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The recent news that the majority of the top ten lenders have declared they will use ‘all monies charges’ to repossess homes if borrowers struggle with non-mortgage debts should be cause for concern to conveyancing practitioners. File Reviews for Handbook Compliance More repossessions equals increased file reviews and inevitably the spotlight being placed on the lender handbook compliance. John Kunzler, senior vice president in the financial and professional practice at Marsh recently pointed out in an article entitled ‘Grasping the nettle of conveyancing claims’ : ‘...when the property market falls solicitors are often held to account for negligently performing conveyancing and, more recently, in particular failing to follow the instructions set out in the Council of Mortgage Lenders’ (CML) Handbook. For those who have worked in professional indemnity for decades, it may feel like solicitors are perpetually doomed to repeat this cycle’ A review of Marsh statistics on...

A number of lenders made changes to their Handbook last month. Perhaps not surprisingly some focused on changes to leasehold requirements. Examples of lenders who made changes (England and Wales region) include: Yorkshire Building Society  (2 sections) Scottish Widows Bank (5 sections) Swansea Building Society  (1 section) Chelsea Building Society  (2 sections) Market Harborough Building made set an interesting new requirement relating to ground rents. Their new wording at 5.14.9 reads: a. Any ground rent at the start of the mortgage term should not exceed annually £250 outside of London or a £1,000 inside London. If this is the case you must immediately contact the Society. We will advise you if our mortgage offer remains valid. b. Ground rent and other event fees must be reasonable at all times during the lease term. For example, it is acceptable for ground rent escalation to be linked to RPI (Retail Price Index) or a similar index and where this is...

Leasehold reform is on the way. Many lenders have already been proactive in making changes for some months now to their P2 Handbook requirements. Is it now time to be making changes to your Report on Title in light of new lender instructions and in anticipation of legislative reform? On the 25th and 26th September Lexsure will be running a number of free 30-minute webinars focused on what a firm's leasehold Report on Title might contain and how the latest e-ROT technologies can improve the process of generating a Report on Title. The free webinar will pay particular attention on the following areas: New considerations concerning the number of years of the lease Fees changed for by a management company or landlord Ground Rent provisions Assignment provisions - what might affect marketability Bookings can be made here

Are we about to see a significant dip in house prices in London in the near future? Bloomberg News recently asked seven market commentators to predict what they see happening next in London’s 1.6 trillion-pound housing market. Paul Cheshire, professor of economic geography at The London School of Economics and Political Science: “The turning point is just being reached. Housing prices have continued to rise relative to incomes and the affordability ratio is now at an all-time low. Real incomes are falling as the weakness in the pound feeds through to higher inflation. The ability to raise wages isn’t there and Brexit is making everything more uncertain and worse. London is the epicenter of the U.K. housing market and changes in prices there tend to ripple out. I’m expecting a sharp correction in housing, more on the level of the 1990 crash. I don’t expect negative equity to be as big of a problem as it was then, and interest rates may rise but will still remain low by the sta...

From 1 July 2017, the finance and banking industry operating in the UK will be represented by a new trade association, UK Finance. It will represent around 300 firms in the UK providing credit, banking, markets and payment-related services. The new organisation will take on activities previously carried out by the Asset Based Finance Association, the British Bankers’ Association, the Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association. The CML Lenders’ Handbook will continue, but it will be renamed the "UK Finance Mortgage Lenders’ Handbook" (‘the Handbook’).  The CML will rename the Handbook from 1 July 2017. Associated documents (for example, the Disclosure of Incentives Form) on the CML website in due course. Website urls and bookmarked links relating to the Handbook will continue to work as normal. From 1 July, all references to the CML Lenders’ Handbook shall be deemed to mean the UK Finance Mortgage Lenders’ Han...

Technology, lender compliance and fraud prevention within the context of a pre-competition checklist are some of the main focus points at the next Webinar by Lexsure on 24th and 25th July.   Almost all firms have a pre-completion checklist that they use, either on the side of the file or a paper checklist. But how often does a firm update that checklist and how comprehensive? Lexusre’s webinar focuses on what a firm’s pre-completion checklist should look like and how the latest technologies can help reduce mistakes and insurance premiums. The free webinar will pay particular attention on the following areas: What questions should your checklist have to highlight potential frauds (what can we learn from the Mishcon, Perunsing and P&P cases) Help to Buy - Example Questions/Tasks/Workflows The European Union’s Fourth Anti-Money Laundering Directive Lender Compliance - How can a checklist ensure that you are up to date with the latest requirements How a pr...

The following amendments will be made to the Lenders Handbook for England and Wales, Scotland and Northern Ireland on 19 June 2017: England and Wales A minor amendment to reflect that the FASI and MASI professional qualifications are no longer offered. Scotland Updating the Handbook to reflect the closure of the Register of Sasines to new standard securities Removing reference to obsolete Law Society guidance in relation to coal mining Aligning the Handbook instruction with England and Wales in respect of warranties for new build properties Updating the handbook to reflect the use of digital discharges A minor amendment to reflect that the FASI and MASI professional qualifications are no longer offered. Northern Ireland A minor amendment to reflect that the FASI and MASI professional qualifications are no longer offered. Aligning the Handbook instruction with England and Wales in respect of warranties for new build properties The CML...

A director of VC company recently advised me that ‘there are only two types of industry left..those that have been disrupted and those that are ripe for disruption’.   The legal industry will, sooner or later, witness significant change regardless of how loud the naysayers are. Concluding that because disruption hasn’t happened yet, that it will never happen is a high risk approach. Simply repeating the statement “It won’t happen to us” again and again did not prevent disruption to newspaper publishers, telephone utilities, stockbrokers, record companies, bookstores, travel agencies and the retailers. The reason Kodak failed, was not due a lack of corporate strategy (the top brass saw digitisation coming), and nothing to do with poor technology (in 1975 Kodak built one of the first digital cameras and held more patents than it’s competitors). Kodak failed because it was a chemical company and a bureaucracy, filled with people eager to do what they did yesterday. Li...

If you are not going to be a good conveyancer then you better be a lucky one and hope that events don't conspire to expose errors. I don't fancy your odds in the long term though if you continue to make mistakes.   Conveyancing errors often are allowed to happen for one of two reasons: You're in a huge hurry and you can't process all the incoming information properly. But more common... Our heads our turned in order to focus on short term thinking. The ‘lifting of the carpet’ may happen for months or years and possibly never. You would be amazed to learn how many lawyers tell me ‘I have not been sued in 20 years of practice and therefore clearly I do not make mistakes’. Similar thinking is the reason why most of us don't save for retirement, don't pay attention to long-term environmental issues, continue to smoke and, tragically, tolerate (or fall prey to) irrational rants about things like vaccines. Poor decisions and errors happen not only...

HSBC have become the latest lender to change their CML Handbook instructions to lawyers in relation to ground rents. Policy 5.14.9 of HSBCs CML Handbook Part 2 now reads We will not provide residential or Buy to Let Mortgages in the following circumstances: • The property is subject to an onerous Lease clause regarding an excessive or unreasonably escalating ground rent. This change comes hot on the heels of the Nationwide Building Society change on the 11th May. Despite some mainstream and industry press pointing to the fact that Nationwide were the first lender to make such a change, this is not the case. A number of lenders were making changes introducing new requirements in relation to ground rent five weeks earlier. Other Part 2 sections of CML Handbook for HSBC were also changed yesterday. Law firms wanting to be updated when lenders change their instructions can sign up to the LENDERmonitor Alert Service .   2023 Note: CQS accredited firms who use the LENDERm...

One reason not to use the latest legal technologies reducing conveyancing risk is that it potentially lulls the lawyer into a false sense of security. Lexsure’s intelligent checklist system COMPLETIONmonitor is sometimes met by such an objection. The phenomenon known as ‘inattentional blindness’ is real. This is when you ask people to look for something specific and they develop a startling inability to see things in general — even things that would normally be glaringly obvious. In one rather amazing experiment on ‘inattentional blindness‘ subjects are shown a video of a fast-paced ball game and asked to count how many times the ball is passed back and forth. Partway through the video, a person in a gorilla costume wanders into the middle of the screen, beats its chest a few times, and then wanders off again. Here’s the amazing part: between 33 and 50% of subjects don’t notice this happen. Perhaps this bears repeating: up to half the people instructed to pay close attent...

Sorting by price is the dominant way conveyancing online now happens with most consumers picking the lowest advertised price.  If you think I am wrong, ask those firms who are the most expensive on comparison sites how much business they win compared to those publishing lowest fees. Just like cheapest airline ticket or cheapest insurance or freelancer the lowers price comes up first, and most people click. This is ideal for the comparison sites as it’s simple to build. The price is a number, and it's easy to sort. It suits the lazy conveyancing firm and it’s great for the naive consumer. If a potential client can't take the time to learn about the options, about quality, about side effects, then it seems like buying the cheapest is the way to go--surely all conveyancing lawyers offer the same service anyway? For the law firm nothing is easier to improve than price. Low price conveyancing is the domain of the conveyancing firm who doesn't have anything more meaningful to off...

The recent cyber attack on the NHS is a stark warning to a conveyancing industry targeted and vulnerable to cyber crime. Imagine the scenario..It’s 7 p.m. on a Friday. You are about to finish a report on title due the next day when a message pops up on your laptop. It informs you that a third party has gained control of your system and encrypted all your files. To unencrypt your files, you must pay a ransom. All your files on your computer system are now unreadable. Thanks to this ransomware attack, your firm has basically been shut down while your system is held hostage. Have you completions been compromised? Did clients expecting their balances receive them? How is everyone in the firm going to to work on Monday? Did you open a file that you should not have. A hundred questions and scenarios are going through your mind. The most common ways for the software to be installed on a law firm’s systems is through phishing emails, malicious adverts on websites, and questionable ap...

Following it’s announcement earlier this week to make changes to their lending requirements for new build properties the lender has now updated their CML Part 2 instructions. Sections 5.14.1 and 5.14.9 now have the following paragraph added: NEW BUILD PROPERTIES (includes office conversions but does not apply to Shared Ownership) The following are not acceptable: - The unexpired lease term on a new build flat is less than 125 years - The unexpired lease term on a new build house is less than 250 years - Starting ground rent is more than 0.1% of the property value The lease must be amended to comply with the above. If not the case cannot proceed. Please advise us where the case cannot proceed. Ground rents and event fees: Ground rent and other event fees must be reasonable at all times during the lease term. For example, it is acceptable for ground rent escalation to be linked to RPI (Retail Price Index) or a similar index and where this is the case we do not need...

‘A’ rated insurance company AmTrust Europe Limited have extended their ground breaking agreement with legal software house Lexsure that links the use of risk mitigation software with lower expenditure on professional indemnity (PI) premiums for licensed conveyancers, a move that could be worth thousands of pounds for some conveyancing practices on the JLT/CLC Scheme. Professional indemnity premiums are a great concern for licensed conveyancers, as they constitute one of the largest costs to the business aside from salaries. Licensed conveyancers can now evidence their lower risk profile for conveyancing transactions by using Lexsure’s COMPLETIONmonitor software, an online checklist, tailor-made for conveyancers to reduce and eliminate errors and omissions. Licensed conveyancing firms that reduce their risk profile by using COMPLETIONmonitor in the conveyancing process who insure with AmTrust can expect a per case savings on their PI renewals for each case completed with th...

Conveyancing in recent years puts a premium on speed: the sooner, the faster, the better. You only have to look at most law tech companies in the conveyancing space to see claims of generating  ‘greater efficiency’ or claiming that their software ‘speeds up the process’. I recently attended a managing partners seminar where one of the speakers all but said that if you wanted to be involved in volume conveyancing in any way you would only be profitable if you had systems in place to dramatically speed up the process and cope with bulk work. Pile it high, do it cheap and do it quick. How depressing.   I agree with Malcom Gladwell, journalist and author, who during a recent interview at Wharton Business School said "In any kind of high-stakes job where the penalty for error is high, you can't afford to have hares," Insurers, lenders, regulators and law firms should fear the high output, lots-of-errors lawyer.   My understanding from speaking to insurers and bro...

All mainstream lenders provide their instructions to property lawyers via the CML Handbook or BSA mortgage instructions. Understanding a specific lender’s requirements and keeping up-to-date with changes can be a time-consuming manual process, particularly given that individual requirements can change on a daily basis. In not addressing or overlooking a lender’s requirements, a solicitor or conveyancer risks being sued by the lender for the full value of the mortgage and their firm could be removed from the lender panel. The previous SRA thematic review into conveyancing revealed that a quarter of firms surveyed had experienced professional negligence claims relating to conveyancing work in the two years. This free webinar focuses on the more important changes in the last 6 months. It will also highlight trends that are emerging when it comes to lender behaviour in particular in relation to certain types of ‘problematic properties’ for example: short leases, absentee landlords...

Almost all conveyancing lawyers complain of not having enough hours in the day or being under significant time pressure. For many, there exists a feeling of being stretched or overworked. Few would challenge the sentiment that conveyancing has become more complex in the last twenty years. Simultaneously, the industry has witnessed an increased demand for speed of transaction and better communication. Long gone are the days when there were four weeks in between exchange and completion, which believe it or not, was the norm in the mid 90’s. With so many parties placing demands during the working day when is the conveyancing lawyer supposed to find the time - often in excess of an hour - to generate the single most important document in the purchase transaction, namely the Report on Title ? For many, the only option is to arrive at the office early or stay late or work over the weekend when the frequency of  phones or emails dies down. For others it’s booking one of the board-ro...

Accord Buy to Let is the latest of a number of lenders who have changed their CML Handbook requirement relating to minimum unexpired lease terms (section 5.14.1). The new requirement reads : " 85 years from the date of completion of the mortgage ". This replaces the old wording: "60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term".

The new financial trade association has been named UK Finance - Representing UK Finance & Banking. This was a unanimous decision by the Interim Main Board. The new integrated trade association will bring together member organisations in finance and banking in the UK.  UK Finance will integrate the remits, skills and capabilities of six trade associations: The Asset Based Finance Association (ABFA), British Bankers’ Association (BBA), Council of Mortgage Lenders (CML), Financial Fraud Action UK (FFA UK), Payments UK and the UK Cards Association (UKCA).  Last month Bob Wigley was announced as the Chair of UK Finance, commencing his role on the 1st March who will oversee the appointment of the Chief Executive of the new body and the integration of the existing trade associations. UK Finance is set to launch in the summer of 2017.

Do you shut yourself off in a quiet room at the office for hours a week or come into work early to work on this critical and time consuming document? Is it possible that you are wasting valuable time?  What a sad depressing thought. Surely there has to be a better way to generate a Report on Title. Lexsure have created a calculator to help you add up all the hours and assess how much time the e-ROT might be able to save you. The table below shows how much time firms are spending based on feedback to date: Use the calculator to get an approximation of time that you may be able to save, Lexsure’s e-ROT Brings increased protection, consistency and efficiency to building the most important  - yet tedious and time-consuming - document in a purchase transaction. The e-ROT webinars are taking place this April. You can book here.