Who Pays Solicitor Fees When Buyer Pulls Out

At Lillian Purge, we specialise in SEO for Solicitors. Discover who pays solicitor fees when a buyer pulls out of a transaction.

At Lillian Purge, we specialise in SEO for solicitors, helping law firms reach more clients and explain complex legal issues through clear, informative online content. One common question during property transactions is, “Who pays the solicitor fees if the buyer pulls out?” When a sale falls through, it can cause financial stress and confusion for both parties. Understanding what costs are still owed and who is responsible for paying them helps clarify an already frustrating situation.

The Legal Position Before Exchange of Contracts

In England and Wales, property transactions are not legally binding until contracts are exchanged. This means that either the buyer or seller can withdraw from the transaction at any time before exchange without facing legal penalties.

However, while there are no legal damages payable for pulling out, each party may still have incurred costs along the way. These can include:

• Solicitor or conveyancing fees for legal work completed so far.

• Surveyor or valuation fees.

• Mortgage arrangement or broker fees.

• Search and local authority fees.

If the buyer withdraws before exchange, they usually remain responsible for their own costs, including solicitor fees. The seller, on the other hand, will have to pay for any work their solicitor has carried out, even if the sale doesn’t proceed.

When the Buyer Pulls Out

If a buyer decides to pull out of a property purchase before contracts are exchanged, the seller cannot claim compensation or force the buyer to cover their legal fees. The buyer is not legally obligated to pay the seller’s solicitor or estate agent.

However, the buyer will still need to pay their own solicitor for any work already done. This includes:

• Reviewing draft contracts.

• Carrying out property searches.

• Providing legal advice or preparing documents.

• Communicating with the seller’s solicitor.

Even if the transaction doesn’t complete, the solicitor has provided professional services and is entitled to be paid for that time.

What Happens to Search Fees

In most cases, property searches are non-refundable. If the buyer’s solicitor has already paid local authorities or environmental agencies for search results, these costs cannot usually be recovered.

Some solicitors offer “no move, no fee” conveyancing packages, which protect buyers from paying legal fees if the purchase falls through. However, these arrangements usually still exclude third-party disbursements like searches or survey costs.

When the Seller Incurred Costs

If the buyer pulls out, the seller may lose money they’ve already spent on their own solicitor’s work or other related costs. This can include:

• Drafting and reviewing contracts.

• Responding to buyer enquiries.

• Providing property information forms.

• Liaising with the estate agent.

Unfortunately, sellers usually have to cover their own solicitor’s fees in these situations. Unless contracts have been exchanged, the seller cannot recover these costs from the buyer, no matter how advanced the sale was.

If the Buyer Pulls Out After Exchange

The situation changes significantly after exchange of contracts. Once exchange takes place, the agreement is legally binding. If the buyer then pulls out, they are in breach of contract and could face financial penalties.

Typically, the buyer would lose their deposit—normally 10% of the property price—and may also be liable for the seller’s additional costs, such as:

• Legal fees for re-drafting contracts.

• Estate agent fees for re-marketing the property.

• Any difference if the property later sells for a lower price.

The seller may also pursue legal action to recover these losses if necessary.

Why Buyers Sometimes Withdraw

There are several reasons why buyers pull out of property transactions, and not all involve negligence or bad faith. Common causes include:

• Problems revealed in surveys, such as structural defects.

• Mortgage application issues or funding delays.

• Chain collapses if another sale falls through.

• Personal circumstances changing, such as job loss or relationship breakdown.

• Delays in the conveyancing process leading to missed deadlines.

While frustrating for sellers, these situations are often unavoidable. Solicitors can help both sides navigate the process professionally and minimise financial loss.

How Solicitors Manage Fees in These Situations

Solicitors and conveyancers are required to set out their fee structures clearly in their engagement letters. This document should explain how charges are handled if the transaction does not proceed.

In most cases, clients will be billed for the work completed up to the point of withdrawal. For example, if a buyer’s solicitor has completed searches but not yet reached exchange, they may charge a proportionate fee for time spent and any disbursements already paid.

Some firms offer fixed-fee conveyancing where a set amount is charged regardless of the outcome, while others charge hourly. Buyers and sellers should check the terms carefully before instructing a solicitor.

Options for Minimising Financial Loss

Although pulling out of a property purchase can be costly, there are a few ways to reduce the impact:

1. Choose a solicitor that offers a “no move, no fee” arrangement if available.

2. Avoid ordering searches until you’re confident the transaction will progress.

3. Maintain regular communication with your solicitor and estate agent to prevent delays.

4. Keep finances and paperwork in order to minimise the risk of complications.

These steps can’t guarantee completion, but they can help avoid unnecessary losses if the sale falls through.

If You’re the Seller

For sellers, it’s frustrating when a buyer withdraws after weeks of preparation. Although there’s usually no legal recourse before exchange, some sellers request that buyers provide a “holding deposit” to show commitment. However, these arrangements must be handled carefully, as they’re not legally binding unless specified in writing.

The best protection for sellers is working with a proactive solicitor who keeps the transaction on track, addresses issues quickly, and ensures all documentation is prepared early.

When to Seek Legal Advice

If a sale falls through and there is disagreement about fees, you can ask your solicitor for an itemised bill to understand what work has been done and what charges apply.

If you believe you’ve been overcharged or have a complaint, you can raise the issue through the solicitor’s internal complaints process or seek guidance from the Legal Ombudsman.

Final Thoughts

When a buyer pulls out, both parties often face disappointment and financial loss. While the law does not usually require one side to cover the other’s solicitor fees before exchange, understanding who pays what helps avoid confusion.

Buyers are generally responsible for their own solicitor’s costs and any non-refundable disbursements, while sellers must cover their own legal expenses unless the buyer breaches contract after exchange.

At Lillian Purge, we help solicitors explain these processes clearly through strategic SEO content that builds trust and educates potential clients.

If your firm wants to attract more conveyancing clients and improve visibility online, get in touch today.

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