Lawyers say fees have not been increased after seeing off estate agents.
Fair is fouls and foul is fair. What do lawyers do when their livelihood is no longer threatened by estate agents? They raise their fees. Fees paid by buyers and mortgage borrowers to conveyancing attorneys who register sales and bonds in the deeds office – rose this month. They are between 8% and 15% higher. Law society spokesman Gustav Radloff says it is unfair to equate this rise with the Legal Practices Bill’s passage through plarliament. “The one had nothing to do with the other,” he says with regard to the fact that a clause allowing estate agents to undertake conveyancing for their clients has been dropped. The new fee structure has a wider spread between low- and high-priced properties. Properties costing less than R18 000 don’t pay more. Those costing up to R150 000 pay 8% more, while those up to R300 000 pay 10% more. The fee on a property of R1m and more is up 20%. Radloff argues that fees were raised two years ago and that the annual increase is below the inflation rate. But estate agents counter that the property boom has translated into an increase in house prices of 45% and, therefore, in lawyers’ hands. Radloff retorts that the number of transactions through the deeds office is stable, and that the profile has changed to less-profitable, low-price transactions. From April 2000 to March 2001, there were 214 000 sales at under R60 000 and only 6 400 above R1m. He also points out that legal fees account for a minuscule portion of SA’s world-beating property-transaction costs – about 1% of the transaction against 7,5% plus Vat for agent commission and up to 10% for transfer duty. “Rates are only recommended and clients are able to negotiate,” says Radloff. And this is the real problem. Ever since fixed fees were banned, conveyancing has become less profitable, mainly because large commercial clients negotiate substantial discounts. :”We rarely pay more than 50% and never more than 66% of the published fee,” says Corpcapital Bank property dealmaker Marc Wainer. Negotiating is harder for homebuyers because the seller and lender nominate the lawyer, but the buyer and borrower pay. And there is still no formal body to speak out on behalf of residential property owners. Article: Ian Fife Financial Mail - 29 March 2002 Sourced from main media sites by Robrecht Tryhou www.valuer.co.za www.valuer.co.za/newsletter site.
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