Big variation in quake buyout legal fees

Posted 07 Oct 2011 by MediaStuff Popular
This item was posted on the Stuff.co.nz website - click here to view the original

 

Fees being charged for legal work on the Government's buyout of properties in Christchurch's residential red zone vary widely, a survey shows.

Advocacy group CanCERN last week published on its website the fees 20 Christchurch firms were charging the owners of red-zoned properties for conveyance work on the buyout offers.

Rates of those surveyed ranged between $750 and $2200 for mortgaged properties.

CanCERN spokesman Brian Parker said the list was compiled after the group was alerted by residents to the disparity in fees.

"It was just to present something for the residents to say, `Here is the range; it's not indicative of the quality of the work, but it's the range you need to be aware of'," he said.

Some firms suggested to those conducting the survey that they had increased their fees to maximise the Government's contribution of up to $750 towards legal costs.

"A couple said directly, `We've adjusted our fees directly to get maximum out of the subsidy from the Government', which was very interesting," Parker said.

"On the other end of the spectrum, a couple of the lawyers came out and said, `We want to keep our fees as low as possible because we feel it's our contribution to the recovery effort'."

Law Society property spokesman Lindsay Lloyd, a partner at Christchurch's MDS Law, said he would be "very surprised" if solicitors raised their fees to claim the maximum subsidy.

It was likely the information given to CanCERN had been misunderstood, he said.

"I suspect the comment may have been that they feel a little more comfortable about charging a job what the fee is worth if there is a contribution from the Government, which is an entirely different take on things," Lloyd said.

Lawyers had undertaken a lot of pro bono work since the earthquakes, but still had costs to meet, he said.

"You get a call from distressed people and you're trying to help them out, and you're always conscious of the bill you send out."

Lloyd's firm was mid-table with fees of $1450.

Joynt Anderson was listed as having the lowest fees on CanCERN's site, charging $750 for a mortgaged property.

Partner Graeme Smith said that figure was for a standard property sale only.

"With the red-zone sales, because of the extra work involved in the lead-up to the agreement being signed, we're telling people that we estimate our fee on a sale-and-purchase agreement will be an additional $500," he said.

"We're looking at about $1100 to $1250 – about somewhere in the middle [of the list], I would think."

Harmans Lawyers topped the list with fees between $1800 and $2200.

His firm was "really transparent" about the costs that could be expected. "It's not straightforward processing when you're doing this work," Selwyn said.Partner Brent Selwyn said he had been told some rates CanCERN listed did not include work on red-zone properties.

- The Press

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