BILLING AND ACCOUNTS IN PROPERTY TRANSACTION IN NIGERIA

THE BILL OF CHARGE AND ACCOUNTS IN PROPERTY TRANSACTION IN NIGERIA

CHAMAN LAW FIRM

2021-07-19 0 min read

billing and account in property law transaction. bill of charge by a lawyer in nigeria

BILLING AND ACCOUNTS IN PROPERTY TRANSACTION IN NIGERIA

As a general rule, Rule 52(1) of RPC, provides that the professional fee charged by a lawyer for his services shall be reasonable and commensurate with the services rendered. Thus, the lawyer should not charge excessively or so low. However, this does not derogate from the fact that a reduced fee may be charged on grounds of

·         Special relationship, or

·         Indigence of the client.

In determining his fees, a lawyer can make recourse to Rule 52(1)RPC.

In property law transactions, charges is based on the following work done to wit,

·         Documentation based on the Legal Practitioners(Remuneration of documentation and other land matters)order 1991

·         Contentious business, litigation

·         Non-contentious business. Example obtaining probate, perfection

HOW CAN A LEGAL PRACTITIONER CHARGE?

·         Hourly rate

·         Gearing, deposit on account

·         Quantum meruit

·         Appearance fee, this may be paid periodically or cumulative. This is dependent on where the lawyer is domiciled, location of the court, the court the lawyer would appear in.

·         Percentage fees, the higher the consideration, the lower the percentage.

·         Scale fees, this is used for non contentious matters and they are regulated by statute

·         Contingent fee. This is based on a condition. Rule 50(1)RPC a lawyer may enter into a contract with his client for a contingent fee in respect of a civil matter undertaken or to be undertaken for a client whether contentious or non-contentious. Provided that

ü  The contract is reasonable in all circumstances

ü  The contract is not vitiated by fraud, mistake or undue influence, or

ü  Contrary to public policy

ü  Thee is a Bona fide cause of action, if the employment involves litigation.

THERE MUST A CONTINGENCY AGREEMENT

·         Retainership agreement, this is an agreement between a solicitor and his client for the solicitor to carry Pursuant to Rule 49(4) of RPC, there are two types of retainer: general retainer and special retainer. In a genera retainer, the lawyer solves every legal action the client may have. A special retainer is as regards a specific matter as instructed by the client. The fact that there is a special retainer does not preclude the lawyer from acting against him in respect of a matter for which he was not instructed specially.

·         The fact that you have been retained does not mean you should not charge for work done. Every cost incidental to a special retainer will be borne by the client. E.g. Consent fees, stamp duties, Registration fees.

NOTE

·         Never give quotation

·         Do not agree to a salary structure

SUING FOR FEES

Section 16(1) LPA provides that a legal practitioner shall be entitled to recover his charges by action in any court of competent jurisdiction. The court in reference is the State High Court.

The conditions for recovery are stipulated in section 16(2)LPA to wit,

·         A signed bill of charges containing particulars of principal items must be presented to the client.

·         One month must expire.

ABUBAKAR V MANULU, OYEKANMI V NEPA.

However, there are exceptions where the action may be brought before the expiration of one month where the client is likely to act in a manner as to prevent the lawyer from getting his money. Section 16(3) LPA.

CONTENT OF BILL OF CHARGES. Onyekanmi v NEPA

·         Must be in writing

·         Should contain particulars of  charges

·         Charges should be particularized

·         Date of the particulars

·         Signature of the managing director or legal practitioner.

·         Name of the client.

·         The bill should be sent to the clients last known address.

TAXATION OF CHARGES

ü  Process by which the fees presented by a legal practitioner is reviewed or accessed by an officer of the High courts. This is to ascertain if the fees charged are reasonable.

ü  This can only be done if the client applies to the officer of the High court.

ü  It need not be for contentious matters.

ü  The conditions precedent are,

§  Stated in section 18 LPA

§  The application must be brought within one month upon presentation to the client.

§  The legal practitioner can also apply to the officer of the High court to have the charges taxed. This is to check if the fees are reasonable.

§  SOBODU V DENLOYE, SECTION 18 & 19.

1991 ORDER

Relates to documentation as it pertains to sale, purchase, mortgage, lease and other dealings in land.

This order does not apply to documentation or contentious matters stipulated in section2 of the 1991 order.

This order is divided into three scales to wit,

a.      Scale I, Sales, mortgages and purchases

b.      Scale II, leases and agreements for lease at rack rent

c.       Scale III, business that is not contentious.(not litigation)

It is pertinent to note that the legal practitioner may elect to charge under scale III. The legal practitioner however must before undertaking the business by writing under his hand communicates the client that he elects to charge under scale III. SECTION 5 order 1991

CONDITIONS TO NOTE IN CHARGING UNDER SCALE III

SEE SCALE III which is similar to rule 52 RPC.

Part I

In part I, there are five columns and there are nine transactions. In calculating, legal practitioner's fees under part I of scale I, there are five stages to go through

A legal practitioner is entitled to be paid adequate remuneration for the services rendered to the client - Rule 48(1) RPC

TYPES OF FEES THAT A LAWYER CAN CHARGE

The following are the type of fees which a legal practitioner acting on property transaction/property law practice can charge

·         Gearing

·         Fixed fee

·         Hourly rate fee

·         Percentage fee

·         Appearance fee

·         Scale fee

·         Contingent or success-based fee - Rule 50 RPC.

Generally, legal practice can be divided into

·         Legal documentation

·         Contentious work - litigation

·         Non-contentious work - corporate

Of importance is legal documentation which involves land matters. The regulatory law is the Legal Practitioners (Remuneration for legal documentation and other Landed Matters) Order 1991. Under this order, there are three scales

·         Scale I - sale, purchase or mortgage that is completed

·         Scale II - lease and lease agreement that have been completed

·         Scale III - legal documentation not provided for in scale I and III (section 1)

The order expressly excludes all matters not contained in scale I and II from remuneration prescribed therein (section 2)

Scale I

Scales I deal with charges on sales, purchases and mortgages. Scale I is further divided into three parts. All the rules applicable to scale I is contained in part III. In part III, while parts I and III of the scale contains schedule of fees chargeable by a legal practitioner for specific transaction.

Part I

In part I, there are five columns and there are nine transactions. In calculating, legal practitioner's fees under part I of scale I, there are five stages to go through

0.      Step I - the first N1000 per 100

1.      Step II - second and third N1000 per 100

2.      Step III - fourth to twentieth N1000 per 100

3.      Step IV - remainder without limit per N100

The consideration of mortgage, it is the mortgage sum; if it is sale then the purchase price and it is lease, it is the rent. Under part II of scale I, there is no need to calculate. Under part II of scale I, some of the rules are; where a legal practitioner is representing bothrn the mortgagor and mortgagee, he shall be entitled to charge full of the mortgagee's legal practitioner's fees and one half of the fees which would be allowed to be the mortgagor's legal practitioner - s. 2 1991 Order. Where in any of the column in part 1, it is written "part II thereof, there would be no need for computation, just look at the relevant figure.

Computations below

Purchaser's solicitor's fee for investigating title to leasehold property and preparing legal documentation.

Consideration is N210, 000, 000 - Number 4

Step I - N1000 = N225

Step II - N2000/100 *22.50 = N450.00

Step III - N17, 000/100 * 11.25 = N1912.50

Step IV - N209, 980, 000/100 * 7.50 = N15, 748, 500

Step V - N225 + N1912.50 + N450.00 + N15, 748 500 = N15, 750, 087.50

Purchaser's legal practitioner's fees for negotiating the purchase of the property.

Number 9 - Consideration is N210, 000

Step I - N1000/100 * 22.50 = N225.00

Step II - N2000/100 * 3.75 = N75.00

Step III - N17, 000/100 * 3.62 = N636.40

Step IV - N209, 980, 000/100 * 2.80 = N3, 878, 440.00

Step V - N225 + N75 + N636.40 + N3, 878, 440 = N3, 879, 776

Mortgagor's legal practitioner for negotiation plan.

Consideration = N40, 000, 000

Step I - N1000/100 * 11.25 = N112.50

Step II - N2000/100 * 11.25 = N225.00

Step III - N17, 000/100 * 3.75 = N637.50

Step IV - N39, 980, 000/100 * 2.50 = N999, 500.00

Where solicitor acts for both mortgagor and mortgagee

Mortgagor's fee would be half - N999, 500/2 = N499, 750

Mortgagee's fee will be full. Caution is as follows

Step I - N1000/100 * 22.50 = N225.00

Step II - N2000/100 * 22.60 = N452.00

Step III - N17, 000/100 * 7.70 = N1, 319.00

Step IV - N39, 980,000/100 * 5.00 = N1, 999, 000

N225 + N452 + N1319 + N1, 999, 000 = N2, 000, 946

N2, 000, 946 + N499, 750 = N2, 500, 696

Legal practitioner's fee is N2, 500, 696

Scale II

The money to be taken into consideration is the rent received for the transaction and not that yet to be paid.

Scale II deals with leases. The lessee's legal practitioner gets half of the amount payable to the lessor's legal practitioner - s. 2 of part I. Where a legal practitioner acts for both lessor and lessee, he shall charge the lessor's legal practitioner's charge and one half of those of the lessee's legal practitioner. It would be - lessor's full fees and lessor's fees divided by four.

Acting for lessor: Consideration is N5, 000, 000 (s. 1(1) of part I scale II)

·         Step I - N37.50 in respect of first N100

·         Step II - N25 in respect of each N100 of rent up to N1000

·         Step III - N12.50 in respect of every subsequent N100

Solution

Step I - N37.50

Step II - N900/100 * 25 = N225

Step III - N4, 999, 00/100 * 12.5 = N62, 437.50

Step IV - (N62, 437.50 + N37 + N225)/2 = N31, 268.75

Lessee’s legal practitioner fees = (N62, 437.50 + N31, 268.75)/2 = N6, 259, 359.4 (lessee’s  legal practitioner fee is half of it)

Before a legal practitioner can charge under scale III, he must give a written notice under his hand to the client.

Bill of charges

A legal practitioner is entitled to remuneration for services done for a client - Rule 48 RPC. Bill of charges of a legal practitioner contains the professional charges, particularized by a legal practitioner to be served on a client. When a client fails to pay the charges of a legal practitioner, the legal practitioner is entitled to recover his charges by an action in any court of competent jurisdiction - s. 16(1) LPA.

Before a legal practitioner recovers his charges, the following are the procedural steps

         .            Draft a bill of charges

The content of a bill of charges was provided for in Oyekanmi v. NEPA. Importantly, it must contain the following:

 .        Contain the subject matter

a.       Be addressed to the client - name of client

b.      Particularization of the charges, date and amount or particulars of principal items

c.       It must be dated

d.      It must contain the name of the legal practitioner and his signature

e.       It must be in writing

        i.            The bill of charges is then sent or delivered to the client either personally or left for him at his last address known to legal practitioner or by post to the last known address.

      ii.            The legal practitioner is to wait for a period of one month after delivery of the bill of charges

    iii.            If after one month, the bill has not been paid, then proceed to the high court of a state where legal practitioner usually carry on his business or resides - s. 16(2)(a)(b) LPA

It is possible for the legal practitioner to bring an action for recovery of the charges before the period of one month elapses. The following conditions as provided by s. 16(3)(a)-(c) LPA must be satisfied.

·         The bill of charges has been delivered to the client

·         On the face of the bill, the charges appear to be proper in the circumstances

·         There are circumstances indicating that the client is about to do some act which would probably prevent or delay the payment to the legal practitioner of the charges. This could be when the client is relocating abroad or transferring his funds abroad.

LEARN HOW TO COMPUTE AND DRAFT THE BILL OF CHARGES

CHAMAN LAW FIRM

Legal Practitioners, Solicitors and Arbitratos

Plot 50, Arepo Road, De’ Royal Supermarket Building, Arepo, Ogun State

Email: chamanlawfirm@gmail.com

Web: chamanlawfirm.com

Tel: 08065553671, 08024200080

Our Ref:                                                                                                          Your Ref

                                                                                                                        22nd March, 2021

Mrs. Kayuba Ada

7,Magboro Road,

Magboro,

Ogun State.

 

Dear Madam,

RE: BILL OF CHARGES FOR MRS KAYUBA ADA v. AGRICULTURAL BANK PLC Suit no 1/2/02/HC

I refer to the above subject matter. Please find below the bill of charges.

BILL OF CHARGES

Subject matter - Litigation –

MRS. KAYUBA ADA v. AGRICULTURAL BANK PLC Suit no: ........

Court: High Court of Lagos state

Date                                        Principal items/Particularized charges             Amount

07-02-2012

07-05-2012

 

                        TOTAL AMOUNT OF DISBURSEMENT                                      4, 000,000

                                                DEPOSIT ON ACCOUNT                                        1,000,000

                                                BALANCE                                                                 3,000,000

WRITTEN BY:

CHAMAN LAW FIRM TEAM

Email: info@chamanlawfirm.com/ chamanlawfirm@gmail.com

Tel: 08065553671, 08024200080