Do we still have to pay legal fees if a sale falls through?

We were about to exchange contracts but withdrew because of damp issues. Now our solicitor has billed us. We thought legal fees were not payable if we did not buy?

Question: My fiancé and I were trying to buy a house but had to pull out because our survey revealed significant damp issues and the seller would not reduce the asking price or contribute to the cost of the work to sort out the problem.

We were about to exchange contracts when we withdrew. Now, not only have we had to pay for the survey but our solicitor has billed us. We thought legal fees were not payable if we did not buy.

Answer: Some solicitors do not charge a fee if a purchase fails to complete, although they will charge for disbursements incurred, such as search fees. You need to check what you agreed with your solicitor at the outset.

Once you told him you wished him to act for you in connection with your purchase, he would have sent you a letter of engagement and would have confirmed his terms of business. You would have been asked to sign and return a copy of the letter of engagement to confirm your instructions. Your solicitor should have provided you with an estimate of his fees and if he did not intend to charge if the purchase did not complete, he would have informed you of that fact. Solicitors are under a duty to keep their clients informed and updated about costs, and overcharging a client can amount to professional misconduct.

You withdrew at the stage when you were about to exchange contracts and so your solicitor would have carried out a large part of the legal work by then. Accordingly, you may very well be charged 70-80 per cent of the fees you were quoted, as the solicitor will charge you for the work he did up to the date you withdrew.

Ask him to inform the seller's solicitor about any searches you have had done which could be used by another buyer, in the hope that you may be able to recoup some of your search costs.

If you have a question for Fiona McNulty, please email or write to Legal Solutions, Homes & Property, London Evening Standard, 2 Derry Street, W8 5EE. We regret that questions cannot be answered individually but we will try to feature them here. Fiona McNulty is a partner in the residential property, farms and estates team at Withy King LLP ( 

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