The SRAO makes several important changes to the Solicitors’ Remuneration Order 2005 which establishes the amount of fees to be paid to a lawyer for handling a property transaction.This includes sales and purchase transaction, which is mostly developers transaction and subsales. Besides that it also includes charges, debentures, and other security or financing documents and last but not least leases and tenancies.
The SRAO replaces paragraph 6 with the following
(1) A solicitor may give a discount of up to 25% on fees specified in the First and Third Schedules, except for any transaction governed by the Housing Development (Control and Licensing) Act 1966 [Act 118] or any subsidiary legislation made under that Act.
(2) No discount may be given on fees specified in the Second, Fourth, Fifth and Sixth Schedules.”
Before this a lawyer was strictly not allowed to offer discounts on the stipulated scale fees,this was based on Paragraph 6 of the old law.
The first schedule clearly states out the fees for sales and transfers, while the Third schedule lays out the fees for the charges, debentures and other security financing documents.The fees in these schedules are also increased by the SRAO. It is regarded as a move that was long time overdue.
Changes in security fees or financing documents
Charges, debentures and other security or financing documents now has a new fee, which is introduced by the SRAO. This replaces the previous Third schedule with the following
Fees that are charged under The Housing Development (Control and Licensing) Act 1996 under the old law which is maintained by the SRAO are also reduced by a percentage.Not only that there are some minor changes to the loan thresholds and purchase considerations.
Increase in fees for sales and transfers.
The SRAO introduces a new scale for fees for sales and transfers by replacing the previous First Schedule with the following:
Based on the purchase condition, the fees chargeable for transactions governed by the Housing Development (Control and Licensing) Act 1966 (essentially, the purchase of property from developers) were at a lower rate of about 65-75% of the full scale fees, The SRAO maintains these percentages, but makes some amendments to the purchase consideration thresholds.