The Legal Ombudsman and Stamp Duty Land Tax

The Legal Ombudsman (LeO) is one of the routes for redress for client of regulated legal services providers. He has recently been in the press expressing concerns about Stamp Duty Land Tax (SDLT) which is payable in many conveyancing transactions. The LeO hasn’t issued any figures so the extent of the problem isn’t clear. It seems from his examples that it mainly arises from firms which have received money to pay SDLT but have not paid it out, and have become insolvent. That’s wrong, and in some of the instances appears to have been dishonest. The LeO doesn’t deal with disciplining lawyers so we can’t link his examples with disciplinary action taken by the SRA.

The LeO has issued tips for consumers which are sensible:

1. Try and avoid any nasty surprises. Make sure you know from the start how much stamp duty you will have to pay.

H&H will tell you what you should expect to pay when you first contact us.

2. Consider getting like for like quotes.

The LeO warns against firms who charge extra for submitting the SDLT Return, he says typically £75 to £100 on top of their fees. Beware “headline” figures which have extras added.

H&H will give you an estimate for the whole job at the start.

3. Seek confirmation that your lawyer has met the 30 day deadline.

Stamp duty has to be paid within 30 days of completion; we will do that, it is part of our job. If you want us to confirm we have done it please ask and we will. Unless we have submitted the SDLT Return we cannot apply to HM Land Registry to record the transaction so if we tell you we have done that you can be sure we’ve done both.

4. Know your options if the lawyer ceases trading.

This should really be the first – put this way it is like shutting the stable door after the horse has bolted. The first principle should be “Don’t instruct someone you don’t know and trust”. Are you confident they have a good record and are secure? In case you are wondering, H&H does and is

5. Be wary of fraudulent activity.

There are a lot of new entities in the legal market, some of whom may be good, but some have new adventurous and risky business models. Are they more than just a website? We’re sticking with what we know works, looking after our clients so they come back again.

6. Avoid the temptation to cut corners.

The LeO says “be wary of any scheme offering to reduce your stamp duty liability – if it seems too good to be true it usually is.” We sometimes have to tell clients that “cunning plans” put to them by third parties will not work and may be illegal. The same advice applies to very cheap quotes for work – conveyancing factories may be able to cut their costs but at what price to you?

7. Be clear about lender or builder promotions and what they mean.

Some mortgage lenders will offer to “pay your stamp duty”. Usually, this means the lender will lend you an extra amount equivalent to the stamp duty, so you are still paying it. Similarly, a builder may offer an “allowance” against the house sale price. That’s just marketing; sadly builders don’t yet offer Buy One Get One Free!

If you want to deal with someone you can trust contact the Harris & Harris Conveyancing Department.