Written by Richard Wee, Wong Zi Ying and Sophia Ismail
To regulate legal fees for conveyancing matters, the Solicitors Remuneration Order 2005 was passed by the Bar Council as a guideline. This includes sale and purchase agreements transactions, lease agreements, charges, debentures, and other security of financing documents. Since then, there have been changes in rates as per The Solicitors’ Remuneration (Amendment) Order 2017 (“SRAO”) which came into effect on 15th March 2017. For this reason, it is important for clients to be up to date with the current guidelines.
We append below the fixed scale fee imposed by the SRAO, which every firm who does conveyancing is committed to adhere to. The legal fee depends on the value of the property, and the fee will be calculated on a percentage of that value. This excludes stamp duty fees.
What about discounts?
Order 6 of the Solicitors Remuneration Order 2005 (“SRO”) provides that:
(a) a solicitor may give a discount of up to 25% on fees specified in the First and Third Schedule, except for any transaction governed by the Housing Development (Control and Licensing) Act 1966 [Act 118] or any subsidiary legislations made under the Act; and
(b) no discount may be given on fees specified in the Second, Fourth, Fifth and Sixth Schedules.
Therefore, subject to the discount permitted by Order 6(1) of the SRO, a discount may be given in Sale and Purchase agreements with exceptions. However, in most conveyancing matters, it is prohibited.
For more information of the SRAO, please click the link below to the Malaysian Bar website:
Waiver of fees: Revised Guidelines effected on 1 Mar 2021
An advocate and solicitor may however waive any fees due to (or chargeable by) him for the conduct of any non-contentious business governed by the SRO provided that:
- it is a bona fide waiver; and
- the waiver is a FULL waiver of all fees due to or chargeable by him and not a part thereof unless otherwise provided herein; and
- the waiver of fees is not a device or method employed by the advocate and solicitor as a means to providing a discount; and
- the fact of the waiver and detailed particulars of the nature of the relationship or purpose upon which the waiver is given is noted on the file.
However, in cases of sale and purchase agreements, where the solicitor is attending to both the sale and purchase agreement for the purchaser and the end financing for the purchaser, the solicitor may not waive either the fees chargeable in respect of the sale and purchase agreement or the loan documentation. Furthermore, a solicitor may not waive disbursements in fact incurred, and thereby resulting in a discount in effect being given.
For further information on The Bar Council Guidelines on Waiver of Fees for Conveyancing Matters Circular No 058/2021, kindly click the link below:
https://www.malaysianbar.org.my/cms/upload_files/document/Circular%20No%20058-2021.pdf
Conclusion
It is understandable that clients wish to save legal costs. However, the intention of enforcing the fixed scale fee is to, inter alia, benefit both clients and lawyers. Clients would know how much they need to pay from the start and lawyers will be able to compete on quality of work as compared to quantum of discount. In the end, it’s beneficial for all.
If you have any queries, please contact any of our Partners or Associates.
Published on 8 July 2021