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What is an Engrossment Fee?

Zenyx Griffiths

Written by Reviewed by Gareth Brooks

20th Jan 2021 (Last updated on 21st Sep 2021) 3 minute read

There are a number of conveyancing fees that you will encounter when buying or selling a house. One such cost could be an engrossment fee. An engrossment fee is a fee that the seller's conveyancer charges for producing the legal document that will transfer ownership from the seller to the buyer. An example of this would be the lease when purchasing a flat or leasehold house and is common when the seller is a developer or housebuilding company and the property is being sold for the first time.

Compare My Move work with professional property and finance experts to create insightful guides that will aid you through your house purchase. In this article, we will explain what an engrossment fee is, when you should expect to come in contact with one and why it must be paid.

This article will cover the following:
  1. Why Were Engrossment Fees Introduced?
  2. How Much Does an Engrossment Fee Cost?
  3. When is an Engrossment Fee Paid?
  4. Do You Have to Pay an Engrossment Fee?
  5. Learn More About Conveyancing

Why Were Engrossment Fees Introduced?

The conveyancing process is defined as the handling and processing of all legal documents involved in the sale of a property. Some of these documents will require the creation of a draft transfer or Lease. This draft will be sent to the conveyancer representing the other party involved in the transaction. It will then be checked and rechecked multiple times with both conveyancers potentially making a number of amendments. Eventually, the wording will be agreed upon and the draft will be finalised, and the document will be ‘engrossed’ ready for signature.

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How Much Does an Engrossment Fee Cost?

You will often be faced with an engrossment fee when buying a leasehold, new-build or converted property. The developer’s or freeholder’s conveyancer will prepare and supply the legal documentation for signature, resulting in an extra charge for the buyer. This will vary depending on the developer, but the average cost for an engrossment fee is currently £150 - £250.

When is an Engrossment Fee Paid?

You typically won’t be presented with an engrossment fee when dealing with a simple property transaction. You will have a higher chance of encountering an engrossment fee when purchasing a new-build, converted or leasehold property as the paperwork is much more complicated and thorough.

When purchasing a new-build home, you will essentially be paying the developer for handling the legal paperwork which is why the price can vary depending on the developer you’re working with. For further information on purchasing a new-build, read our New-Build Guide to understand the more complex process.

If you choose the conveyancer that your mortgage lender or estate agent recommended, this can also increase the chances of an added engrossment fee. Before choosing a conveyancer, you should carefully read their terms and agreements and ask as many questions as possible. Enquire about their prices and openly ask if they will be including an engrossment fee and why. Agreeing to a fixed fee conveyancing service will lessen the chances of any hidden fees so you may want to ask for further information about this option.

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Do You Have to Pay an Engrossment Fee?

As you will most likely face an engrossment fee when purchasing a new-build property, especially a flat or leasehold home, the developer’s conveyancer will have to prepare two engrossment copies of the lease or transfer. One copy will be for the seller or leaseholder to sign and the other for the buyer. This will be the reasoning for the added fee.

This was fairly justified in the past as it involved a substantial amount of typing, editing and paperwork. However, nowadays, everything is completed electronically and, as a result, takes much less time. Some people believe that an engrossment fee is no longer justified due to this but they do still occur.

As it isn’t a legal requirement, you can object to paying the engrossment fee but you may not be successful in removing it. It’s important to note that it is often made a condition of the sale contract and so you will have to object before the exchange of contracts. If you sign and exchange the contract with the engrossment fee included, you will have to pay it.

This is also true when hiring a conveyancer. You should be made aware of any engrossment fees before choosing a conveyancer and before signing any contracts. These added costs will sometimes be hidden amongst the Heads of Terms and so you must carefully read through their conditions before agreeing to work with them. If you find an engrossment fee within their Terms and Conditions, ask further questions before objecting.

Learn More About Conveyancing

This has been part of our conveyancing guide. Next, we explore what fixed fee conveyancing means. To learn more read what is fixed fee conveyancing.

Zenyx Griffiths

Before Compare My Move, Zenyx once wrote lifestyle and entertainment articles for the online magazine, Society19 as well as news articles for Ffotogallery.

Gareth Brooks

Reviewed by Gareth Brooks

Solicitor and Partner at RMNJ Solicitors, RMNJ Solicitors

With 19 years of experience in the residential conveyancing industry, Gareth Brooks is a partner and head of management for the conveyancing department at RMNJ Solicitors.

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