About CQS Conveyancing

Situ stirred things up last week  with a report  that said conveyancing lawyers are moving too slow to meet increased demand from buyers.  A failure to recruit has left many conveyancing departments are understaffed, causing a delay in agreeing completions and heaping frustration upon buyers and sellers, says the property company launched by the leaders of five major agencies in the West Midlands. And while they may be correct, another reason conveyancing is slow is that a deal gets stopped in its tracks when it’s discovered the buyer’s lawyers  aren’t on  the lender’s conveyancing panel. Red light. Do not pass Go. Agents have told Lexsure that more than 10% of their pipeline is slowed down significantly by the buyer having to appoint new lawyers as they discover that their lawyers are not on the panel (or having another lawyer appointed by the lender check the work with a view to protecting their interest). This is something estate agents should be check...

Working in risk management and compliance often brings me to meetings with underwriters and claims handlers and discussion of cases and upgrades to our checklists. Out of one of those recent meetings comes the following sorry tale,  told by an underwriter of an expensive claim resulting from a particularly inexpensive conveyancing fee: Following the breakdown of her previous marriage,  Mrs. K, and her new partner decided to buy an apartment.  She already owned a house jointly with her estranged spouse. Her proposed lender on the new apartment, as one might expect, required her release from her current mortgage with her soon-to-be ex-husband by way of   Transfer of Equity .  Mrs. K asked her solicitors (who were also dealing with the new purchase) to advise on  the Transfer of Equity for which they charged less than £250 inc VAT.     What could go wrong? Mrs. K’s solicitors didn't explain that not only did the Transfer of Equit...

Lender Panels are like London buses at the moment. Nothing for a while and then three come along at once.   Hot on the heals of the Santander and Lloyds conveyancing panel  West Bromwich have announced the launch of a new panel as firms will be invited to apply through an online portal designed and operated by LMS. This is yet another body-blow to CQS as lenders are taking tighter control over their conveyancing panels rather than relying on the Law Society kite mark  According to on-line magazine Mortgage Introducer the new West Bromwich conveyancing panel and portal will allow the society to provide assurances to its members that all appointed conveyancing firms are credible, reliable and safe as each are subject to detailed and rigorous membership criteria and checking. Huw Lewis, sales and marketing Director at LMS, said: “There has clearly been an increasing demand for a service of this nature and already we’ve seen a very positive response from the...

Research from TSB shows that around a quarter of first-time buyers are failing to take stamp duty costs into account when putting in an offer on their new home. But the oversight is not limited to FTB's. Existing homeowners fail to factor in the stamp duty, with around 14% of those buying their second or third homes also failing to include the expense in their financial calculations. Stamp duty can be expensive. TSB reveals that the average amount paid for stamp duty is over £5,000, equivalent to around 10% of the average deposit put down for a house purchase. For first-time buyers, stamp duty accounts for as much as 15% of the deposit, on average. In the new regulatory world of 'managing client's expectations' it is essential that conveyancers do not take for granted that a buyer has calculated the relevant stamp duty. 2023 Update: Requirement 5.15 of the 2022 CQS Core Practice Management Standards provides that firms must have a “a procedure for ensuring that th...

Yesterday's Sunday Times may bring welcome news to conveyancers in the short term but may be pouring fuel on an already overheated property market. Such reckless and dangerous behaviour should be expected of Ozzy Osbourne rather than George. Here’s the start of the Sunday Times story: The Help to Buy scheme, designed to help people get on to the housing ladder, is likely to be extended in this week’s budget. George Osborne is expected to frame his budget around improving the lives of working-class voters in marginal Conservative seats by helping them to buy their own homes and pay less tax. It goes on to note the chancellor is tipped to increase the personal tax allowance to £10,500 and to extend the Help To Buy scheme beyond 2016. Dirty deeds, done dirt cheap? Let's not kid ourselves. The move is not some subtle attempt to start a 'conveyancers for conservatives' campaign but rather a flagrant example of the Tories' using taxpayers' money in an attempt ...

This winter’s rains and flooding have pushed floods to the forefront of consumer concerns when buying a home. In a  recent BSA survey, half of those polled said that the risk a property might flood was an extremely important consideration, higher than the more traditional factors of a property’s location (49%) and neighbourhood (44%). This concern stands in contrast from what I’ve taken away from recent conversations with search companies which indicate that flood searches are only being carried out in about 50% of conveyancing transactions. Whilst there is no specific requirements in the CML Handbook or BSA Mortgage Instructions to carry out flood searches, the winter’s harsh reality and consumer sentiment lead my to expect lenders will start making changes in the near future. Some of the more recent changes - such as the HSBC change relating to Japanese Knotweed - are driven by new factors that can impact the resale value of the property. The  BSA survey showed a si...

The second part of Client Care 101 illustrates the importance of what you say in your retainer letter or in your ROT (or preferably both). Solicitor Justin from firm ABC receives a call from Mr. Green who asks for a quote on a purchase. During the conversation Mr. Green talks about how it is his dream home but requires a lot of building work as they are intending to carry out a large double storey side extension. Mr. Green mentioned that his advisers were in discussions with the council and had already had plans drawn up. Justin assumed therefore assumed that Mr. Green had an architect or planning expert on the case. Justin was proud of himself in winning the instruction  and sent Mr. Green the standard client care letter. The purchase went through smoothly. But, imagine Justin’s surprise when six months later Mr. Green came back to him complaining that planning permission has been refused arguing that he would never have bought the house had he known that planning permiss...

The Lloyds Banking Group - via Halifax- are offering (on qualifying mortgage applications made between 4 March and 6 May 2014 inclusive) an incentive relative to first time buyers. The offer repeats one that ran for part of last year. The Halifax said that last year, this offer helped 14,000 borrowers. According to Lloyds they will pay a sum equal to the Stamp Duty Land Tax where the purchase is in the 1% SDLT Band (over £125,000 - £250,000) and a £250 cashback where the purchase price is below the 1% threshold (0 - £125,000). There is no incentive being offered for purchase prices exceeding the 1% band. Lloyds have stated that the SDLT incentive payment will be made via CHAPS to the lawyer within 7 -10 days of the completion date. The problem here is that if the solicitor is relying upon the incentive payment to pay the Stamp Duty then that could result in the Stamp Duty not being paid until 10 days after completion which would cause difficulties. In the circumstances the best ...

The following statement was issued yesterday by the Law Society of Scotland to Scottish Solicitors with an interest in conveyancing.  Dear colleague I am writing to you about a serious and developing issue which is important for all firms carrying out residential property work.  I have written separately to all cash room partners, asking them to pass this information to those members within their firms which work in conveyancing. Last autumn, we were advised by the Council of Mortgage Lenders (CML) about a new conveyancing panel management solution facilitated by a company called Decision First. Decision First will provide a "gateway" between solicitors and banks involved in the scheme for the purpose of panel management.  The objective is to help lenders streamline the panel management application process for the benefit of both solicitors and lenders. Decision First has now developed a single interface called 'Lender Exchange'. This system will allow panel ...

Let’s call this lesson “Client Care 101”. It begins with the letter you send to clients at the beginning of a new instruction. Although not a regulatory requirement, lawyers are obliged to advise clients about complaint procedures, etc.  Retainer letters have been best practice for years now - although, much to my surprise, some firms open files even if the letter is not countersigned. Many firms will have their standard letter or terms checked by a risk consultant often being lulled into a false sense of security in thinking that this document need not be changed until the next time the risk expert takes a look at it. But beyond the basics, the retainer letter should be a more sophisticated tool. Unless you have a separate sales team, the likelihood is that as a conveyancing lawyer you will have at least some involvement in winning instructions or requoting an existing client. And chances are that you will talk about the the sale or purchase process and the virtues of reta...

There’s a buzz growing around the effect on house prices of slow broadband. The Telegraph weighed in  last week, claiming that s low broadband wipes 20% off house prices.   The article led Darlington’s solicitor James Swede to blog that “given the apparent importance and value of an internet connection, if a buyer’s solicitor does not make an enquiry about that (broadband speed), it is far from inconceivable that he or she could be accused of professional negligence, especially given the research published above.” Search website Rightmove adds a broadband speed checker to all of its listings alongside factors such as quality of local schools and transport links. And estate agents say broadband speed is so vital that buyers are walking away from a purchase if they discover that superfast speeds are not available in that area. Lenders will not want the find that they repossess a property only to find that there is a 20% reduction due to poor broadband. Anothe...

Have you ever been tempted to look at land registry data to check how many clients had sold their properties in the last few years and not used your services? That may seem like a futile endeavor as the cow has left that barn... Why give yourself the aggravation? I suspect that most lawyers convince themselves that a client did not return purely because of price. After all, conveyancing can be purchased over the internet for under £100. Alternatively, one may blame the estate agent as having strong-armed the client into using their preferred lawyer in return for a brown-paper envelope.   In fact, if a client uses a different lawyer for their next transaction it is with the intention of finding a ‘better’ lawyer.   I have no doubt that there's a place in the conveyancing market for the “cheap-enough, good-enough” alternative, but I would like to think that sustainable growth and long-term loyalty come from being better. If your conveyancing service doesn't measur...

Lloyds Banking Group has warned brokers that the increase in paper work associated with the Mortgage Market Review changes may increase the risk of fraud and they need to remain vigilant. In the same way that brokers are faced with new administrative burdens the same is also true of conveyancers who in recent times face burdensome compliance obligations  and ever changing CML Handbook requirements . All this at a time of increased volume as the UK property market bounces back to pre-recession levels. Criminals are stealing identities and using false documentation to take out loans using the victim's name and details. Also on the rise are cases of vendor fraud where the fraudsters have successfully sold other people’s homes. Their "modus operandi" is to get access to properties first by renting them and then acquiring fake documents in the real owner’s name and attempting to sell the flat or house. Only this weekend I was talking to an owner of an estate agency i...

Lloyds has upped the ante for its conveyancing  panel members and The Law Society of Scotland doesn’t like it. What Decision First, the Lloyds Conveyancing Panel Manager, has done is made the simple act of acting for any mortgage lender in the Lloyds Banking Group an assumed acceptance of the lender’s Terms. Only nonacceptance required to be communicated along with return of any instructions. In other words, you’re in until and unless you actively opt out. The Scottish Law Society is concerned that one of the conditions provides a right to Lloyds Banking Group to inspect all conveyancing documents and files relating to transactions carried out on behalf of any lender within the Lloyds group. The Society's concern is that this wording may set up a contractual obligation that might not otherwise apply. If a solicitor was to refuse access to all files where this term has been accepted there might be a difficulty in defending an action for access to the files either on a co...

What should otherwise be a simple ”yes-or no” question instead stands as just the latest example of how lenders use the CML Handbook to heap more complex and onerous obligations on their conveyancing panel lawyers. But, since nothing is ever simple when it comes to CML Handbook compliance , the question “Does the lender want to receive environmental or contaminated land reports?” is the jumping off point for HSBC to shoehorn in obligations that encroach upon what would normally expect of a surveyor.  So, rather than “yes” or “no”, HSBC’s answer reads as follows: Japanese Knotweed - You will need to advise the Bank if you become aware that there may be Japanese Knotweed on or near the property and if not already done so we will instruct a valuer, who will follow the RICS guidelines to assess the risk where the weed has been identified on or near the property (generally within 7 metres) . Where Japanese Knotweed is identified we will only lend if there is a treatment sc...

A battle is brewing as three lenders -- Lloyds, RBS and Santander -- are telling their conveyancing panel solicitors that they are required to register with the the respective bank’s panel management service via the Lender Exchange platform run by Decision First, the CML's chosen supplier. It seems like deja’ vu of HSBC’s conveyancing panel cull in 2012, which ended with the lender backtracking. Now, the Law Society is challenging the CML and the Decision First process in the strongest terms. With battle lines being drawn, the Law Society is building what is shaping up to be a powerful campaign. In a recent communication to members, the Law Society has advised that it’s planning to raise its concerns about the Lender Exchange with the Government and mortgage companies. A briefing document has been prepared which states: "We are engaging with the CML and lenders to express our concerns about the lack of transparency, of published objective criteria, and of an appeals proces...

Bridging packager Voltaire has just released a lease extension product for properties in London requiring a loan at a minimum of half a million pounds.  The unique offering is part of a joint venture whereby the borrower is obliged to use the experts on the lender’s surveyor and conveyancing panel. In an interview with online magazine bridgingandcommercialdistributor.co.uk , Voltaire director Andrew Hosford said:  "We have been approached by a number of clients requiring finance for extending leases or purchasing property with short leases, with a view to extending. The structure for this is complicated and we decided that pulling together a 'dream team' of lender, solicitor and surveyor was the best way to efficiently assist our clients. The firms that we have partnered up for this lease extension product are the best in the business and we are delighted to be working along-side them on what is clearly a high demand area, particularly in prime London."

Monmouthshire Building Society have made a number of recent changes to their CML Part 2. In particular the Society has clarified requirements in terms of time limits for planning and building regulation consents. The Society have now made it clear to it’s conveyancing panel that no time limit should be applied in respect of conservation areas and listed buildings. No investigation is required in respect of both planning and building regulation consent after 10 years has elapsed. If the nature of the breach is such that indemnity insurance is recommended as a suitable protection this can be arranged on our behalf of the Society as long as they are advised of the situation. Alternatively if the advice is that the breach does not require indemnity insurance and is outside the statutory limits for enforcement action, the conveyancer may proceed on that basis providing the borrowers are aware of and accept the risk. Other important changes were made to the CML Part requirements. Notab...