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Unexpected transaction fees - am I being ripped off?


mrmore

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Hello,

I own an SPV company with 2 BTL through it. I am in the process of purchasing the 3rd and it is proving a nightmare. First time I am working with Aldermore as the lender.

Besides the fact that it has now taken 3 months for a mortgage offer, this situation has now happened:

I have approached a local conveyancing firm and asked if they are on the Aldermore panel for this purchase as my "usual" one isn't. They said yes. Since it's a purchase through a company, they charge a bit more. So far, nothing surprising.

Today, 4.5 months into the deal, they email me to say the have receive an email and Aldermore have in fact instructed their own solicitors and I am now liable for that 2nd solicitor's fees (sum undisclosed = who knows what it will come to) + the extra work my solicitors have to do to comply with the various questions the new solicitors want (another £350).

WTF? why is this my problem? has this happened to you before?

EDIT:

I spoke with Aldermore directly - they said that "my broker should have told me this could happen and even though they have instructed my original solicitors, they now want to further protect their interests and instructed another solicitors as well". I said that this will cost me £350 with my own solicitors + Aldermore solicitors fees and weeks more on the transaction! they didn't care...

My broker (London and country) is absolutely terrible, I can't reach them by phone, they don't answer their emails. Basically, no contact. Nonetheless, they didn't inform me on any such potential fees.

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Hi,

 

We use Aldermore and experienced this. It is much easier to use their own panel solicitor - Blacks.

 

If you read into LTD purchases they require dual representation, some for instance TMW allow the solicitor to do both regardless, Aldermore want you to use theirs. 

 

Long story short, Aldermore are good and Blacks are so just use them for both.

 

Cheers

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Thanks.

 

The thing is my solicitor has already been working on this in my behalf and their behalf and I can't simply tell them to stop (well, I can but I imagine they'll want payment for the work they have done thus far)

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Hi 

I think dual representation might be starting to become the norm. I have just remortgaged with Lendinvest and am also going through a purchase with them. They have a panel of 3 solicitors of which my usual one wasn't on. It worked out cheaper to use the lenders panel and it was them who instructed the solicitor rather than me.

17 minutes ago, mrmore said:

my solicitor has already been working on this in my behalf and their behalf and I can't simply tell them to stop (well, I can but I imagine they'll want payment for the work they have done thus far)

What have you actually paid and how much work have they actually done? Bulk of their invoice probably wont be paid until completion. They normally collect a small payment on account of a few hundred pounds at the start so you shouldnt lose out too much (hopefully).

David M Slater ACMA 

Accufy Accounting  - Proactive accounting for property investors 

0208 242 4926    info@accufy.uk

 

 

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We are at the finish line, supposed to exchange and complete this week, then this out of the blue email came with new solicitors. So, the bulk of the work has been done from my solicitor's point of view. That's probably around £1k.

I just find it very strange that I have to bear the cost of Aldermore's solicitors? that's just absurd

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10 hours ago, dennis hughes said:

Would never, ever, ever, ever, use Blacks.

 

2 houses with Aldermore so far, 2 sets of conveyancing with Blacks. Big company.

 

If you want speed and ease, and the cheapest option - use blacks when using Aldermore.

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Aldermore on a purchase has this policy "Aldermore will instruct its own Conveyancer, the applicant will be responsible for the total conveyancing costs required to undertake the mortgage transaction." 

Dual representation is not a phrase I particularly like, as it has two completely different meanings depending on the lender. Some lenders interpret dual as the same solicitor acting for both parties whilst others class it as one solicitor per party.

Every lender has its own legal panel and this may be as low as one or every solicitor in the UK, as long as they have a particular number of partners. The number on the panel is based on the lender's experience and unfortunately whilst everybody thinks the legal process is the same, it isn't. Certain documents have to be lodged at Companies House within a strict period of time otherwise there could be serious implications for the lender. Sadly from experience I've seen plenty of solicitors mess this up, hence the restricted panels.

I can only talk about what I do with my clients and other brokers I know, but the legal process is brought up before the application goes in, the choices you have and how many sets of solicitors you will have to pay for.

If you choose a solicitor on the lender's panel for a residential property on a single let then 99% of the time there will only ever be one solicitor in the transaction. If you are buying an HMO or Multi - Unit there is a greater chance of you using a restricted panel. If your preferred solicitor is not be on the lender's panel and you insist on using them two sets will be paid for.

You can see the number of permutations above so there is no answer that fits all. 

Regards Simon

Searchlight Finance Ltd

T:01565 654005

 

Landlord and specialist property finance advisor only dealing with investors, landlords and developers throughout the UK and beyond.

Buy to Let - Commercial Finance - Bridging Loans - Development Finance - HMO Finance - Refurbishment Loans - Multi Let - Limited Company - Student Lets - Portfolio Finance

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Thank you.

 

After further discussion with both the lender, my solicitors and the lender's solicitors and my broker the below is the outcome:

  1. My broker did not inform me of these extra fees because I have them if my chosen solicitors that are "on the panel". 
  2. Aldermore says that they don't actually have a panel and they use their own solicitors and my broker should have told me that I could use theirs.
  3. Aldermore's solicitors have emailed my solicitors more than a month and a half ago telling them that they will be acting on Aldermore's behalf. My solicitor only notified me yesterday. If I had known back then, perhaps I would have cut my losses at £250 and used Aldermore's solicitors instead to save time and money
  4. My solicitors informed me about a month ago that they will be acting for Aldermore

Who's bullshiting me?

It seems that my solicitors at best, lost/didn't see the email from Aldermore's solicitors or, "forgot" to tell me?

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Comment 2 is correct and as Simon stated above Aldermore require separate representation on a LTD company purchase and will have their lawyers, Blacks/Russell & Russell to represent them and make sure the bank is fully protected in the transaction. The costs of this are to be met by the borrower. 

Aldermore dont have a panel. 

3 isnt an option per the above. You cant use their lawyer to represent you in a LTD purchase. 

4 contradicts 3 - odd that your lawyer assumes they are acting for the lender if they have had correspondence from Aldermore's lawyer. They should have been in touch with you to clarify the scope of works at this stage. 

The requirement for separate representation is very typical in purchase transactions. Some lenders allow dual representation on a purchase but this is more of a rarity and where that transaction is straightforward. 

Your broker should have advised all the above. 

Bottom line here is if you continue with Aldermore you will have to accept that there are two sets of legals to cover. You are not getting ripped off. but there has been a breakdown of communication regarding the legals and relevant costs. . 

Property investor ¦ Commercial Finance Broker ¦ Ex banker with 20 years lending experience. 

Commercial Lending Manager at Real Finance Ltd - www.realfinance.co.uk
Happy to discuss any queries regarding property finance for  Company/Complex BTL, HMO, MUB, Holiday Let, Commercial, Bridging & Development.  

kirsty@realfinance.co.uk
07494949852

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  • 1 month later...

More to the point though, that doesn't using the lender solicitor represent a conflict of interest??? We currently have two properties where Aldermore are the lenders and we had hell of a time getting them over the line. We recently pulled out of a 3rd transaction with Aldermore as they suddenly insisted that I don't use my own solicitor (only for personal guarantees) but use Blacks, and at the time I wasn't happy about this as my feelings were that it represents a conflict of interest, but would be great to hear other peoples views on this?

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  • 2 weeks later...

Panel firms such as Black's have several solicitor partners.

One lawyer will be representing the bank and its interests and they would have a different lawyer within the firm represent you so that there isn't a conflict of interest.

Property investor ¦ Commercial Finance Broker ¦ Ex banker with 20 years lending experience. 

Commercial Lending Manager at Real Finance Ltd - www.realfinance.co.uk
Happy to discuss any queries regarding property finance for  Company/Complex BTL, HMO, MUB, Holiday Let, Commercial, Bridging & Development.  

kirsty@realfinance.co.uk
07494949852

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