About CQS Conveyancing

“A number of rated insurers have withdrawn from this segment and the gap has been filled by unrated insurers, some of whom enter for a few years before withdrawing or, worse, becoming insolvent. This is extremely detrimental to the profession”.   Des Hudson, August 2013: "The fact that an insurer is unrated does not of itself mean that they are risky – some well-established, trusted insurers have chosen not to seek a rating".   Des Hudson, April 2014:     To be fair to Mr. Hudson his critical comments about unrated insurers just nine months ago coincided with the launch the Law Society "rated" PI scheme.  Could facing facing a 20% drop in Law Society membership rolls as lender panels require firms to have 'A'-rated insurance, combined with the threat that the SRA may ban unrated insurers, have changed his thinking?

News  that  Britain's biggest banks and building societies could be forced to demonstrate their ability to withstand a house price slump of roughly 35% got us thinking about the repercussions of that scenario for conveyancing firms.  Consider the aftermath of that scenario for conveyancing firms: Quite apart from the strain on the financial stability of a conveyancing firm in a housing slowdown, could firms cope with high levels of repossessions which will inevitably result in lenders looking to pursue lawyers for losses? Would a firm be confident if 100 of their cases were reviewed for compliance with CML Handbook provisions? With all they have at stake, perhaps conveyancers should be stress-testing themselves.

Lenders such as RBS, Direct Line, Virgin One and National Westminster Bank have scaled back from their previous commitment to 'endeavour to submit an Electronic DS1 to HM Land Registry within five working days'. The CML Handbook Part 2 change has resulted in the lenders stating 'wherever possible we will endeavour to submit an Electronic DS1 to HM Land Registry within a reasonable timescale.' To see all the recent changes (13 lenders published changes yesterday) you will need to sign up to LENDERmonitor .

Teachers Building Society have changed their BSA Mortgage instructions to require more post completion documents from their conveyancing panel.  The following documents are now required by the society: TID, the Original Mortgage Deed (with the Solicitors Certificate completed) If applicable Consent to Mortgage forms, NHBC documentation and Indemnity Policies.  With regard to Leasehold properties we the Society requires a copy of the Lease, Notice to Freeholder. With regard to Buy to Let properties they  require the Assured Shorthold Tenancy Agreement and the Undated Rental Mandate. Standard documents for the Teachers Building Society conveyancing panel are available from www.teachersbs.co.uk/mortgages/solicitor-pack

Most of my meetings with conveyancing partners or compliance officers centers on one big, game-changing question: “What is the one thing that we can do to make a real difference to avoid a claim?” They are quick to acknowledge that there is room for risk mitigation and recognise that it is an almost-impossible task to keep up to date with lender requirements without the assistance of technologies such as COMPLETIONmonitor . Who in the world of conveyancing does not recognise that it has become a more complex and risky business over the last 20 years? This gap between knowing the risks and not addressing them is usually rationalise by their exasperated response that there isn't to change processes and, often, the team doesn't want to embrace change. The consequence is that the same pattern of behaviour and results continue. The evidence: conveyancing has represented more than 50% of claims for the last 20 years. If anything, the percentage continues to rise. Marshall Goldsmith...

Word today  from the BBA that mortgage approvals in March were up 43% from last year. Gross mortgage borrowing of £11b was up 38% in the same comparison. To no one's surprise, t he main high street banking groups account for some 2/3 of all UK mortgage lending outstanding, based on the Bank of England’s ‘lending to individuals’ data. They include the six largest UK retail lending groups: Barclays, HSBC Bank , Lloyds Banking Group, Royal Bank of Scotland Group, Santander UK and Virgin Money.  The BBA says higher capital repayment (in part reflecting  homeowners switching lenders) contributed, to monthly contractions in net borrowing through much of 2013, but since the turn of the year, the overall mortgage stock has started to rise as greater demand feeds through. Mortgage assistance schemes are helping first-time buyers and housing chains generally, as housing market activity rises. Compared to the same time a year earlier, approvals in March 2014 were: House...

Today's big conveyancing news is both the onset of the long-awaited introduction of MMR and a decision by Yorkshire Building Society to restrict its conveyancing panel to only firms with PII coverage via A-Rated insurers.  The increased lender scrutiny of solicitors firms which represent them in mortgage activities, as YBS has done, is indicative of a housing market still scarred by the 2008 global financial crisis. Financial transactions across all sectors are more tightly monitored -- hence the introduction of MMR -- and the risks more acutely managed. It's no surprise that the UK housing sector and conveyancing solicitors who service it should feel the impact.

Two years after complaints from customers and lawyers forced HSBC to ditch its controversial plan to drastically reduce their conveyancing panel, confusion reigns as to whether the lender's panel is, in fact, now closed regardless of whether a firm is accredited by the Law Society's Conveyancing Quality Scheme (CQS). Recall, HSBC relented and allowed all members of the CQS to act for it and the borrower in the legal work needed to buy a property. The decision increased the number of firms that consumers can choose from to more than 2,500 lawyers. The question on whether HSBC's door is shut to additional solicitors was raised by Council for Licensed Conveyancers CEO Sheila Kumar.  On whether the HSBC conveyancing panel is closed to non-CQS firms, she said: "We've been in very detailed conversations with the HSBC around the messaging and perception of what's being said.  The clear message that we've got is that their panel is closed at the moment, beca...

It seems like conveyancing solicitors have become the punching bag for industry errors. While the £100,000 sum ordered to be paid in a recent court decision against Goldsmith Williams made the headlines , two points caught my eye. The surveyors’ case is that the law firm failed, in breach of the terms of its contract with the lender, to advise that an applicant for a mortgage against a Peak District property had been registered as a proprietor for less than six months. He'd paid £390,000 for the property - much less than the surveyors’ value of £725,000 - and E-Surv argued that it would have realised its mistake if the solicitors had flagged up the relevant history. The first point is that Goldsmith Williams are not the first and won't be the last in failing to comply with a lender requirement. It must be recalled that the CML conditions reflect some fundamental duties of solicitors. Insurers recently revealed that over 50% of cases against property lawyers are lender dri...

As businesses go, conveyancing is perceived as high risk, topping the list of claims in the professional indemnity insurance and the compensation fund. The upshot is that firms engaged in  conveyancing have a higher chance of being rated as a high-risk for SRA supervision and monitoring.   For that reason, alone, conveyancing firms need to be able to provide evidence and an audit trail of compliance.  And with outcome-focused regulation, robust processes and systems need to be in place to manage risk and deter fraud.     So, it's against this backdrop that the Law Society are designing a conveyancing portal to reduce the strain and hassle of reducing the size of a firm's risk footprint. The portal, it is claimed, will over time provide verifiable evidence and assurance to lenders and PII insurers that a firm follows best practice and manages risk and performance effectively.   And while precise details are yet to be disclosed, th...

Improving access to justice is one of the regulatory objectives set out in the Legal Services Act 2007, which all Approved Regulators - and the oversight regulator, the Legal Services Board - are required to uphold and promote.  The CLC elected to require individual licensed conveyancers to provide an Access to Justice Statement as part of their Alternative Business Structure (ABS) application. Read the CLC's review of the access to justice statements. 

At the request of the Rail Accident Investigation Branch the CLC yesterday issued a reminder to conveyancers ordering searches for sites in inner London (including Docklands) to ensure that all searches consider Network Rail and Transport for London tunnels. Furthermore in respect searches for sites in central Newcastle should consider the Tyne and Wear Metro (Tyne and Wear Passenger Transport Executive) and in central Glasgow the Glasgow Subway (Strathclyde Partnership for Transport). The background behind this reminder is that in March 2013 a housing developer bored piling shafts through an underground railway tunnel in London. Having investigated, the Rail Accident Investigation Branch (RAIB) has asked the CLC to alert Licensed Conveyancers to some important points of which to be aware in relation to railway tunnels. The CLC warning points out : “The developer and builder in this case were not aware of the tunnel until the incident because Routine conveyancing searches d...

MMR switches responsibility from the borrower deciding whether to take a mortgage to the bank or building society granting the loan. If a mortgage becomes unaffordable, the future risk will be with the lender that the borrower argues that the loan should not have been given in the first place.

Conveyancing at the higher end of the property market could bear the brunt of changes in capital gains tax (CGT) treatment of UK residential property sales to non-UK residents. To the surprise  and dismay of many, the Government is proposing to remove the relief that allows second homeowners in the UK to elect, or flip , their primary residence for CGT purposes. The proposal covers both resident and non-resident homeowners. Sara Maccallum, a partner and the head of the Private Client and Tax Team at law firm Boodle Hatfield, wrote on http://www.cpifinancial.net , “Non-UK corporate owners of residential property will be subject to a two-tier approach. Those who pay the ATED will pay the related CGT charge on all or part of the gain at the usual rate of 28%.  In contrast, all other non-resident companies will be subject to a tailored CGT charge at an as yet unknown rate on all gains arising on the disposal of UK residential properties, including those which are owned as part o...

Until today most lawyers probably knew that Lender Exchange would be the preferred lender panel portal for Santander, RBS and Lloyds. It's now clear that HSBC have joined the ‘Big Three’, albeit initially in a slightly more-limited fashion .  While HSBC were not mentioned in previous press releases by the CML or Decision First (the company behind the Lender Exchange), in the last few hours the new website has gone live and sets out how HSBC use the service. With an eye on reducing the potential for delays in the postal service, and to enhance the service provided to home buyers their conveyancing panel, HSBC are about commence sending instructions electronically to firms by harnessing the technologies available through Lender Exchange. The Website states:  'Firms wanting to receive cases from HSBC will need to register for this service separately to the Lender Exchange service available for selected other lenders (eg. Lloyds, Santander and RBS). However, firms who are...