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Interest on money held in solicitors' client account
my mother in law completed on the sale of her house on 26th August (for about £180,000.
For various reasons, completion on her purchase won't occur until around the end of September.
We enquired whether any interest was due on her money being held in the solicitors' client/general client account and were told that the interest rate is zero.
Can this be correct? I thought they had to pay a reasonable rate of interest for sums over a certain amount over a certain minimum period.
For various reasons, completion on her purchase won't occur until around the end of September.
We enquired whether any interest was due on her money being held in the solicitors' client/general client account and were told that the interest rate is zero.
Can this be correct? I thought they had to pay a reasonable rate of interest for sums over a certain amount over a certain minimum period.
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For more on marking an answer as the "Best Answer", please visit our FAQ.Don't understand, you say <<my mother in law completed on the sale of her house on 26th August (for about £180,000. >>
Then you say <<For various reasons, completion on her purchase won't occur until around the end of September. >>
So if she completed on 26th August she should have the money in her account now but if she's not completing till end Sept then she gets the money end of September. So my question is when did she actually complete?
Then you say <<For various reasons, completion on her purchase won't occur until around the end of September. >>
So if she completed on 26th August she should have the money in her account now but if she's not completing till end Sept then she gets the money end of September. So my question is when did she actually complete?
@Ladybirder - she sold her house on 24th August (ie money transferred for purchaser) but will not complete (ie pay for) the purchase of her new house till end of September.
@Factor @Sandy Looking around, she could easily get around 3% from an instant access account. Even Natwest are offering 1% which on @Factor calculation would equate to about £150. Not to be sniffed at, especially if it was three times that (ie 3%)
@Factor @Sandy Looking around, she could easily get around 3% from an instant access account. Even Natwest are offering 1% which on @Factor calculation would equate to about £150. Not to be sniffed at, especially if it was three times that (ie 3%)
@ladybirder - Had we forseen the delay, I would have definitely suggested it. But alas, due to circumstances, we couldnt ! Even so, I find it difficult to believe that any solicitor that handles large amounts of client money (even for short periods) would have it in an account that pays no interest at all...
The bank knows that money held in a client account may not be there long and therefore may not be able to make use of it. In a way it is looking after the money for the solicitor and rather than getting interest the solicitor is perhaps lucky not be charged a fee by the bank. In my experience interest rates on such accounts are low. I recall they were around 2% when base rates were 5% so I wouldn't be suprised if the interest rate was zero now. In some countries now the rate of interest is NEGATIVE (-0.5% I recall in Switzerland and Japan)
Yes bednobs- in a few countries there is a negative interest rate of -0.5% I recall. Money Box this week mentioned it. In effect customers pay the bank interest for holding the customers' money. I think it mainly affected high earners and businesses who were happy to pay for the security of knowing that their money was safe in these banks
http://johanlinden.co...est-rate-swiss-franc/
I think this has happened in Japan too in the last few years
I think this has happened in Japan too in the last few years
Have a look at rules 24 and 25 here (Solicitors' Accounts Rules):
http://www.lawsociety...ds/Profethics_SAR.pdf
http://www.lawsociety...ds/Profethics_SAR.pdf
Solicitors have both clients accounts and clients deposit accounts. The deposit account is usually has the clients name in the title and a separate account opened for each client for funds being held long term. In the above situation when it is being held for a short period before being paid away it will most likely go in their general clients current account. No interest being paid. to do anything else the admin costs would outweigh the benefit of any interest earned
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