

Just rough figures. Not trying to be difficult or pedantic, but I don't deal well with surprises. Esp to do with money.

I'll make sure I raise this in appropriate homebuyer forums so other newbies won't be caught out like I was (or maybe they have enough money not to mind/care?! dunno! But just in case some are as skint as I am!)

Again, thanks and sorry about picking your brains. Just trying to nut out what the actual business practice/(s) are/ should be in the legal sector. And what my options going forward are to avoid this situation and minimise any costs that don't result in me being in my forever home.

 

[Hmm2000]

Just an update:
No response from the conveyancer. No 'costs agreement'. Nothing.

Arrrrrggghh!!!