Hike in actual property transaction payment sparks lawsuit

A sudden value improve by a provider of software program applications to actual property attorneys final month will value many homebuyers a further $135 (together with taxes) on prime of their authorized invoice.

Right here’s why: with the intention to put together the intensive documentation essential to course of actual property recordsdata, actual property attorneys usually make the most of exterior software program suppliers. Their conveyancing software program is built-in into the pc techniques of actual property attorneys.

The transaction value charged by the software program suppliers is added to the lawyer’s invoice as an expense, along with the lawyer’s personal payment.

So even when two attorneys cost equivalent charges, the whole bill can fluctuate considerably, relying on which exterior software program supplier the lawyer makes use of.

Traditionally, software program charges charged to attorneys by software program suppliers, after which handed on to purchasers by their attorneys, had been within the vary of $25 per file. In January, 2020, when Dye & Durham acquired the software program applications of DoProcess, the transaction charges jumped from $25 to $129 plus HST. In saying the worth improve on the time, Dye & Durham dedicated in writing to its lawyer prospects that there can be no additional value will increase for buy, sale and mortgage recordsdata for 3 years.

Regardless of the worth improve and that dedication, most of the agency’s prospects opted to stick with Dye & Durham, and cross the rise on to their purchasers.

Final month, Dye & Durham once more elevated its costs, from $129 to $249 plus taxes, with two $20 reductions for legislation workplaces processing giant volumes of transactions.

There may be at the moment one competitor within the market for actual property legislation workplace software program. LawyerDoneDeal Corp., helmed by Toronto actual property lawyer Mauricio Romanin, prices $22 for buy transactions and one other $5 for a mortgage, for a complete of $30.51 together with tax.

This compares with Dye & Durham’s new prices of $281.37 together with tax for its Unity software program. So, after its value improve final month, and relying on which software program a lawyer makes use of, a homebuyer has the chance to avoid wasting $250 on their lawyer’s invoice.

Final week, two Ontario attorneys filed a category motion in opposition to Dye and Durham, and DoProcessLP, claiming the rise was a violation of its promise to carry charges for 3 years.

The plaintiffs are Napanee, Ont., agency, Burford Regulation Skilled Company, and Tais Davis, a sole practitioner in Toronto. The lawsuit was filed by Toronto litigation agency Charney Attorneys in opposition to Dye & Durham Restricted and DoProcess LP.

At press time, no defence had been filed and the motion had not been licensed by a courtroom.

John Robinson, Dye & Durham’s Chief Business Officer, supplied me with this assertion final week:

“We consider Unity is essentially the most superior actual property conveyancing software program on the planet … This declare is baseless and meritless and we intend to defend in opposition to it vigorously. We, together with hundreds of legislation corporations throughout the nation, stand behind Unity, which securely facilitates crucial transaction in most Canadians’ lives.”

Will the purchasers of Ontario actual property attorneys need to save $250 on their transactions? It’s a dialog purchasers must have with their attorneys.

Bob Aaron is a Toronto actual property lawyer and a contributing columnist for the Star. He could be reached at bob@aaron.ca or on Twitter: @bobaaron2

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