Friday, 26 February 2010

Recent OFT Report on Estate Agents seems to please no one !

Conveyancing Solicitors :

Conveyancing Solicitors have expressed the disappointment that the OFT did not propose the regulation of estate agents in its home buying and selling.
Commenting on the report Paul Marsh, Law Society property spokesman, said: ‘We’d have liked to see them recommend that regulation of estate agents was put in place to create a level playing field with solicitors, who are very heavily regulated.’

Strange that government deems that solicitors must be heavily regulated by independent bodies and cannot regulate themselves, despite the fact that satisfaction surveys say they do a good job.

Estate Agents :

Peter Bolton King, chief executive of the National Association of Estate Agents, added: ‘Once again the OFT has categorically failed to see that better regulation of the home buying and selling market is required… it is disappointing that the OFT has not thought it appropriate to acknowledge that a robust and appropriate level of consumer protection is needed.’

‘The NAEA would like to see a greater level of regulation to ensure that professional, qualified estate agents are not confused with agents that, all too often, fail to meet the basic professional standards we would expect from our members,’ he said.

Monday, 22 February 2010

When extending a “priority search” is not enough !

One major difference between the BSA instructions, introduced last month, and the CML Handbook is additional clauses dealing with the registration of mortgages where a priority period has expired.

Clause E.30 states “If you cannot register our mortgage within the priority period afforded by your Land Registry Search made before completion you must register a unilateral notice to protect our position. Simply renewing your original Land Registry Search is not acceptable.”

Clause E.31 states:

“If registration at the Land Registry has not been completed within three months from completion you must write to us explaining the reason for the delay and keep us
regularly informed of the position until registration has been completed.”

The above BSA clauses are aimed at dealing with the problem of mortgages not being registered within priority periods: a major cause professional negligence in the field of conveyancing.

The usual situation is that a conveyancing solicitor acts for a buyer on a property purchase and applies to the Land Registry for an official search with priority, but problems further down the chain delay completion. The solicitor isn’t able to register the mortgage or transfer within the 30-day priority period, so he submits a new search application and gets a further 30 days. No problem, right? Wrong! Very Wrong …negligent in fact !!

It is a common misconception among conveyancing solicitors that priority periods can be extended – this is not the case! Whilst you can obtain a new search period, but this will not extend the original one. If a third party has made a search or lodged an application in the intervening period, that third party’s interest may have priority. Some lawyers argue that the misconception of priority periods being renewable is not helped by Land Registry officials routinely misleading solicitors by suggesting that priority periods can be ‘extended’ when this just isn’t possible. Even the new BSA instructions refer to ‘renewing’!

The Law Society has been very vocal in it’s opposition to this particular new BSA requirement describing the BSA obligation to register a unilateral notice as ‘a major headache for conveyancers’ and a ‘heavy handed approach for resolving problems with late/out of time registrations’

The big question is who is going to have to stump up the cost for this additional work.

Thursday, 11 February 2010

Leeding the way in making conveyancing tougher

Have any conveyancers noticed the change in conveyancing requirements for Leeds Building Society ?

Having received a notification from LENDERmonitor as to a change I thought I would share it with you as yet a further example of how lenders make conveyancing increasingly difficult and complex.

Leeds have made two changes. The first relates to monies received from third parties paying monies towards the purchase price and the second relates to building insurance. The changes are as follows :

Old : 5.9 - Contact point if borrower is not providing balance of purchase price from funds/proposing to give second charge.

New : 5.9 -If the balance of the purchase price is being paid wholly or in part by anyone other than the borrower, you must provide us with a declaration of this amount, that such an amount is not repayable and that the party providing this amount will not acquire an interest in the property. You must also ensure that clear bankruptcy searches are carried out against the borrower and all parties contributing to the balance of the purchase price.

Old : 6.13.5 - What is the maximum excess you will accept on buildings insurance policy? a £250.

New : 6.13.5 - We will accept up to a limit of £1,000 upon written receipt of the borrowers acknowledgment of their obligations. Any excess of £1,000 must be referred to the Mortgage Lending Department.

Both changes require an additional declaration to be drafted and entered into by the relevant parties. No precedent has been supplied or suggested. These changes will undoubtedly result in one of three things happening ( depending on the conveyancing firm ) :

1. The conveyancing lawyer will not realise this change of requirement and breaching their obligations to the lender
2. The conveyancer will deal with the additional work and absorb the cost
3. The cost of the additional work will be passed on to the client who will no doubt feel aggrieved in thinking that they have been overcharged ( not fully appreciating that this is a cost that could not have been anticipated by the lawyer at the point of giving out the conveyancing quote )

Thursday, 4 February 2010

Barny Armey needed to enforce planning

The advice by the Court of Appeal in their decision against the council in Welwyn Hatfield Council v Secretary of State for Communities and Local Government was that local planning authorities need to look carefully at the inside of buildings, not just at the exterior, when determining whether a building has been constructed and used in accordance with planning permission.

In this fascinating case, the Court of Appeal allowed a landowner's appeal and held that the landowner was entitled to a certificate of lawfulness even though landowner confirmed in his evidence to the planning inspector that he had deliberately deceived the council when applying for planning permission.

Having obtained planning permission for a hay barn, a landowner constructed a building that externally looked like a barn but which was internally fitted out as a dwelling house. The landowner and his wife lived in the building for four years before applying for a retrospective planning permission.

Is it really reasonable to expect the local authorities at a time when they are expected to cut costs to have an army of planning officers to be knocking on peoples doors to check that works comply with planning permission. Surely individuals need to take some degree of responsibility ? Am I alone in my thinking here ?

Law preventing pulling of rug from under tenants feet

Last week saw the second reading, in the House of Commons, of The Mortgage Repossessions (Tennant Protection ) Bill. The proposed legislation aims to give private tenants greater protection from repossession if their landlord defaults on the property mortgage. If passed it is believed that the Bill would close a legal loophole causing problems for at least 3,000 tenants a year.

The Bill:

- Gives courts the power to suspend (for up to two months ) the repossession of a property in cases where the mortgagee had rented it out without informing the mortgage lender
- Requires the lender to give notice, at the property, of the proposed execution of the possession order.

The Bill, which has cross party support, also has the backing of the three national landlord organisations as well as the Citizens Advice Bureau, Shelter and Crisis, and is likely to become law in the next few months. The most vociferous opponent to the Bill is the CML