Thursday, 28 January 2010

Market Harborough Building Society publish Conveyancing Documentation

Market Harborough Building Society ( a CML Member ) have today published on their web site all of the documents that a conveyancing solicitors will require in order to progress a standard mortgage transaction with the Society .

These conveyancing documents include :

Mortgage Terms and Conditions

Schedule of Documents of Title

Building Society Agreement & Undertaking

Mortgage Deed (Draft Version)

Mortgage Deed

Certificate of Title

Borrowers' Fees for Additional Services - Fees for Additional Services

The documents listed above are only for the use of Solicitors, Licensed Conveyancers (in England & Wales) and Independent Qualified Conveyancers who have been instructed by the Market Harborough Building Society to act for the Lender.

Wednesday, 27 January 2010

Argie Bargie over Home Information Packs

In response to a question from Conservative MP David Amess on what methodology would be used to use to evaluate the effectiveness of the Home Information Pack programme, Communities and Local Government Minister Ian Austin was involved in heated argument. The wording of the debate ( reported in Hansard ) makes interesting reading, so I thought I would share it with you :

Mr. David Amess (Southend, West) (Con): What methodology his Department plans to use to evaluate the effectiveness of the home information pack programme; and if he will make a statement.

Mr. Andrew Mackay (Bracknell) (Con): What methodology his Department plans to use to evaluate the effectiveness of the home information pack programme; and if he will make a statement.

Mr. David Jones (Clwyd, West) (Con): What methodology his Department plans to use to evaluate the effectiveness of the home information pack programme; and if he will make a statement.

The Parliamentary Under-Secretary of State for Communities and Local Government (Mr. Ian Austin): As my right hon. Friend the Minister for Housing said in response to a written question from the hon. Member for Welwyn Hatfield (Grant Shapps), we intend to evaluate the effectiveness of HIPs by updating the HIP baseline research report, which was published in January 2007. A copy of that report is available on the DCLG website.

Mr. Amess: Whatever methodology the Department intends to use, is the Minister aware that Southend estate agents, without exception, believe that although HIPs may have been introduced with the best of intentions, in practice they have not worked out at all well and have damaged the housing market?

Mr. Austin: I do not accept that at all. Despite a difficult housing market, evidence shows that HIPs actually speed up sales. I am not sure whether there is a branch of Connells estate agency in the hon. Gentleman's constituency, but its survey of more than 37,000 transactions showed that sales with HIPs go through an average of seven days quicker.

Mr. Mackay: Why is the Minister in total denial? Nobody whatever thinks that HIPs work, and it would be sensible for the Government to knock them on the head before the election rather than have that albatross around their neck. For our part we are delighted that they are not doing so, but it is in his interests that he should.

Mr. Austin: As always, I am very grateful for the right hon. Gentleman's advice, but I can tell him that thousands of jobs and hundreds of small businesses depend on the HIP process and 13,000 people have invested thousands of pounds in training as energy assessors. The Opposition need to explain why they want to put all those jobs and businesses at risk. He needs to tell all the people in his constituency whose livelihoods depend on the process why the Opposition want to put them out of work.

Mr. David Jones: The interim results of the updated baseline research report are not due to be published until this summer at the earliest. Given that no empirical evidence is therefore available to the Government about the impact of HIPs on the current housing market, why do they not listen to bodies such as the Law Society, which has said clearly that HIPs

"add a significant layer of costs for consumers but produce no discernable benefit"?

Mr. Austin: As a result of HIPs, more than 2 million home owners now have an energy assessment and recommendations in their energy performance certificate that can help them cut their fuel bills by hundreds of pounds and reduce carbon emissions. That is just one of the many benefits of the HIP process that we have introduced. I thought that tackling climate change was one of the big priorities for the new, modern Conservative party. So much, I suppose, for voting blue to go green.

Rob Marris (Wolverhampton, South-West) (Lab): I have to tell my hon. Friend that as a member of the Law Society of England and Wales, I tend to agree with it. We have to have energy performance certificates under European Union law anyway, and we would have the jobs because of that. Does he really think that for most people, a cost of more than £500 to save an average of seven days, according to the Connells survey, is money well spent? A lot of my constituents do not.

Mr. Austin: Obviously, I am very grateful to my constituency neighbour for his intervention on this issue. He is a great man, he really is.

Conveyancing Solicitors probed by SRA over mortgage fraud

According to the Financial Times today over 100 law firms suspected of mortgage fraud were investigated in 2009 as part of a crackdown on rogue solicitors resulting in increased interventions.

The figures just released by the Solicitors Regulation Authority reveals that the completed 106 investigations into firms where there was suspected misconduct in relation to mortgages or property.

Of these One Hundred and Six practices, 22 were permanently closed down. Twenty four cases have been referred to the police for investigation, and 30 cases have been referred by the SRA to the Solicitors Disciplinary Tribunal, which has the power to strike off solicitors.

The FT comments “There has been concern about rising levels of property fraud with the SRA’s own figures showing an increase in reports of suspected property fraud involving solicitors up from 85 cases in 2005 to 400 in 2009.”

In the 1980’s property fraudsters used corrupt or incompetent solicitors to help them carry out property fraud and it now seems that history is repeating itself. Mortgage fraud continued its steady rise in 2009. There were 31 cases worth £77 million in the year, compared to ten cases worth just £3.7 million in 2007 and 25 cases worth an estimated £36 million in 2008.

For the full story click here

Tuesday, 26 January 2010

New HIP report due in 2010

Grant Shapps has asked the Secretary of State for Communities and Local Government when the 2010 report on the effectiveness of the home information packs programme will be published; by whom the report is being produced; using what methodology; and at what cost.

As reported in Hansard John Healey’s response was “ We intend to evaluate the effectiveness of HIPs by updating 'The HIP Baseline Research Report', We are currently in the process of commissioning the study through the established contract tender process, so the timing and cost have yet to be finalised. I expect the interim results could be available in summer 2010.”

The HIP Baseline Research Report was published in January 2007.

Sunday, 24 January 2010

Landlord and Tenant Act 1987 and unfair service charges?

In the recent case of Morgan v Fletcher & others six leasehold owners (the "leaseholders") in a block containing of eight flats (the "block") applied to the LVT to vary retrospectively vary their leases.

The leaseholders argued that the service charge clauses in the leases were " not satisfactory" under section 35 of the Landlord and Tenant Act 1987 (LTA 1987). At the time of their application the total of the service charge proportions of all the leases amounted to 116% of the landlord's expenditure.

The landlord then went to vary the service charge provisions for the other two leasehold flats in the building, reducing the total service charge contributions for the building to 100% of the landlord's expenditure.

The LVT( rather logically ) adjusted the leases of the leaseholders to make the service charge contributions proportionate.

The freeholder appealed. The court allowed the appeal. It held that section 35 of the LTA 1987 was not intended to deal with unfairly disproportionate service charge provisions. It was only intended to deal with surplus contributions or a shortfall and not situations where the contribution amounted to 100% of the landlord's expenditure albeit the contribution proportions were unfair.

Even though the court the court expressed sympathy with the leaseholders, it could not retrospectively adjust their leases to rectify the unfair service charge since their circumstances operated outside the intention of the legislation. Accordingly the court was unable to interfere in the contractual freedom of the parties.

Conveyancers would do well to learn of of the difficulties when drafting fair service charge provisions, particularly where the individual flats are of disproportionate proportions.

Friday, 22 January 2010

New Chair announced by the Council for Licensed Conveyancers

The Council for Licensed Conveyancers ( CLC ) has this month announced the appointment of Anna Bradley as the new Chair of the CLC following a selection process overseen by the Appointments Commission. Ms Bradley’s appointment, will commence on 1 May 2010 for a period of four years.

Victor Olowe, CLC Chief Executive, said: “I am very pleased that Anna has agreed to take up this position on the new Council. I am confident that the CLC will benefit from Anna’s wide ranging skills and experience and we very much look forward to working with her to deliver better outcomes for consumers and other stakeholders”.

Following confirmation of her appointment, Anna Bradley said: “I am delighted to be taking up this new role at such an interesting and exciting time for both the CLC and the legal services market”.

Anna is currently Chair of Ofcom’s independent Consumer Panel having previously been Consumer Affairs Director of the Financial Services Authority (2002-5) and Chief Executive of the National Consumer Council (1999-2002).

Conveyancing solicitors urged to sign up to web portal

The Land Registry Direct system will be ending on 31 March 2010. The technology platform on which it is rests will cease to be supported, meaning that conveyancing services in Land Registry Direct cannot be developed further. The new home for the Land Registry business e-services is the Land Registry Portal, which uses the most up-to-date online technology to provide conveyancers and the public with enhanced services.

The Law Society, the CLC and the Land Registry are all encouraging conveyancing lawyers to sign up if they haven’t done so already. If conveyancers send in their application forms by 15 February 2010, then they will avoid the risk of losing access to their business e-services. If conveyancing firms require additional services such as Network Access Agreements and Lender Services, these are optional and can be applied for at a later date.

Thursday, 21 January 2010

Report on Back Garden Development Published

The final report of a study into the planning issues surrounding development on back gardens undertaken was published this week by the Department of Communities and Local Government.During the passage of the Planning Act 2008, the Government committed to carry out a review establishing the extent of development on back gardens.

Over the last 30 years, and especially during the recent housing boom, the issue of back garden development (sometimes known as ‘garden grabbing’) has become politically contentious.

Private gardens currently have no special status in planning law, other than as part of private amenity space and their development is treated, in principle, like any other land. Despite the recession which has muted demand for housing land, fundamental concerns about the supply of land to meet housing targets, are still ongoing.

In many situations the development on garden areas may be interpreted as entirely appropriate and there are many clear, definable benefits to such development. They reduce the need to extend development into the countryside, create new homes without the need for increased infrastructure provision, provide better utilisation of land in areas where people no longer demand large gardens due to life style changes and they may provide small sites appropriate for local developers who employ local people. For these reasons garden land development may add significantly to the housing stock in ways that are sustainable and which meet identified local housing needs.

There are of course arguments against over development on gardens. They may lead to increased building mass, loss of character, increased population density and associated demand on service provision and traffic generation. Environmentally, garden development can result in a loss of green space and soil sealing/paving over gardens; ultimately leading to loss of habitats and biodiversity and increased risk of flash flooding due to increased run off.

Historically Garden sites are normally regarded as ‘brownfield’ under the government’s land classification of previously developed land and are often favoured sites for developers as they are situated in established residential areas and often present less physical issues than brownfield sites that are, for example, old industrial and contaminated sites.

As a result of the Report , Housing and Planning Minister, John Healey, has announced that he will be strengthening national policy advice to make it clearer that garden land is not necessarily suitable for development and that decisions to stop building on it should be taken at a local level.

Could conveyancers be responsible for accuracy of seller's answers in Conveyancing Questionnaires ?

The issue of liability for misinformation within the PIQ ragged on this week with the Housing Minister being asked about the extent of an estate agents liability. If agents know that the answers were untrue, could the agent be in breach of consumer law?

John Healey suggests that Estate Agents may be liable as part of a reply to MP Robert Neill, who asked whether agents are liable for misleading omissions in PIQs under HIP legislation, and whether agents were responsible for checking the information.

The Housing Minister said they were not liable under HIPs law for PIQs, as long as the agent “believed on reasonable grounds” that the documents complied. No news there then !

The most interesting point that Healy raised was when he added: “An estate agent could be in breach of the Consumer Protection Regulations (CPRs) if he failed to act on information in the PIQ which he knew to be inaccurate or untruthful, because they are required by the CPRs to act in accordance with honest market practice and good faith.”

If the Housing Minister is correct in his interpretation of CPRs this could have greater implications than agents being sued for misinformation within the PIQ. If the CPR’s extended to information in the Sellers Property Information questionnaire or other conveyancing questionnaires then conveyancing solicitors and property lawyers alike could be held liable for misinformation where the lawyer know the information was inaccurate. The financial implication are far greater here than the losses resulting form an inaccurate PIQ.

Wednesday, 20 January 2010

The biggest SRA intervention of 2009 - Wolstenholmes

The SRA's intervention into the practice of Wolstenholmes, which began on Christmas Eve, was the biggest of 2009, according to the regulator. The firm, closed during the investigation, has offices in Cheshire, Manchester, Birmingham and conducted Conveyancing in London and throughout the UK .

Wolstenholmes was a multi disciplined practice offered a full range of services, including conveyancing, family, employment, personal injury, immigration, private client work.

An SRA spokesman said the practising certificates of five solicitors were suspended.

The Wolstenholmes website still boasts having completed more than 200,000 conveyances, with monthly transactions worth £175 million.

According to the site, the secret of the firm's success is explained by "two centuries developing our expertise, refining our knowledge, keeping our nerve during financial hardship and having the nerve to expand beyond all comprehension in a recession."

Tuesday, 19 January 2010

Property loans fraud results in Solicitor being struck off

An Irish conveyancing solicitor who engaged in fraudulent practices to obtain loans on properties, leaving a financial institution with losses of €1.25 million loss, has been struck off by the High Court.

According to, Mary Miley, formerly practising as Miley and Co Solicitors, Rathdrum, Wicklow, obtained money by pretending she was acting for a borrower called Mary Ann Dore, which was in fact herself using her married name, and used some €570,000 of that for her own personal benefit, the court heard.

The lender , Secured Property Loans Ltd is now looking to recover the funds and yesterday was successful in obtaining a freezing order over Ms Miley’s assets to the tune of €1.25 million. President of the High Court Mr Justice Nicholas Kearns agreed to a Law Society request to have papers referred to the DPP.

The High Court judge made an order that Miley should make restitution to those parties who are at a loss as a result of her behaviour. The court also ordered that she surrender her passport .

Sunday, 17 January 2010

Council of Mortgage Lenders calls for abolition of Stamp Duty

The CML in recent report expressed it’s belief that fundamental reform of stamp duty is necessary. It states that it regards Stamp Duty as a tax that discourages labour mobility, and with it’s “ tier ” structure has the effect of causing transactions to “bunch” just under each of the tax thresholds.

The CML state “ While abolition would be the best option, a move to a graduated structure would be an improvement on the current system, even if done on a cost-neutral basis. While the temporary concession was welcome as far as it went, it is disappointing that the government has not sought to implement this desirable reform of an anachronistic tax”.

Mortgage Fraud Booming Like Never Before

BDO, has come up with some frightening figures on mortgage fraud, against a backdrop of soaring UK losses to fraud in 2009 (over £2 billion) across all sectors. It predicts worse to come.

In 2009, mortgage fraud accounted for 18% of all reported fraud and 27% of fraud in the UK finance and insurance sector.

Simon Bevan of BDO commented rather frankly: “It may have become more difficult for the person on the street to secure a mortgage in the UK, but the mortgage fraud industry is booming!”

Mortgage fraud often works through a large loan being taken out on an overvalued property with a corrupt buyer, valuer and/or conveyancing lawyer working in collusion.

The same group will then apply the scam to a portfolio of properties, meaning that the fraud can escalate to large amount.

BDO warns of “a tidal wave” of fraudulent borrowing that has only just beginning to appear, particularly through the use of over-valued properties as security for mortgages .

Worryingly, he suggests many of these frauds are yet to be recognised by the banks, which still have them classified as non-performing loans.

Saturday, 16 January 2010

Land Registry launches new Flood Risk conveyancing search

Adopting some of the latest IT, the Land Registry has recently combined its data with the Environment Agency's flood data to produce its new Flood Risk Indicator.
Homebuyers can use the Flood Risk Indicator to access clear and reliable information about the possible risk of flooding.

Customers can purchase Flood Risk Indicator on-line via the Land Registry website. After inputting address details, home buyers will receive a Flood Risk Indicator result in a couple of minutes – stating whether a specific area of land is likely to experience flooding. Customers can instantly download their result, which indicates whether or not their property is affected by a flood plain. This will assist in being able to obtain building insurance. Time will tell whether mortgage lenders will require this search to become a compulsory search within the conveyancing process.

Flood Risk Indicator raises customers' awareness of flooding, and helps them plan and prepare as a result of being better informed about the possible risks. Flood Risk Indicator is available now in the Find-a-Property section of the Land Registry website.

Advantages of land registration in the UK

Land Registration under the 2002 Land Registration Act supports land and home ownership by:

• ensuring state-backed registration, giving greater title security
• protecting against the possibility of losing title by adverse possession
• indemnifying home owners under s.103 and Schedule 8, Land Registration Act 2002 against any loss if they are deprived of their state-backed title on a rectification of the register of title for a specific property
• introducing certainty and simplicity into conveyancing
• setting out, or referring in the register to, all the rights that benefit and affect the title other than certain overriding interests
• showing the general extent of the land in each title by means of a title plan
• providing that capital can circulate freely in the economy by making land readily available as security
• making large holdings of land and portfolios of charges readily marketable.

Wednesday, 6 January 2010

Jack Straw agrees meeting to discuss justice for Wolstenholmes victims

In the House of Commons today Cheadle MP Mark Hunter challenged the Secretary of State Jack Straw to reassure all those affected by the abrupt closure of Manchester Conveyancing Solicitors Wolstenholmes that their money and documents were safe.

Jack Straw shared the concerns and agreed to meet Mark to discuss the issue.

Mr Hunter told the House that he had been contacted by a number of distressed local residents and people from all over the country that currently have documents or money held by the firm.

In Justice Questions in the House of Commons, Mark asked Jack Straw to ensure that the concerned residents were fully compensated where appropriate. Jack Straw replied and agreed to meet with Mark to discuss the issue further.

Commenting, Mark Hunter MP said: "I'm very concerned about the sudden closure of such a long-established business. I've already heard from a number of constituents who have money and/or documents lodged with Wolstenholmes and who are worried about the consequences.”

"I'm advised by the SRA that for those who fear they have lost money, it will be dealt with by the solicitors indemnity insurance or the SRA Compensation Fund. People affected should contact DWF on 0161 603 5044.”

"My message is clear: I am determined to help solve this problem. I will be meeting with Jack Straw as soon as possible, I have already been in touch with the regulatory authority, and I will fight to ensure justice for all those affected by this unexpected closure."

On 30th December the news broke that Wolstenholmes, established in 1818, had been closed down by the Solicitors Regulation Authority (SRA) and that five solicitors had their licences suspended amid claims of dishonesty and account irregularities.

Sunday, 3 January 2010

BSA releases their conveyancing requirements

The BSA’s Mortgage Instructions launched today provide a full set of conveyancing instructions for conveyencers acting on behalf of BSA Members and their subsidiaries in residential conveyancing transactions. The Instructions come into full effect from 1 January 2010. The conveyancing Instructions are being used by 31 lenders including 27 building societies.

The BSA Mortgage Instructions comprise of two parts ( as is the case with the CML ) : a core set of mortgage instructions; and specific requirements setting out individual lenders’ policies.

The FAQ's on the BSA site include the following question and answer:

How does the introduction of early completion by the Land Registry affect the use of the instructions in England and Wales?

We have considered the impact of the Land Registry bringing in early completion and do not feel that the change requires any significant amendment to the instructions. This is because early completion does not affect the overall process for buying and selling a home – though it may impact the sequence in which some events happen.

The changes will not alter the requirements set out in paragraph E.27 of the instructions which require the conveyancer to register the mortgage as a first legal charge at the Land Registry.

The Land Registry has confirmed that “completing the applications to register the transfer and new charge subject to the existing charge would not appear to affect the obligations of any party in relation to that existing charge.

Early completion will not prevent the new charge taking effect as a first legal charge; it can never become a first charge until the existing charge is discharged. This is so whether or not the new charge is entered in the register. The entry of the new charge under early completion simply protects the priority of that new charge as against any other interest whose priority is not protected at the time of registration.”

More information on this can be found on the Land Registry's website.

Friday, 1 January 2010

London Conveyancing firm shut down over alleged dishonesty

This morning’s Times contains an article Solicitors Regulation Authority closes down law firm Wolstenholmes. The article reveals that five solicitors have been suspended after allegations of dishonesty involving hundreds of thousands of pounds of clients’ money.

The Solicitors Regulation Authority has started an investigation into the activities of Cheshire-based Wolstenholmes, which was established in 1818 and carries out conveyancing in London, Manchester and Birmingham.

Customers have bombarded the forums of websites such as Money Saving Expert with complaints about the way the company takes £300 as a deposit and then allegedly does not return calls.

One client of the conveyancing firm has reportedly told the BBC that she had been left living in a caravan with her children. She claimed that the £445,000 she had transferred to Wolstenholmes, nearly half of which was her own money, had been frozen.