Do you pay conveyancing fees if a sale falls through?

If you've just had a property deal collapse, you're probably feeling two things at once: disappointed (or relieved), and a bit cranky about the money already spent.

It happens more often than people think. You might have been lining up the bank cheque after an auction in Richmond, or finally had your offer accepted on a townhouse in Preston, only to have finance wobble, a special condition fail, or the seller's plans change. And then the awkward question lands: 'Do I still have to pay my conveyancing fees even though we didn't settle?'

In Victoria, the honest answer is: it depends on what work was done, what costs were actually incurred, and what your costs agreement says. There are also some rules around how conveyancers must disclose costs, which can matter if a bill feels out of the blue.

Disclaimer: This is general information only, not personal legal advice. Still, if you understand the usual moving parts, you'll feel a lot more in control the next time you sign anything.

What Does 'Falls Through' Mean in Property Transactions?

People use the phrase for a few different situations:

You never sign a contract, and the deal fizzles during negotiation
You sign a contract, then it ends before settlement (cooling off, a special condition fails, someone rescinds, or there's a default)
You're bidding at auctions and you don't win, after paying for contract reviews

Those scenarios can lead to very different cost outcomes.

Understanding What You're Paying a Conveyancer For

Most conveyancing costs sit in two buckets:

Professional Fees (The Work)

This is the time and skill side of the job. Depending on where you're at, that can include:

Reviewing a Section 32 and contract (and flagging issues you'd never spot at a quick open for inspection)
Negotiating special conditions (finance, building, longer settlement, early release of deposit, you name it)
Advising on cooling off rights and deadlines
Liaising with the agent, lender, broker, and the other side
Preparing transfer paperwork and settlement figures once the deal is moving towards settlement

Even if a matter stops part way through, the work already done doesn't disappear.

Disbursements (Third Party Costs)

These are the out of pocket costs your conveyancer pays to others on your behalf, like searches, certificates, and registrations. Some are small, some are not. They're often non refundable once ordered, because the third party has already supplied the report or certificate.

Important: People hear 'fixed fee conveyancing' and assume that means 'pay nothing unless settlement happens'. Fixed fee usually means the professional fee is set, not that a conveyancer is magically absorbing all time and disbursements if the deal collapses.

When Did the Deal Stop? Here's How It Affects Your Costs

1. You Pulled Out During the Cooling Off Period (Private Sale)

For many private sales of residential property (and small rural property), buyers get three clear business days to cool off after signing. It starts from when you sign, not when the seller signs.

Cooling off is not free. If you cool off properly (in writing), you're typically entitled to a refund of money paid less $100 or 0.2 per cent of the purchase price, whichever is greater.

What About Conveyancing Fees?

You may still need to pay for the review work already done, any negotiations, and any advice given
You may also need to cover any searches or certificates already ordered
Some firms will reduce the professional fee as a goodwill gesture, or apply a credit to your next purchase, especially if you continue working with them (it varies)

Note: Cooling off does not apply in a few common situations, including properties bought at auction, or within three clear business days before or after an advertised auction.

2. You Bought at Auction, Then Things Went Sideways

Auctions are where Melbourne feels most 'alive', and also where the risks hit harder. Once you and the seller sign after the hammer falls, there's no cooling off period.

If the sale later fails because of a serious dispute or default, you're not in the cooling off world anymore. At that point, fees and losses can be much bigger, and the contract terms matter a lot.

From a Cost Point of View:

Your conveyancer has usually done significant pre auction work (reviewing the contract, advising you, sometimes negotiating changes)
After auction, there's often a rush of post signing work (notifying your lender, arranging settlement steps, checking compliance, preparing figures)
If the contract ends after all that, you can expect a bill for work done, plus any disbursements

Also, buyers often ask about the deposit. Consumer Affairs Victoria notes there's no law setting the deposit amount, but it is usually 10 per cent. That's separate to conveyancing fees, but it's part of why auction fallout can feel so brutal.

3. Finance Didn't Come Through Under a 'Subject to Finance' Condition

This is one of the most common Melbourne stories: you get the call that your offer is accepted in Coburg, you breathe out, then the bank val comes in low or the lender changes their mind.

If your contract has a properly drafted finance condition, and you follow the steps (deadlines, notices, evidence), you may be able to end the contract without losing the deposit. The exact wording matters.

Conveyancing Costs in This Scenario:

You pay for the legal work already done (review, advice, notices, liaising)
You pay for disbursements already incurred
You often don't pay a 'full settlement' style professional fee, because settlement work hasn't happened, though that depends on the agreement and how far things went

Practical Tip: If finance is your big unknown, it can be sensible to hold off on optional searches until the lender is giving strong signals. Your conveyancer can help you stage the due diligence so you're not spending money too early.

4. Building, Pest, or Strata Surprises Changed Your Mind

Sometimes it's not finance, it's the property itself.

A building report on an older weatherboard in Yarraville might reveal stumping issues. An owners corporation set up in a Docklands apartment might have red flags in the minutes. Or the Section 32 might show an easement that ruins your renovation plans.

If there's a special condition allowing you to end the contract (or a right to withdraw because of a disclosure problem), you might be able to exit with your deposit returned. Costs are still a separate question:

The conveyancer's time is still time
The reports you ordered are still payable
You might be able to reuse some information on a later purchase, but many certificates and searches date quickly

On the seller side, this is also where we see deals collapse because the Section 32 isn't accurate or complete. Consumer Affairs Victoria warns that if a Section 32 contains incorrect or insufficient information, a buyer may be able to withdraw from the sale or take legal action. That's one reason vendors can end up paying conveyancing costs even when a sale doesn't complete, because preparation work still happened.

5. The Seller Pulled Out, the Property Was Withdrawn, or Something Didn't Stack Up

Sellers can withdraw a property from auction before it sells (yes, even at the last second). In private sale negotiations, sellers can also change direction right up until contracts are signed.

If You Never Signed a Contract:

You're usually only paying for:

Any contract review work you asked for
Any specific advice or negotiation work
Any disbursements you authorised (less common pre contract)

If a contract was signed and then ended because the seller couldn't meet obligations (or a key document issue emerged), you may have better options. The costs outcome still depends on what work your conveyancer did and what costs were incurred along the way.

6. Off the Plan Delays, Sunset Dates, and Moving Goalposts

Off the plan purchases are their own universe. People often sign, then wait months (sometimes years), and life changes: jobs, rates, family plans, you name it.

Even when a contract ends later due to a sunset date or rescission rights, there can be a fair amount of legal work done over time: reviewing variations, advising on notices, dealing with finance extensions, and responding to developer updates.

So yes, there can still be conveyancing fees even if you never reach settlement, because the file may have been 'alive' for a long time.

Do You Have to Pay Conveyancing Fees If It Falls Through?

Most of the time, you pay something, because work has been done and disbursements may have been incurred.

The Better Questions Are:

Are you being charged fairly for the stage the matter reached?
Are you being charged for third party costs you agreed to?
Was the fee arrangement explained clearly at the start?

Victorian Conveyancing Cost Disclosure Requirements

In Victoria, conveyancers must provide written disclosure of costs related to the conveyancing work, and it must be given before (or when) they are retained, or as soon as possible after.

That disclosure should cover what you'll pay (or how it's calculated), how and when you'll be invoiced, and dispute options.

Consumer Affairs Victoria also notes that if a conveyancer does not disclose costs before or at the time they're retained, the client is not required to pay those costs.

If you're using a solicitor rather than a licensed conveyancer, there are also cost disclosure rules for lawyers, including when disclosure is required.

That doesn't mean you'll pay nothing when a deal collapses. It means you should never feel like the bill came out of nowhere.

Questions to Ask Your Conveyancer Before You Get Too Far In

This is where a two minute chat can save you a lot of frustration later.

'If the sale doesn't proceed, what do I pay?' Ask for the plain English answer, not the brochure answer
'Is your fee staged?' Some firms charge a review fee, then a separate settlement fee. Others have a single fee with conditions
'What disbursements might be incurred, and when?' Get a feel for what could be ordered early
'Can any costs be credited to my next purchase or sale?' This is especially relevant if you're a serial auction attendee (welcome to Melbourne)
'Do you charge for amendments and negotiations?' Some contracts need a light touch. Others become a full email marathon

If you're selling, also ask what's involved in preparing the Section 32. For example, if the property is in an owners corporation, there are specific certificate requirements. That prep work is real work, even if you later take the property off the market.

How to Keep 'False Start' Costs Down Without Cutting Corners

You don't want to be penny wise and pound foolish, especially with property. Still, you can be smart about when you spend.

Use a 'Triage' Approach Before You Fall in Love

Before you pay for every possible search, get your conveyancer to scan for deal breakers:

Title issues (easements, covenants)
Owners corporation warning signs
Special conditions that are one sided
Settlement terms that don't match your finance plans

It's a bit like checking the weather before you leave the house. Melbourne will still surprise you, but you'll be better dressed for it.

Be Strategic With Auctions

If you're planning to bid in the inner north most weekends, you don't want a full deep dive on every contract unless it's truly in the running. A focused review can identify the big risks, then you go deeper once you're serious.

Stagger Searches If Finance Is Uncertain

If your broker is still shopping lenders, it can make sense to delay some costs until finance looks more certain. You can still meet deadlines, you're just not throwing money at reports too early.

Keep Everything in Writing

If a deal collapses, the paper trail matters: notices, emails, deadlines, and what you asked your conveyancer to do. It also helps if you later want a clear itemised bill.

What to Do If You've Received a Bill After a Fall Through and It Doesn't Feel Right

Start here:

Read the costs disclosure and engagement terms you were given at the start. In Victoria, conveyancers are meant to disclose costs in writing, including how and when you'll be invoiced
Ask for an itemised breakdown of work done and disbursements incurred
Raise any concerns early, while the matter is fresh and everyone remembers what happened

Most issues are resolved with a calm conversation and a clearer explanation. When that doesn't happen, there are formal dispute pathways, and good cost disclosures should point you to them.

The Takeaway Most Melbourne Buyers and Sellers Wish They'd Heard Earlier

A sale falling through is frustrating, but it's not always 'money wasted'.

Sometimes paying for good advice is what stops you buying the wrong property, or signing a contract that quietly exposes you to far bigger losses. We've seen plenty of clients walk away from a deal feeling annoyed in the moment, then grateful a month later when they find something better (and safer).

The key is making sure you understand, from day one, what you'll pay if the deal stops early, and what you can do to keep those costs sensible.

Need a Steady Hand Before You Sign Again?

If you're buying or selling in Melbourne and you want clear advice on what you'll pay if a deal doesn't proceed, we can help you sort it out calmly, before emotions take over.

Pearson Chambers Conveyancing offers a complimentary Section 32 contract review, and we'll talk you through the risks in plain language, along with the likely costs at each stage, so there are fewer nasty surprises.

Email contact@pearsonchambers.com.au to speak with the team.