What are disbursements? And how do they affect the legal cost?
When you receive a quote from a conveyancing firm to look after the legal aspects of the sale or purchase of a property, you should scrutinise the items listed within it to ensure you understand what the service is being provided, what it is costing you, and why.
While it’s a practice that is generally dying out, some firms like to draw you in with a cheap headline quote, which then expands when you’ve signed on the dotted line to procure their services. If this happens, you’ll find that the whole bill is probably far more than you anticipated.
Best Value Conveyancing won’t do that: their quote is exactly what you’ll pay and there won’t be any hidden costs in the small print, lurking there to take you by surprise once you’ve exchanged and completed contracts.
So, you might think, there is something underhand going on when you spot the items highlighted on the quote as ‘disbursements’.
But this certainly isn’t the case!
What are disbursements?
The term ‘disbursement’ refers to any third-party cost paid to other companies that is incurred as part of the sale or purchase of a property that is fed through your solicitor’s office.
It is not an item that your solicitor can control from a financial standpoint, but it is something that you will have to pay as part of your transaction, regardless of which legal firm you employ.
When the cost is incurred, the payment is fed through the solicitor’s office rather than being sent directly to you. This arrangement is for convenience since it is the solicitor who will order the third-party service on your behalf.
There is a wide variety of disbursements, some of which are optional (for example, a more detailed analysis of the structure or environment to assess the impact of purchasing a property).
The common disbursements include:
- Local Authority Searches – your solicitor will order these searches from the council or local authority to ascertain information on current road and infrastructure projects near to the property you wish to purchase, any planning applications that might have an impact, the existing development restrictions (for example, conservation area requirements), and known land contamination (e.g. from current or prior industrial use in the vicinity).
- Environmental Search – your solicitor will order this search to establish the current and historical position on flooding, landslides, contamination and subsidence within the vicinity of the property.
- Water and Drainage Search – this search is ordered from the company that manages the water and sewage for the building, the process of which verifies how the services operate at the property, how they are charged and the location of the piping and sewers into the home.
- Land Registry Fees – whenever a property changes hands, the transfer of its ownership (or conveyance of the deeds) must be registered with HM Land Registry and incurs a charge to do so.
- Bankruptcy Search – if you are purchasing a property with a mortgage, your solicitor will request a bankruptcy search on all the persons named on the mortgage to verify that none is currently registered as bankrupt.
- Bank Transfer Fee – banks will incur a fee to transfer the sums of money involved between mortgage lenders, seller’s bank and buyer’s bank.
The way that you are purchasing or selling your property will have an impact to on any extra disbursements that might be added (or expanded). For example, there are different costs if you are looking at leasehold or freehold properties, or if you’re buying as a group or as an individual.
Your Best Value Conveyancing solicitor will keep you apprised of any additional disbursements as they arise, and will always discuss the options with you before they are ordered. Your interests are always at the centre of our conveyancing and we want to ensure that you are happy with all aspects of the service we provide.
If you have any questions – or concerns – about disbursements, or any other aspect of the conveyancing for your sale or purchase, please call us on 08000 387 007 to discuss in more detail.
