solicitor client account -interest bearing ?

suicra05

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I am in the process of buying an apartment. The money has been drawn down and is sitting in my solicitors client account for the last 7 days. As a general rule do solicitors earn interest on their client accounts or is it just a current account earning no interest.
 

LouisLaLoope

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I should know this but can't remember exactly. If memory serves, yes, solicitors earn interest on the client account funds cos they're all lumped in together. Solicitor accounts are heavily regulated, though. Clients are entitled to the interest, I think, on their money, but I don't think solicitors need to volunteer it (just produce it upon request). I can check this out for you if you really need to know.
 

Vanilla

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I should know this but can't remember exactly. If memory serves, yes, solicitors earn interest on the client account funds cos they're all lumped in together. Solicitor accounts are heavily regulated, though. Clients are entitled to the interest, I think, on their money, but I don't think solicitors need to volunteer it (just produce it upon request). I can check this out for you if you really need to know.

Solicitors are obliged to account to their clients for interest earned on their money if it is above something like €100.00. In general you will find that solicitors try to draw down funds for your benefit at least 5 working days before closing is due so that it has cleared and is available for you when you want to close. It's a bit of a balancing act because sometimes closing doesnt occur exactly when it is supposed to due to various reasons.
 

Calico

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I'm sorry to bump this, but do solicitors pay back interest earned in client accounts. I don't know of anyone who has bought a house and had interest returned to them on their deposit.

Does anyone know the procedure for this?
 

BJRsols

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Solicitors are obliged to account to their clients for interest earned on their money if it is above something like €100.00. In general you will find that solicitors try to draw down funds for your benefit at least 5 working days before closing is due so that it has cleared and is available for you when you want to close. It's a bit of a balancing act because sometimes closing doesnt occur exactly when it is supposed to due to various reasons.

Correct and right. Solicicitors only have to account for interest if it is over €100 and if requested by the client.

I'm open to correction, but there is no obligation on solicitor to put money in an interest bearing account. Solicitors these days would normally draw down the funds up to a week in advance because the banks are so unreliable in relation to time frames. If you need funds for a friday i would be requesting them for wednesday etc...

Some solicitors have deals with their banks that they receive no interest on their client if the bank doesn't charge interest on their overdrawn office account. In any event even in instances like this all they would be entitled to would be the bank's base rate ... less dirt of course
 

MOB

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1,161
Unless special arrangement is made, you are entitled to interest at the demand deposit rate applicable to your money in the solicitor's bank -as the money held by the solicitor is available on demand. The solicitor may well get a better rate, but that is because your money is held with lots of other money - which is the solicitor's good fortune, not the client's.

I think the demand rate right now is less than 0.4%. So, let's say €300k purchase money @0.4% = €1200 p.a. (before DIRT) or €23 for the week. And, as Vanilla says, there is no requirement to account for sums of less than €100 (actually it might even be €150).

In this example I have assumed a demand deposit rate of 0.4%. For smaller sums, you could be talking as little as 0.1% right now.
 

csirl

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2,162
My employer regularly gets interest cheques from its solicitors for money that has been in the client account. Seems to be standard practice - paid automatically without having to be requested.
 
M

Majex

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Solicitors obligation to pay Interest to clients.

There are two situations that can arise.

1.
 
M

Majex

Guest
Sorry. Messed up.
1. Solicitor Keeps money in a client account specifically for that client.
In this case the Client is entitled to all the interest earned no matter how much it is.

2. Solicitor keeps money in a general client account. (Probably an amalgamation of the monies of several seperate clients.
In this case the client has no entitlement whatsoever to the interest earned. It belongs solely to the solicitor and is specifically excluded from the definition of client monies. However, the client has the following entitlements.
There are two situations where he is entitled to an amount equivalent to the interest his money (on its own) would have earned if the solicitor had kept it on demand deposit at his principal bank.
The first is if that amount is greater than €100.00
The second is if he asks for it. (In this case he will be given the equivalent amount no matter how small it is).

This distinguishes between the interest earned by the Solicitor (None of the clients business) and the Solicitors obligation to his client. Generally SOlicitors eanr a higher rate than they have to pay because of the accumulation of multiple clients funds.
 
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