Monday, 30 November 2009

10 causes of sale constipation in the conveyancing process

Today’s blog exposes some of the reasons where a the conveyancing lawyer, acting for the seller typically slows the process down :

When selling many conveyancing lawyers have the mistaken the belief that all they do is throw out the papers to the Buyer. This mistaken belief has been perpetuated by the doctrine of Caveat Emptor, which obliges the buyer rather than the seller to uncover defects or legal problems with a property. As if the Caveat Emptor was not enough the courts, through cases such as …………have encouraged convayancing lawyers not to look at the paperwork for fear of being legally exposed to an argument that in reviewing ir commenting on the papers that may have some degree of responsibility to the buyer.

I would also argue the commoditisation of conveyancing and the driving down of conveyancing fees means that most conveyancing forms do not give themselves the luxury of being proactive and reducing the risk of the buyer’s conveyancers raising enquiries.

The net result is that most conveyancers fail to read through them first with the following results:

1 . They fail to ensure the Buyer’s conveyancing lawyers receives the HIP. Lamentably very few conveyancing lawyers produce HIPs and therefore rely on the agent to supply the HIP to the buyer’s conveyancing lawyers.

2. The HIP, not being prepared by those with deep knowledge of the conveyancing process , has unspotted errors in because the Seller did not have it prepared by a conveyancing solicitor.

3. Many Sellers rely on the registered title in the HIP which may be months old, which is not acceptable to the Buyer’s conveyancing lawyers (because it is not up to date) and so days are lost in getting fresh requested

4. Even if an up to date title is sent, but so many conveyancers forget to apply for and send the independent
documents referred in the title. Perhaps as many as one third of titles refer to additional documents which the Buyer’s lawyers will predictably ask to see. The land Registry can take up to a week to supply these documents. They are not a required part of a HIP.

5. Planning permissions for works certainly in the last 4 years, and ideally in the last 20, if not a complete set, are not produced, so the Buyer’s conveyancing lawyer has to chase. According to Fridays Property Lawyers internal data, there is a average of 1.5 planning documents applicable for each property.

6. New Home Warranty documents are not sent. They are not required as part of the HIP and are often in the hands of the Seller. Often these documents are lost and the days are wasted obtaining duplicates. No Lender in the UK will lend on a newly built property without such warranties being to hand.

7. All UK Lenders require conveyancing lawyers to be satisfied with management information for a leasehold property. All too often the seller’s conveyancing lawyer does send this information out on a leasehold sale, until requested, losing weeks potentially
8. Out of date Protocol Forms are often sent by the sellers conveyancer , meaning supplemental questions have to be asked to get them as comprehensive as the latest edition.

9 . Not reading the Sellers Property Information Form or Property Information Questionnaire which refers to guarantees, or building works or UPVC or electrical works – so the conveyancing lawyer for the Buyer has to then chase for this information

10 . Having too many contractual ‘special conditions’ some of which can be controversial, like seeking a refund of searches, or not warranting the accuracy of plans or having clause after clause of what penalties the Buyer should pay if they fail to complete

If a seller’s cconveyancing lawyer dealt with all the above it would undoubtedly speed up transactions but it would not make the paperwork “ exchange ready “. So, are exchange – ready – HIPs the solution ? Unfortunately I am yet to see such a document. My fear is that they are as rare as hen’s teeth. One particular company indicates that their HIP will include a certificate saying that the HIP is “ Exchange Ready “. |Given that the ERH does not deal with all of the above points at best it is an insult to the public's intelligence but at worst it may merit investigation by Trading Standards for being misleading.

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