Tuesday, 29 December 2009

Freeing up Government Data on Rights of Way

Google Maps containing information on public Rights of Way could be of use in the Conveyancing Process as conveyancing solicitors in some cases have to investigate trough Commons Registration Searches and other conveyancing searches.

I am sure we all agree that speeding up conveyancing would be a good idea.

Sunday, 27 December 2009

What is Caveat Emptor ?

The principle of caveat emptor (let the buyer beware) means that the purchaser is assumed to purchase the land or property in its condition at the date of the contract, regardless of what the buyer actually knows about the property. The responsibility for finding out about the property lies with the purchaser so it is the purchaser ( =though his advisers ) who submits pre-contract enquiries with the vendor.

Whether or not the purchaser raises enquiries, the vendor is legally compelled to disclose latent encumbrances and defects in title, unless the contract says otherwise.

The vendor's duty does not extend to disclosure of physical defects and the vendor is not required to disclose anything that is already in the purchaser's knowledge. It is generally unwise for the vendor to assume that the buyer has actual knowledge.

The purchaser's remedies for incorrect or incomplete replies

Subject to the terms of the conveyancing contract, the purchaser has no remedy against the seller for incorrect or incomplete replies unless the buyer can successfully establish that there has been some misrepresentation. A legal misrepresentation requires:

-An untrue statement of fact by the vendor.
-Reliance on the statement by the seller, inducing it to enter into the contract.
-Loss suffered by the buyer as a result of entering into the contract.

Preparing replies in advance of the pre-contract enquiries being raised

Although usual for the purchaser to raise pre-contract enquiries with the vendor, in some circumstances it may be appropriate for the vendor to supply replies to anticipated pre-contract enquiries.

What is the Legal Services Board going to do?

The Legal Services Board is to have an oversight role in ensuring that the interests of consumers ( including conveyancing clients ) are properly protected.

It is said that the immediate priority of the Legal Serviced Board is to ensure that the regulatory function of each regulator is separated from any representative function. This is most relevant for the Law Society which has set up the SRA ( Solicitors Regulation Authority ) to regulate conveyancing solicitors and non conveyancing solicitors. The Bar Council has set up the Bar Standards Board to regulate barristers in England and Wales.

The establishment costs and ongoing running costs of both the Legal Services Board and the OLC will be funded by the legal profession. The Legal Services Board will soon make rules to determine the way in which the costs will be covered and split between the different branches of the legal profession. The Council of Licensed Conveyancers will soon after decide how its liability for these costs should be apportioned across it’s conveyancing members

Chosing a conveyancing solicitor

Conveyancing stands as the legal process to obtain the ownership of a property. Conveyancing covers the whole buying and selling process of a property, hence the property is registered in the name of the purchaser only after following the legal process of conveyancing. Conveyancing is essentially the transaction that takes place between the buyer and the seller. It is therefore during the contract negotiations between the two parties a conveyancing service provider is needed. Conveyancing service is usually provided either by the conveyancing lawyers, known as the conveyancer, or by the conveyancing companies.

Choosing the conveyancing solicitor can be daunting. Consider the following tips to choose the best service to befit your requirement and to strike the best deal.

Look for a competitive and fixed rate: Whether you are searching for a conveyancer or conveyancing companies, look for a fixed competitive conveyance cost if you want the value for your money. Keep away from the firms that charge on an hourly basis. You can also search conveyancing online to choose the cheap yet reliable services.

Look for a guaranteed quality: With the boom in the real estate market conveyancing service providers have also mushroomed. Make sure that your conveyance firm is regulated by the Council for Licensed Conveyancers or the Law Society

Look for the expert: Choose your conveyancing company with utmost care, so look up for a firm who specializes in financial residential properties and also make sure that the conveyancer or the firm is specialized in family and litigation, divorce along with buying properties.

Ask for the client care letter: Before selecting certain conveyancing company or any particular conveyancer, ask for the client care letter, it is indeed one of the most important aspects.

Assess the technology: There are companies who often send email with the online conveyancing quotes. Research well prior you select one. Try to gauge the technology options which are available with the firm. Some online conveyancing service providers will be able to track the status of your transaction via internet and will also update you through SMS. Apart from this, a conveyancing solicitor will also give you the username and password to ensure security and convenient conveyancing.

Wednesday, 23 December 2009

Landlord stung by failure to comply with service charge requirements

In Daejan Investments Ltd v Benson and others [2009] UKUT 233 (LC), the Freeholder/landlord who owned a block of shops and flats gave notice to the leaseholders of the flats that it intended to carry out major works amounting to £270,000.

The landlord failed to comply with the statutory service charge consultation requirements leading to a service charge dispute. The Leasehold Valuation Tribunal (LVT) refused to grant a dispensation from compliance. This net result of the decision was that the service charge liability of the five leasehold owners was limited to £250 each.

At appeal, the Lands Chamber of the Upper Tribunal agreed with the Leasehold Valuation Tribunal that it could not take into account the disproportionate financial consequences for the landlord when deciding whether or not to make an order for dispensation: the statutory consequences of the failure to comply were an intrinsic part of the law relating to service charges, and there to be followed.

This decision should be seen as a warning to landlords to comply fully with the detailed service charge consultation requirements. This is particularly important in the case of major works, as non-compliance can result in a drastic reduction in the amount that the landlord can recover from the leasehold owners.

Conveyancing London and Crossrail Project Updates

Did you know that you can be kept up to date about the progress of Crossrail subscribe to the Crossrail Bulletin, keeping you up-to-date on the progress of the Crossrail project. This is very useful for those who conduct conveyancing in London.

Crossrail's contact details are as follows: Crossrail Limited | 25 Canada Square | London | E14 5LQ Switchboard: 0203 229 9100 | Helpdesk (24hr) 0345 602 3813.

Sunday, 20 December 2009

Consumer panel opens consultation on conveyancing referrals

The Consumer Panel of the Legal Services Board has announced that it is carrying out an enquiry into conveyancing referral arrangements. This is an issue about which there are strong views and conveyancers are urged to take advantage of this opportunity to make sure their views are taken into account. A copy of the Terms of Reference is available from the download section of the Council of Licensed Conveyancers website.

All conveyancing referral arrangements will be covered, whether or not they involve payment or fees, including non-monetary arrangements that are linked to the introduction of clients, such as the provision of free or below-cost services in exchange for the referral of other business.

The deadline for evidence is 5pm on Friday 26 February 2010. Licensed Conveyancers are invited to respond direct.

Wednesday, 16 December 2009

Changes to post completion conveyancing

For the last few years the mechanism for lenders to discharge registered charges has been by way of an electronic notification of discharge (END). This is to change early 2010.

The END has proved to be of great benefit to the conveyancing practices as conveyancers no longer have to chase discharge forms from lenders and manually send the forms to the Land Registry. In other words, it has assisted the post completion element of the conveyancing process.

The Land Registry has stated that hopes that those lenders who currently use the END system will sign up to the new portal, which will enable them to discharge mortgages using an electronic notice of discharge of a registered charge (e-DS1). Unlike an END, an e-DS1 operates as a stand-alone application for discharge, which does not require the conveyancer also to submit a separate paper submission.

Tuesday, 15 December 2009

Minimising risks faced by property owners as a result of property fraud

Background to property fraud

Identity Theft

The phenomenon of identity theft has assumed alarmingly high proportions around the world today .Advances in technology often fuel identity theft rather than prevent it , as more and more sophisticated means of identity theft are devised by fraudsters .

It is estimated that identity theft costs the UK economy approximately 1.7 billion Pounds per annum . In the UK alone there are around 120 000 cases a year of identity theft ( the worldwide figure is 10 million ) per year . Identity fraud is one of the UK's fastest growing crimes .

Property Fraud

The property industry is not immune against the scourge of identity theft . Mortgage fraud alone is estimated at 700 million Pounds per annum .

Land and buildings are usually the most valuable assets people own.Property can be sold or mortgaged to raise money . They are therefore attractive targets for fraudsters . Identity theft is often initiated by the fraudster by changing the legal owner's registered addresses at the Land Registry enabling the fraudster to gain control over the property ( 3 addresses can be listed ).Even if a fraudulent transfer of a property is held to be invalid ( which is by no means certain ) a mortgage registered against the property can still be held to be enforceable against the true owner ( Barclays v Guy ) , enabling the secured lender to attach the property for unpaid mortgage payments .Compensation by the Land Registry ( where applicable ) can be a long and frustrating process .

Properties which are owned outright are prime targets for fraudulent sales or re-mortgages .

Property fraud risk is at its highest in the following circumstances :

• following a divorce
• where the property is empty
• where the property is bought to let
• where the owner is absent or abroad
• where the owner is infirm or in a home

Sophisticated counterfeit technology helps fraudsters to obtain fake identity documents and gather information from the public register at the Land Registry . Anyone can inspect the Register , find out the name and address of the current owner and obtain a copy of registered title .

The conveyancing process

During the course of the conveyancing process the seller's conveyancing solicitor and the buyer's solicitor will call for proof of identity from their respective clients . However , because of the existence of technology copies of identity documents may not enable the solicitors to absolutely verify that the documents are genuine .

In the course of a transfer both solicitors will conduct certain searches . The seller's solicitor will carry out local authority searches and other searches as required . Near the end of the process the buyer's solicitor will conduct a search to ensure that no mortgages have recently been registered on the property or any of the parties have been declared bankrupt . These searches are unlikely to bring to light any identity theft or property fraud which may have taken place .

Despite increased efforts on the part of Land Registry and solicitors to minimise property fraud , under the present system the risk thereof remains . In some cases the fraudster is in fact aided and abetted by one of the professionals involved in the sale and transfer process e.g. estate agent , mortgage broker and even solicitor . A protective and preventative process needs to be devised and implemented to mitigate against or even hopefully eliminate instances of property fraud .

Sunday, 13 December 2009

Conveyancing Yorkshire Style

Even though the stamp-duty holiday, which has meant properties under £175,000 have been exempt from the levy, ends in the next couple of weeks, there has been some good news for those looking to get on the property ladder.

Yorkshire Building Society has this week launched a new range of mortgages for first-time buyers with a deposit of 15 per cent or more. Its three-year fixed rate of 5.84% with no fee is a market-leading deal and includes £500 cashback, a free survey and conveyancing. This is not only good news for fist time buyers but also lawyers on the Yorkshire conveyancing panel .

The "free conveyancing work" only covers basic conveyancing costs and does not cover search fees and land registry charges.

Thursday, 10 December 2009

Action over property misdescription

A businessman’s legal dispute with a developer in Reading has led him to set up a website for others legal assistance.

As reported in the Reading Post earlier this month, Roy Assersohn is suing Muse Developments over the purchase of six Chatham Place apartments.

Mr Assersohn, a former city editor with a national daily paper, has now set up a website to offer legal advice to people who believe they may have been a victim of a “property misdescription”. The Legal Investigation Services is www.property-misdescriptions.com.

Most members of the public believe if they have a problem over the purchase of property, their legal redress is with the conveyancing solicitor.
But often they should be taking legal action against the developer or in non new build cases the seller of a property.

Monday, 7 December 2009

Investigation into Conveyancing referral fees

Hot on the heals of the Law Society looking into the question of referral fees, commissions by conveyancers to estate agents and mortgage brokers are to be examined by the Legal Services Consumer Panel.

The Legal Services Consumer Panel will also look at other referral fees paid by lawyers to insurance and claims management companies.

Sunday, 6 December 2009

Property Fraud on the increase

The Daily Mirror in an article entitled How Mortgage Fraudsters Stole Our Mother's House last week highlighted a recent case where crooks have managed to sell a house from under the noses of the real owners - who warn the same fraud could happen to anyone.

In March 2009 a BBC reporter wrote to Land Registry, claiming to be the owner of an unmortgaged house in London. Using a bogus signature, the reporter asked for the property's correspondence address to be changed to Liverpool. Land Registry wrote to both addresses confirming the change to be made in 21 days. The owner was known not to be resident at the London address and so no objection was raised. Having been successful it would have been left open to commit a fraud.

Although not clear form the Mirror article, critical to many of these scams is the use of stolen identities. According to many conveyancing solicitors specialising in the field, the key context for the problem was the dash into deregulation and e-commerce at the turn of the century.

“There was a view throughout the profession that the abolition of documents of title and reliance upon electronic records would contribute to fraud. And so it has proved,” Samson says. “All this information is open to view through the internet so a fraudster can see exactly who owns a property, assume his or her identity and then sell it.”

Purchase Conveyancing – The Danger Of Failing To Complete On Time

Years ago, a completion of a conveyancing transaction would take place in person with the buyer’s solicitor visiting the seller’s solicitor’s office to inspect all the documents before releasing the purchase monies. These days, however, provided the transaction is not complicated, completion takes place through the post.

Occasionally, problems may arise on completion and completion is delayed as a result or the transaction can even fail to complete entirely.

The contract will specify the date the purchase conveyancing transaction is due to complete. This date is agreed upon by the parties during exchange of contracts. The Standard Conditions of Sale , currently the 4th edition, provide for what happens if completion is delayed or if the transaction fails to complete at all. If for some reason the Buyer is unable to complete on time his Solicitor should notify the Seller’s Solicitor as soon as possible. The Seller’s Solicitor will serve a ‘Notice to Complete’ on the Buyer’s Solicitor (the costs of which are usually borne by the defaulting party and most contracts will include a special condition stating what these costs are) and the clock will effectively start ticking. The Buyer then has ( normally ) ten working days from the date of completion in which to complete the transaction. If the Buyer fails to complete at the end of the Notice period, he forfeits the deposit of 10% of the purchase price. If the deposit paid on exchange was less than 10% the Seller is entitled to pursue the Buyer for the shortfall. The Seller may also sue the Buyer for breach of contract and damages.

If the Buyer completes within the ‘Notice to Complete’ period then he is still liable to pay a daily rate of interest as set out on the front page of the Contract. The deposit, however, is not forfeited if the Buyer is simply late in completing. Sometimes, the Seller’s solicitor may include a special condition in the contract stating that if the Buyer is late in completing he is liable to pay for other costs incurred by the Seller as a result of the delay, e.g., bridging finance, removal costs etc. It is good practice and in the interests of the Buyer Client if the Buyer’s Solicitor strikes through such a clause when approving the draft contract. If the Seller’s Solicitor does not agree to the clause being removed or modified, the position must be clearly explained to the client as they will find themselves paying rather more for failing to complete on time as opposed to a client whose contract does not include such a clause. This special condition is sometimes seen in contracts where there is a chain and solicitors may not wish to delete it if it appears in each contract in the chain.

The Standard Conditions of Sale state that completion must take place by 2.00pm on the day of completion. One can often find a conveyancer or solicitor insert a special condition in the contract varying this time to make it earlier. The Seller may have a mortgage to pay off which means that the lender will need to receive the redemption monies by 3.00pm or thereabouts to treat the mortgage as having been redeemed on that day. For this reason the time for completion is often brought forward to midday or 1.00pm. This should be taken into account by the Buyer and his client. If the Buyer is relying on mortgage finance and/or there is a chain involved then his Solicitor may wish to request the mortgage funds the day before completion to ensure there are no delays in sending the purchase monies to the seller’s solicitor. Solicitors should always advise their Buyer clients to send the completion funds for the purchase of the property, to their solicitor, at least a day before completion to avoid the risk of completing late.

If the Seller is the defaulting party and completion is delayed, the Seller must pay a daily rate of interest to the Buyer as stipulated in the contract. If the Seller fails to complete within the ‘Notice to Complete’ period, the Buyer may pursue him for breach of contract.

Delayed completion can therefore be extremely costly for the Buyer and the danger of failing to complete on time should be clearly explained to the Buyer client beforehand in the form of clear, written advice, especially where the Standard Conditions of Sale have been varied.

Other popular conveyancing sites include :

Lease Extensions Hackney
Find a solicitor on the Nationwide Conveyancing Panel 
Transfer of Equity Conveyancing 

Friday, 4 December 2009

China requires UK conveyancing protection

Bank of China has this week become a member of the CML setting out their conveyancing requirements through publishing their Part II requirements.

For those not familiar with the CML Lenders Handbook, I should explain that The Lenders' Handbook provides comprehensive instructions for conveyancers acting on behalf of lenders in residential conveyancing transactions. Part II details each lender's specific requirements.

At first glance there is nothing too unusual in the Bank of China’s Part IIs. However I remain perplexed by Section. One of the Part II questions is “Contact details if you need to be notified when the seller does not have legal representation”. Bank of China's response is : We do not allow licensed conveyancers to act for the Bank. Therefore, this section in n/a.

Can anybody please translate this for me ?

Will the Flood Risk Regulations 2009 affect Conveyancing ?

The well timed The Flood Risk Regulations 2009 (FRR 2009) will come into force next week on the 10 December 2009. The FRR 2009 transpose Directive 2007/60/EC on the assessment and management of flood risks (the Floods Directive) into law in England and Wales.

The Regulations require lead local flood authorities to, amongst other things, prepare preliminary flood assessment reports, identify flood risk areas, prepare flood hazard and risk maps and prepare flood risk management plans in relation to each flood risk area.
It will be interesting to see whether as a result of legislation and greater information conveyancing lawyers being required to carry our further checks. I am anticipating that at some point within the next couple of years the CML Lenders Handbook will be developed to include a requirement for further investigation into flood risk.