Principality Building Society Conveyancing Panel Update - Building Insurance Changes

In line with new CML Handbook changes Principality Building Society have updated their specific requirements relating to building insurance. As a conveyancer on the Principality Building Society Conveyancing panel one needs to check the following: 

You should also make reasonable enquiries to satisfy yourself that:
1. the insurance is in the joint names of us and the borrowers unless the property is leasehold and the lease requires the insurance to be in the landlord’s name, in which case our interest should be noted on the insurance policy.
2. The amount of building insurance cover is at least the amount referred to in the mortgage offer. If the property is part of a larger building and there is a common insurance policy, the total sum insured for the building must be not less than the total number of flats multiplied by the amount set out in the mortgage offer for the property.
3. The building insurance cover is index linked.
4. The following risks are covered -
• Fire, explosion, lightning or earthquake
• Subsidence, heave or landslip 
• Storm and flood
• Malicious damage
• Theft or attempted theft
• Water leaking from tanks or pipes
• Falling trees or branches
• Television, radio-signal or satellite apparatus breaking or collapsing
• Riot
• Impact by aircraft, other flying devices, or any vehicle or animal
• Oil leaking from heating systems.

Submission of the Certificate of Title will be taken as confirmation that you have satisfied yourself in respect of all aspects referred to in CML Handbook Para 6.14.1 including the points above.

Conveyancing Hendon - Conveyancing Search Results

I got asked yesterday by a potential buyer requiring conveyancing in Hendon whether Environmental Searches would show if Hendon is within the Hydrogen Network Expansion plan (LHNE)

LHNE will deliver publicly-accessible, state-of-the-art fast-fill 700 bar hydrogen fueling station network together with new hydrogen vehicles in London, including a number of Hyundai hydrogen fuel cell vehicles and Revolve diesel-hydrogen dual fuel vans.

The LHNE consortium comprises of Air Products, Cenex, Commercial Group, Element Energy, Heathrow Airport Ltd and Revolve Technologies Ltd and the project is co-funded by a grant from the UK’s innovation agency, the Technology Strategy Board.  It is one of five research and development projects selected by the Technology Strategy Board in 2012 to help accelerate the adoption of energy systems using hydrogen and fuel cell technologies, bringing them into everyday use.  The Mayor of London and the Greater London Authority will play a supporting role in the project.

Hendon is set to become the first supermarket location in the UK to have a hydrogen refueling station for a new generation of environmentally-friendly vehicles. Hydrogen supplier Air Products will install the SmartFuel station at the Sainsbury’s  Hendon store in North London by the end of the year. As far as I am aware Hendon Conveyancing searches will not reveal such information.

Why even a prophet of doom can be comforting

I’m a specialist in risk, so I can sometimes be accused of being a little conservative in outlook, even for a lawyer. But I suspect that this article will have people reaching for their thesaurus to find stronger words, like “worrier”, “pessimist” or even “doom-monger”.

I’m sticking my neck out today to predict that 2015 is going to be the year of of the file review. And like the mythical Cassandra of Troy, I’m predicting that I’ll be roundly ignored and then proved right. Although unlike Cassandra, I hope to avoid insanity. And seduction by a god.

There are a number of reasons why many files will come under the spotlight by lenders in the next twelve months:

• Regardless of whether and when interest rates move upward, experts predict a correction in the market. However small a correction that is, some borrowers will quickly find themselves in dire straits and we will see a slow but steady return to repossessions, although even I don’t foresee it being on scale of the early 90s.
• Lenders will definitely not, it won’t surprise you, swallow their losses without a care in the world. For conveyancers, that means file reviews because lawyers are an “easy target” for a lender looking to offset a loss – or pass it on altogether.

• The Conveyancing Quality Scheme (“CQS”) was introduced by the Law Society in 2010 in an attempt to drive up standards among its members and thereby improve lender confidence in the legal profession generally. The scheme’s credibility is now being brought into question, with file audits conspicuous by their absence. As such, CQS has suffered various body blows in the last 12 months. Lenders will only maintain confidence if CQS offers up some sacrificial lambs. Rumours already abound that file reviews will be the most impactful and equitable approach.  

• Professional negligence cases, mostly initiated by lenders, were up by 20% in 2014. There is no sign of this abating in 2015. This climb in claims is in line with a 30% increase in litigation firms’ requests from Lexsure for archived CML Part 2 requirements. Last week Joe Bryant, partner at city firm RPC said: “On the face of it, this looks like a pretty shocking, sudden and unexpected rise. Claimants – many of them lenders – are rushing to launch claims for perceived professional negligence against law firms before they run out of time.”

Given the complexity of the Handbook and the frequent changes to it, solicitors run the risk of failing to meet the contractual obligations assumed under the CML Handbook. Yet failure to adhere to these obligations may result in a claim for breach of contract – a claim that does not require negligence to be proved.

File reviews are at best an irritation, more usually a source of concern and sometimes lead to embarrassment or worse for firms and for individual lawyers.

Strong risk assurance embedded in your firm’s everyday practice can nullify those worries. Lexsure’s COMPLETIONmonitor, a product that for many can be used for free, is perfect for protecting your back.

COMPLETIONmonitor, built by experienced conveyancers with the assistance of claims handlers, not only gives you assurance on the kinds of errors that often end with firms being sued, but also makes reporting for lenders’ audits as simple as pressing a button.

Even better, if your professional indemnity insurance is with AmTrust, your firm can actually save money, as PI renewals are discounted for firms that lower their risk profile by using COMPLETIONmonitor.

If you’d like to find out more about how COMPLETIONmonitor can prevent risk and save you worry and money send me an e-mail to sseaton@lexsure.com, or join me for a one to one demo by clicking here and hear it straight from the [Trojan] horse’s mouth.

Are you going straight to tribunal if you breach the CML handbook?

Over the last few years, the SRA and  Scottish Solicitors’ Discipline Tribunal  have taken disciplinary action against firms appear to have failed to comply with requirements to report key facts about transactions to lenders.

The focus has been on significant failures to comply with CML Handbook requirements which, when followed, will reduce the risk of mortgage fraud.

Failure to comply with these requirements potentially exposes the profession (as well as reputational) risk and in the case of Scotland to significant financial risk in the form of increased Master Policy insurance and Guarantee Fund claims and premiums.

The SRA and SSDT appear to be taking disciplinary  action as a proportionate response to what appear to

be cases involving significant risk. As far as I understand neither operate a policy to review all breaches of the CML Handbook.

More recent disciplinary actions appear to feature firms demonstrating systematic failings. These involve a number of transactions which include failures to report facts to lenders as required by the CML handbook. The cases clearly highlight the reasons why regulators are concerned by significant failures of this type and the impact they can have on individual solicitors and the wider profession both reputationally and financially.

Australians set to improve UK Conveyancing

Australian legal information services provider InfoTrack has signaled an aggressive global acquisition strategy with an agreement to acquire the largest independent property search company in England and Wales, STL Group PLC.

According to Mr Wood, chief executive of InfoTrack, “Australia has a track record in developing new technologies then – for a range of well documented reasons - we end up selling the farm to overseas interests”.

“We have developed a great business here and we are determined to keep it in Australian hands while at the same time enhancing our offering to the legal profession, not just in Australia but in key legal jurisdictions around the world,” he commented.

Mr Wood went on to say that not only was the acquisition good for Australia, it will also deliver enormous benefits to STL clients with significant investment planned for STL’s technology platform. The STL business has been operating across the UK for over 40 years, and he looks forward to further growing what is already a strong business.

“We believe the UK market has great opportunities for a high-quality, integrated search offering that doesn't exist there yet and STL is an excellent foundation for us to bring that offering to market for the benefit of firms. Their reputation, client base and business partnerships will make it very easy for us to replicate the great success we have had locally,” said Mr Wood.

“STL is the perfect strategic fit for us,” added Mr Wood. “Their business model and integration with LEAP UK and other legal software providers mirrors how we do business in Australia and we look forward to working with them to develop and cement their position as a leading legal search provider in the UK”.

 STL provides solicitors, conveyancers and property professionals with extensive commercial and residential property searches in addition to company searches, anti-money laundering searches, EPCs and surveys and property insurance services. STL will continue to operate as its own brand.

“This is a fantastic opportunity for STL,” commented Alan Thorogood, CEO of the STL Group. “We share a vision with InfoTrack of providing all conveyancing searches and an excellence of service combined with market leading technology. The UK search market is ripe for innovation – by combining data with systems, we aim to make the search process as efficient and seamless as possible for our clients”.