Referral fees for conveyancers: what the rules actually say

Start with the myth. 'Referral fees are banned.' They are not — not for conveyancing. The ban everyone half-remembers is section 56 of LASPO 2012, and it applies to personal injury work. Nothing else. A licensed conveyancer, or a solicitor doing residential property, can lawfully pay an estate agent or broker for introductions, and can lawfully be paid for sending clients elsewhere. The sums are not trivial either: £150 to £300 per completed transaction is a common range between agents and conveyancing firms, and volume panel arrangements can run higher still. What matters is not whether money changes hands. It is whether the client can see it happening. Both the Council for Licensed Conveyancers and the Solicitors Regulation Authority treat concealment, not payment, as the sin — and National Trading Standards takes exactly the same view from the consumer side.

The two rulebooks differ in wording, not substance. CLC-licensed firms must tell clients about any referral arrangement — including what is being paid — before the client is committed to instructing them. SRA-regulated firms sit under paragraph 5.1 of the Code of Conduct: clients must be informed of any financial or other interest an introducer has in referring them, and of any fee-sharing arrangement. In writing. At the outset. Not buried on page nine of the client care letter in eight-point type. There is a harder edge too. The referral must not compromise your independence or the client's best interests, and instructions must come from the client, not the introducer. If an agent pressures a buyer towards your firm with a threat dressed as convenience, that is the agent's problem — until it becomes yours.

Most conveyancing referral money flows from conveyancer to estate agent, and since 2019 that flow has been under a spotlight. National Trading Standards guidance requires agents to disclose referral fees to consumers — not merely that a fee exists, but the actual amount, in writing, before the consumer decides. An undisclosed fee can amount to a misleading omission under the Consumer Protection from Unfair Trading Regulations 2008, which is enforceable as a criminal matter. Why should a conveyancer care about the agent's obligations? Because a referral chain is only as clean as its dirtiest link. Practical hygiene: get each introducer to confirm, in writing and at least annually, that they disclose the fee and its amount. Keep the confirmations. If a regulator ever asks, a dated paper trail beats a warm recollection every time.

Conveyancers sit at a moment when clients visibly need other things: mortgage advice, protection, a will that reflects the new house, sometimes estate planning. Introducing a client to an FCA-authorised adviser is permitted, and being paid for the introduction is permitted too. What is not permitted is drifting into advice — commenting on which pension to move, which policy to buy, which product suits. Introduce; do not recommend products. Then disclose the fee under the same rules that govern fees coming in. SmartPeer exists for exactly this traffic: tracked referrals from professionals to vetted advisers and estate planners, with a client disclosure letter generated for each one. However you route it, the principle holds. A referral fee never got a conveyancer struck off. Hiding one has come close.