Stamp Duty Nightmares and Other Conveyancing Horror Stories
- AuthorPaul Hajek
Some Conveyancing Law Firms have been letting their clients down when it comes to Stamp Duty.
Letting them down badly. Very badly.
And who says so? None other than the Legal Ombudsman - the man who is the last resort for law firm complaints.
The Legal Ombudsman has just issued a report on complaints received against Conveyancing Solicitors and Licensed Conveyancers involving the payment, or rather non payment, of Stamp Duty Land Tax.
And, understandably he’s not very happy.
Why Should Non Payment of Stamp Duty Concern You?
You may not be aware that, although you entrust your Conveyancing Solicitor to make the Stamp Duty payment on your behalf, they have no legal responsibility to do so. So the responsibility for paying the Taxman the correct amount of Stamp Duty lies with you.
This means that should the payment not make it to HM Revenue & Customs, you will be held liable for the full amount, as well as any interest and associated fines. The first you would know about it is when HMRC contact you requesting payment. This could happen months or years after the purchase of your property.
What Has Been Happening with Non Payment of Stamp Duty?
The Ombudsman has identified three main areas where problems have arisen:
3. Bad Luck
1. Fraud by Conveyancing Law Firms
Thankfully rare, but, very worrying nonetheless.
A few Law Firms (no longer in business) misstated the actual amount of Stamp Duty payable to HM Customs & Excise, by declaring an incorrect purchase price, and pocketed the difference.
There has been an upsurge in Conveyancing transactions over the last twelve months.
Simply, some law firms have taken on more business than they can cope with and forgotten to pay the Stamp Duty.
No names, no pack drill, but I would point a finger at the Cheap as Chips Conveyancing firms which are still allowed to quote ridiculously low fees to ensnare you in their net.
Some poor unfortunate homebuyers have had the misfortune to choose a Conveyancing Law firm which has gone out of business and not been able to complete the payment of the Stamp Duty. Have I mentioned the Cheap as Chips Conveyancing brigade before?
It is important to stress that the homebuyers concerned have had happy endings in that they have had the money and interest paid by either Insurers or the Compensation Fund and firms still in business have had to pay compensation as well.
Suffice it to say they all could have done without the aggravation and worry.
What Can You Do To Ensure It Doesn’t Happen To You
In the report the Legal Ombudsman gives a few tips and hints to help you avoid such a problem:
- Try to avoid any nasty surprises - find out from your solicitor at the start how much stamp duty you’ll need to pay. Double check it yourself (we have a nifty online conveyancing calculator you can use!) Don’t assume they’ve paid it. Check.
- Get confirmation that the amount has been paid – solicitors have 30 days from completion to pay the Stamp Duty, other wise YOU pay a penalty.
We have also some advice of own which may help you:
- Avoid low cost conveyancing options – competence comes at a price. Don’t skimp. Moving house is such a massive undertaking, why would you consider cheap rate conveyancers?
- Look for the Conveyancing Quality Scheme – a conveyancing mark of quality. We have explained the benefits for you of CQS in a previous blog. Click here to read it.
- Most good conveyancing firms will send you details of the completion of your registration and confirmation of stamp duty payment within the 30 day time frame. If they don’t mention this during the process, ask for this to happen and make a quick call to your solicitor to check everything is finished.
If you are thinking of moving soon and would like help budgeting for your move, click below to access our free Conveyancing Calculator. The bad news is the amount you’ll pay in Stamp Duty (ouch again!). The good news is you’ll know it will be paid!
You can access the Legal Ombudsman Stamp Duty full report here.