Monday, 21 September 2015

A Cautionary Tale for Right to Buy Conveyancing Lawyers

The Local Government Ombudsman (LGO) has criticised South Oxfordshire Council for omitting to properly inform buyers of ex-council houses under the right to buy scheme about the restrictions affecting their properties.

In two distinct complaints the home-buyers involved had purchased former council-owned houses some years ago. 

It is of course likely that the complainants had their conveyancing lawyers in their sights as well.

The homeowners both lived out of the area. When they bought their houses the council advised that as a condition of granting consent they would have to occupy the houses as their main residence and stipulated that they could not sell to a limited company or grant tenancies.

In 2013 the South Oxfordshire DC reviewed its policies and began to enforce a local residence connection on the sale of ex-council houses. When the complainants put their houses on the market and applied to the council's approval they were told that consent would not automatically be forthcoming to a buyer from outside the area. Whilst the council exercised its discretion and granted consent to buyers who were not local it was clear that the restriction could prevent the houses being sold in the future. The sales prices of both houses were affected because of the restriction.

The ombudsman determined that the Council were duty bound to provide full details of the potential restrictions notwithstanding that they may have chosen not to implement them at that time. The council argued that the onus was on the homeowners’ solicitors to check the full details and inform them of the restrictions.

Whilst there is nothing in the decision that indicates that the buyer’s lawyers did anything wrong, conveyancers need to consider their duties and ensure that their clients (including the lender as per the CML Handbook) fully understand the implications of potential restrictions that ex council houses could be subject to even where they have not been explicitly mentioned by the local authority.

Friday, 18 September 2015

Coventry Building Society sets new Conveyancing Requirements for B2L

Lawyers on the Coventry Building Society conveyancing panel need to take note of the latest change to section 6..6.1 of lenders CML Handbook PII.

A new provision was added yesterday stating: 'Legal representative to ensure that where the property is located within a designated selective licensing area under Part 3 of the Housing Act 2004 a licence has been granted by the local authority in respect of the property.'

I am expecting a number of lenders to make similar changes in the coming months. Some lenders may well use the CML Handbook to make it clear where they do not lend to landlords with properties covered by selective licensing.

Wednesday, 9 September 2015

AmTrust Renews Rewards for Conveyancing Risk Management

AmTrust Europe (“AEL”) a wholly owned subsidiary of AmTrust Financial Services, Inc. (Nasdaq: AFSI) (the "Company"), (“AmTrust”) have renewed their groundbreaking agreement with legal software house Lexsure, which links the use of risk mitigation software with lower expenditure on professional indemnity (PI) premiums for law firms, a move that could be worth thousands of pounds for some firms.

Professional indemnity premiums are a great concern for law firms, as, particularly for smaller firms, they can constitute one of the largest costs to the business aside from salaries. Furthermore, a practice that is refused PI cover can be forced to go out of business, a fate that befell some firms in England and Wales last year.

Law firms can evidence their lower risk profile for conveyancing transactions by using Lexsure’s COMPLETIONmonitor software, an online checklist, tailormade for conveyancers to reduce and eliminate errors and omissions.

In continuing to reward firms that reduce their risk profile by using COMPLETIONmonitor in the conveyancing process firms who insure with AmTrust can expect a per case savings on their PI renewals for each case completed with the software. Even for small firms with active conveyancing practices, this is likely to result in a saving of thousands of pounds.

Head of Professional Indemnity at AEL, Alex Dyer, said:

“We appreciate that the cost of PI insurance premiums has a great impact on law firms, particularly for firms that do a lot of conveyancing, due to the frequency and size of claims in that field. We believe it is right and fair to offer a financial reward to firms that empirically demonstrate risk mitigation by using COMPLETIONmonitor”.