Do Estate Agents hold the key to conveyancing reform?
This was one of the many hot topics debated by a group of industry figures at a key event on the professional calendar earlier this week. Despite train issues and a mini heatwave, a group of leading conveyancers met on Monday at the 2nd Today’s Conveyancer Round Table; representing firms as big as My Home Move and Beaumont Legal, the 17 individuals in attendance were keen to discuss key issues facing the industry, reflected in the interesting thoughts and conclusions raised.
Chairing the event was our MD Chris Harris, who began by asking what the biggest issues facing the conveyancing market were. Unlike the first roundtable that clearly identified fraud as the key issue, the conveyancing attendees identified other areas which were challenging the profession at present.
Some key themes emerged, with Scott Mulligan of Thorneycroft Solicitors getting the ball rolling, stating that the biggest issues he felt were those relating to improving the customer experience, which could potentially be achieved by conveyancers working better together.
Others like Fiaz Khalid from LPL and Janine Edwards from Watkins & Gunn talked about the quality of conveyancers generally not being good enough.
Charlotte Local of Enact called for property passports to collate data ahead of the transaction to ensure they run smoothly.
The main themes were a shortage of well-trained lawyers, as well as an increase in additional obligations being placed on conveyancers such as enforcing tax, money laundering or fraud prevention.
The Roundtable began by focussing on a topical issue which saturated conveyancing headlines last week. The Court of Appeal handed down their long-awaited judgment on the Dreamvar case, concluding that there was liability on both sides following an incident of fraud.
A key point of contention was what this would mean for conveyancers when it came to checking the identity of the vendor. Tom Bridge of Keoghs Conveyancing emphasised that these cases shouldn’t have happened in the first place, with others agreeing, putting it down to a lack of education on the part of the firm and ensuring that it doesn’t happen again.
Helen Thorne from Slater & Gordon suggested that a greater onus should be placed on the estate agent who is selling the property on behalf of the fraudulent seller, and that to decide to place liability on whichever party has the best insurance cover is fundamentally wrong.
In relation to identity checks, Richard Mathias of Law Firm Services stated that there tends to be a divide amongst professionals, with one half demanding that the client come to see them in person. As highlighted by Tom, however, this is not to say that the chance of fraud is diminished, particularly in cases where a firm is less up to date. Fiaz agreed, stating that the level of sophistication used among fraudsters means that deciphering when ID is not genuine is becoming an ever more demanding task.
Tom suggested that there was potential for providers of indemnity insurer’s to “jump on the bandwagon”, predicting that a ‘buyer’s fraud protection’ policy could be introduced. He expressed his concerns that this could simply be wrapped up in a package with searches, which would be seen as a cash cow by insurers, particularly as the risk is so small.
Chris then drew attention to the two emerging schools of thought; whilst one set out to start afresh and come up with a much slicker approach and process, the other remained traditional, with a view that overcoming challenge is what underpins the very nature of the profession.
In relation to Local Searches, Richard highlighted the importance of information rather than insurance, and whilst a number of attendees questioned the necessity of the current extent of searches, Richard made it clear that in cases where a problem emerges later down the line, the buyer would rather have the facts at the outset than have to rely on an insurance policy.
Charlotte agreed, stating that rather than with the information itself, the problems lay with the speed at which it was made accessible. She stated that the key would be to provide a greater amount of information up front, as opposed to playing a waiting game of to-ing and fro-ing with the other side. Whilst the suggestion that something similar to Home Information Packs was not dismissed, Tom stated that this relied on mandate; without this, he stated, people would find ways to work around it.
Taking this further, he went on to say that before a property is able to be placed on the market, a certain amount of relevant information should be made available upfront.
The conversation then turned to the importance of developing and maintaining strong relationships with estate agents, and the impact this can have on the provision of information. Helen Bartlam of Davisons Solicitors highlighted that issues can arise when not dealing with the preferred agent, largely because there may be a lack of awareness around the extent of a conveyancer’s role and the respect that may otherwise come with that. She went on to mention the need for education, and the need for this to extend to all parties involved in the process.
Expanding on this point was Rob Gurney of Premier Property Lawyers. Taking the importance of education one step further, he suggested that a similar approach should be taken in terms of communication and that the industry should be working collectively towards eliminating – or drastically reducing – the number of additional enquiries raised by the buyer.
Acting for both sides of the transaction was then mentioned as a possible way to speed up the process, with Rob stating that whilst it can reduce delays, it’s important to remember that there is a process to go through, and not to get complacent. Expanding on the for increased education across all parties, Chris then asked what the key issues attendees felt were having the most impact on the industry, citing delays as a point raised previously. Among the causes for this were a lack of conveyancers and a compromise on quality, with each party having their own agenda.
A number of attendees highlighted the growing complexity of transactions being a cause of delay, particularly in terms of gifted deposits and long chains.
Next, HM Land Registry’s Eddie Davies discussed the organisation’s steps toward innovation and their 5 year transformation strategy, with a focus on digital mortgage deeds and e-signatures.
Having been involved herself, Charlotte was asked about her opinions on the process; whilst she said it had taken over three years, the delays were predominantly down to the initial legislative barriers, with all consumer feedback so far being positive.
Eddie mentioned development had been longer than hoped but that the project had dealt with many tricky subjects such as: legacy integration, building new digital platforms, integrating with shared Government services (Gov.UK Verify) and securing Ministerial approval to cover contingent liability needs.
Chris highlighted that the number of steps involved in the remortgage process is declining, questioning whether in some cases, lenders could move the process in-house.
In response, whilst Charlotte highlighted that the remortgage process can be streamlined in certain instances, there are still absolutely complexities within the process that cannot be ignored and require a conveyancing skillset.
Eddie the touched on the value checks completed by conveyancers in terms of sale and purchase, highlighting the risk-based decisions which technology unrelated to HMLR can make. He drew attention to HMLRs ground-breaking research and development project Digital Street, and the movement towards the digitisation of the Land Register, improving the accessibility of information. In terms of automating the related decision-making, he stated that given the scale of the data and the nature of many of the documents, not to mention the complexity of some of the decisions needed in conveyancing, there is still a long way to go.
Whilst attendees praised the steps being taken by the Land Registry, the general feeling was that the industry is a long way off seeing the real impact of the changes. Whilst the digital process may be appealing to some clients, concerns were raised that some could be fearful of conducting something so important online. Where liability was concerned, Tom suggested that should HMLR accept liability when Verify was used, conveyancers may feel much more inclined to use it. However, given that conveyancers are equipped with personal indemnity insurance, he highlighted that this will instead rest on their shoulders of the industry.
Investigating the source of funds was also mentioned as part of the process which, whilst necessary, could cause delays and confusion among clients. Fiaz suggested that the responsibility for this, particularly when there are red flags, should be left to the banks.
Chris then returned to the issue of representation, questioning whether there was a demand or need for an alternative body, given the scale and fragmentation of the industry.
Tom highlighted that, given that organisations such as the Conveyancing Association and Bold Legal Group have a core focus, they are likely to gain more traction over time than other organisations who have limited resources.
Key players in the estate agent market were also mentioned, with the pressure that they, in turn, place upon the profession. Perhaps most surprising was the feeling that this power that they hold, in terms of the early point at which they speak to the consumer, could be used to improve the conveyancing profession for the better. This related to upfront information in particular; why would an agent not want to positively contribute to something which would speed up the transaction? This is made even more appealing by the precious nature of sales, with attendees agreeing that something which would secure this at an earlier stage is likely to be embraced by agents.
However, the dependency of this working relies on the client wanting to complete that information at an early stage, even before they’ve had a confirmed offer. The biggest impact, as stressed by Rob, is likely to be made where the property specific aspects are concerned, which will go on to form part of the enquiry process. Returning to his point about communication, he stated that the current belief among many estate agents is that lawyers enjoy the enquiries process; an assumption which he stressed to be far from the truth.
If there were genuinely no enquiries to raise because all the information and documentation needed was already in place, it would make the job of the buyer’s lawyer so much easier. For example, if the seller knows that a property has been altered or had checks done, this information should be provided upfront as opposed to having to wait until the process is well underway, avoiding transactions becoming bogged down.
This, he said, is potentially within the gift of the industry to make happen.
If you’re interested in attending one of our future Roundtables, please email [email protected]