Residential Conveyancing News

Improving Residential Conveyancing - Mark Broughton

On 29th June 2009 the Law Society published a consultation paper seeking the views of solicitors on how the current conveyancing process can be improved.

The paper comes at a time of unprecedented challenges in the housing market as a result of the economic downturn.

As the paper quite rightly states "the history of conveyancing practice is gradual evolution punctuated by periods of rapid change." Certainly recent reforms have tried to increase transparency in the selling and buying process, along with the use of electronic processes, as well as providing a more comprehensive land register - which should ultimately lead to simplicity, quicker transactions and lower costs for clients.

Solicitors have a pivotal role in residential conveyancing. Amongst their many roles they:

Identify and manage the transfer of good title and risks of ownership;
Identify and advise in relation to property issues and dependant transactions that affects clients; and
Provide binding undertakings to enable linked transactions to take place seamlessly.

The paper explores how the profession might respond to the changing business, regulatory and technological environment in which they operate.

The current residential conveyancing process is perceived by some to be cumbersome and on occasion, causes necessary delay to clients who often want swift, efficient action. When asked to respond to this allegation, the solicitors who have already provided input have pointed to the following areas of concern which they feel could be addressed to help relieve this problem:

1. Supply of information being incomplete, fragmented, delayed, irrelevant or duplicated.

This has certainly been exacerbated by the introduction of Home Information Packs (HIPs). Information may be provided more than once - and in different ways. A seller will now be asked to complete a Property Information Questionnaire at the marketing stage and then a further Property Information Form which will become part of the draft contract package issued to the Buyer's solicitors. Subsequent additional enquiries may be raised by the Buyer's solicitor. These can be excessive in some circumstances or even duplicate questions contained in the documentation already provided to them.

Prior to dematerialisation, title deeds were normally held by either mortgage lenders or solicitors. This resulted in deeds being accessible and easy to locate by the Seller's solicitor. Unfortunately, this is no longer the case and there have been significant difficulties and delay in obtaining original title deeds, especially where clients have "mislaid" them. This also raises concerns in relation to fraud.

2. Lack of adherence to common agreed procedures.

The Law Society introduced the TransAction Conveyancing Protocol some years ago to try and create a set procedure for solicitors to adopt. Solicitors have, for one reason or another, departed from this process - often for the good of their clients.

The protocol forms that are part of the contract package (Property Information Form and Fittings and Contents Form) are often issued to the Buyer's solicitor incomplete, or without the necessary enclosures referred to.

The majority of practitioners already interviewed as part of the consultation process stated that they would welcome the benefits of adherence by all conveyancers to methods set in the form of a Protocol or series of protocols that form a recognised best practice procedure.

3. Compliance Difficulties

Solicitors now have many challenging obligations placed upon them due to compliance issues resulting from mortgage lenders instructions, changes to Stamp Duty Land Tax, Money Laundering Regulations, HIP's, introduction of the Solicitors' Code of Conduct 2007 and procedural changes by HM Land Registry.

4. Problems with communication between all parties and advisors involved

This is a particular problem where there is a long chain and difficulties arise in co-ordinating the position of all the relevant parties. Delays (and even withdrawal of offers!) can result from the process of agreeing (or not agreeing) dates for exchange and completion.

Unfortunately, only so much can be done in this regard whilst solicitors continue to respect the greater needs of confidentiality provided to their clients.

5. Delay by principal parties

All parties to a transaction will have differing timescales in mind when entering into the buying and selling process. Unfortunately, this may result in them not being honest with their solicitors, estate agents or each other! This is something that practitioners have little power to resolve and work solely on instructions provided so as to represent the best interests of their clients.

However, it has been recognised that timescales may change and any protocol set must be flexible enough to meet the changing needs of clients but at the same time improve levels of communication to avoid unnecessary stress and wasted costs.

The Way Forward.............

The consultation paper has suggested a number of areas for improvement:

To adopt standardised documentation - this will address the concern of supply of information which may be incomplete, fragmented, delayed irrelevant or duplicated;
Update variable and flexible protocol with agreed timescales - which should avoid the lack of adherence to common or agreed procedures and compliance difficulties. It may also help communication between the principal parties and keep any delays to an absolute minimum;
Membership scheme to promote quality - this would be open to all solicitors firms undertaking conveyancing work. The scheme would be dedicated to improving the conveyancing process and would make use of completion ready packs, a client charter, revised protocol and forms and strict regulation. This may in the future, set apart firms recognised by this scheme to others who are not and this could result in a seal of quality being issued to members.
Electronic Infrastructure to support secure conveyancing - this may obviously assist the current problems with communication within chains or between principal parties.

However, despite the above, it is recognised that current conveyancing processes are generally well tuned to balancing the competing interests of Buyers and Sellers within challenging time, costs constraints, market conditions and within the existing law and procedures. In order to be effective, solicitors constantly adjust between standardised and customised documentation and procedures to act in the best interests of the clients.

As the paper reports - "there is no ‘silver bullet'." If you would like to discuss any of the above issues please do not hesitate to contact a member of our Business and Property Services Team.

The Law Society Consultation process will end on 18th September 2009.

Mark Broughton

This article provides a summary of a recent case/change in law/news item. It is intended for general information purposes only and is not to be relied upon. It does not constitute legal advice and should not be treated under any circumstances as a substitute for legal advice. Lees Solicitors LLP does not accept any responsibility for any loss that may arise from reliance upon the information contained within this article. The copyright in this article is owned by Lees Solicitors LLP and permission must be sought before reproduction or publishing.

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