Who Pays Solicitor Fees When Buyer Pulls Out

One of the most stressful parts of selling a house is the uncertainty of whether a buyer will proceed to completion. Even after an offer is accepted, there is always a risk that the buyer may pull out before contracts are exchanged. When this happens, sellers are left not only with disappointment but also with questions about costs. A common concern is who pays solicitor fees when the buyer pulls out and whether the seller can recover any money already spent on legal work.

The Role of Solicitors Before Exchange

Until contracts are exchanged, either party can withdraw from the transaction without legal penalty. During this period, solicitors on both sides will already have carried out work. For the seller’s solicitor, this often includes preparing the draft contract, reviewing title documents, drafting forms and liaising with the buyer’s solicitor. All of this is time recorded and billed, regardless of whether the sale completes. Because solicitors charge for the work they do rather than the outcome of the transaction, sellers are responsible for paying the fees their solicitor has incurred up to the point where the buyer pulls out.

Why Buyers Can Withdraw Without Penalty

In England and Wales, property transactions only become legally binding once contracts are exchanged. This means that before exchange, the buyer is free to walk away, often due to survey results, difficulties with a mortgage, or simply a change of circumstances. Although this can feel unfair to sellers who may already have invested time and money, the law is designed to ensure both parties have a fair opportunity to withdraw until they are ready to make a binding commitment.

Who Pays the Solicitor Fees

If the buyer pulls out before exchange, the seller must pay their own solicitor’s fees for work completed so far. The buyer is not responsible for covering these costs, even if they caused the collapse of the sale. Similarly, the buyer will also owe their own solicitor fees for the work carried out on their behalf, such as conducting searches and reviewing the contract. Each party covers their own costs up until the point the transaction falls through.

Managing the Risk of Wasted Costs

Although it is frustrating to lose money when a buyer pulls out, there are ways to reduce the impact. Some solicitors offer “no sale, no fee” conveyancing, where fees are only payable if the sale goes through. However, even with this arrangement, you may still have to pay for disbursements such as searches or third-party costs. Sellers should also discuss fee structures with their solicitor at the outset so they understand what charges will apply if the transaction does not complete.

Conclusion

When a buyer pulls out before contracts are exchanged, the seller must cover their own solicitor fees for work done up to that point. Buyers are not required to reimburse sellers for these costs, as both sides are liable for their own legal expenses. While this can feel unfair, it is a standard feature of the English and Welsh property system. Being aware of this risk from the outset and discussing fee options with your solicitor can help sellers plan for the possibility and reduce the financial impact.