Expert Discusses Conveyancing Issues And Potential Sector Solutions
The home buying and selling process has started to struggle as the weight of political uncertainty begins to take its toll on buyers and sellers.
As transactions reduce, all stakeholders in the property process look to ensure their processes are as efficient as possible.
The Government has accused the home buying and selling process of significant failings in recent years, often quoting the £270 million loss per year caused by transactions falling through before the deal reaches completion.
Their solution is to trial reservation agreements in the hope of binding buyers and sellers to the transaction.
Regulators have looked to push technology as a way of increasing efficiency in the process, providing buyers and sellers with greater transparency and instilling increased confidence in the conveyancing process.
Stakeholders have also faced criticism over a perceived lack of qualified staff driving down standards and causing further delays.
As the conveyancing sector looks to improve the consumer journey by adopting approaches to tackle these contentious issues, Tim Higham, Partner and Head of Residential Property at Trethowans, has taken the time to offer his insights on issues plaguing conveyancing, the rise of reservation agreements and the vast array of products banded as the overall solution.
How can the conveyancing process improve to ensure timescales and efficiency in the home buying and selling process increase?
You will hear IT solutions this and that from companies trying to make a profit, but I consider fancy IT a complete red herring.
My view is that conveyancing standards are at an all-time low, certainly in the 20 years that I have been in the Profession and I see no signs of improvement. Estate Agents hand the baton to conveyancers, not yet having been paid for months of estate agency work, and yet the legal process then becomes completely random in terms of how fast the conveyancer is likely to be.
Why? Because of the huge disparity in quality between conveyancers. The actual human doing the work. It is crucial that improving the quality of the actual conveyancer is prioritised as a matter of urgency.
Dynamic conveyancers maintain pace, and if you put two opposite each other or a chain of them, deals fly. They have confidence, they care, they have solutions, and they make instant decisions.
The Government claim around a third of home sales fall through per year, costing stakeholders over £270 million. How can key stakeholders in the property sector reduce this fall through rate?
The actual conveyancer can be a factor for a fall-through. So speaking as a conveyancer, if conveyancers spend too long on the legal process, make a meal out of non-issues, then parties in the chain do get cold feet, or they spot another property which catches their eye, or one party in the chain may just have had enough of waiting. If every conveyancer – and many are as efficient as this – would simply treat their client’s sale or purchase as if it were their own, then they would be ‘all over it’, and time which currently is lost, would be minimised. By lost, I mean through lack of any incentive to be prompt.
The Government are looking to reservation agreements to help solve this issue. How effective will the legal enforcement of reservation agreements be in reducing fall through rates?
I trust the idea fizzles out, as it is a nonsense.
Sure, speaking as a conveyancer, it won’t be me putting them in place it will be the estate agents, but (1) you know someone will be making a whole lot of money from them (2) at a time when moving home is already so costly and (3) they will have as many loopholes to allow a party out (i.e. bad searches, bad survey, mortgage not approved, job loss, death etc.) as nearly exist now. And what a distraction from just getting on with the conveyancing.
Of the millions of property completions per year, you need to identify the percentage which fall-through, then of that tiny amount you have to work out how reservation agreements will help tie in a party. That is a tiny fraction of a tiny percentage – yet the Government want to impose reservation agreements on every completion!
Instead, estate agents who are not properly vetting the buyer in the first place should be under tighter obligation to do so, as plenty of estate agents vet buyers in great detail, the same approach as the idea behind a RA.
The last thing, as a conveyancer, I want to be involved in, is arguing over whether a RA payment is due back or not. I might be paid for my time, but it seems pointless when there are so many more important parts of the home moving process which should be fixed.
It has been suggested that expanding the use of Digital Logbooks could help to instil greater buyer confidence in the property they are buying. Could a wider implementation of this service help the home buying and selling process?
Home Information Packs (i.e. upfront information) was a great idea, as the moment we received a HIP, we had as much as an auction pack, and subject to a few legal enquiries, the legal work could be ready, waiting on a survey/mortgage offer. Problem is, like the quality of so many auction packs these days, the quality of HIPs became dreadful. And I was not aware the quality was ever policed, so incomplete forms, missing documents of title, personal (not official) searches with defects became rife. So upfront information is only as good as how well it is completed.
But also, the information is only as good as how well the upfront information is checked. I am convinced that there are far too many conveyancers who do not check their clients’ Property Information Forms before simply forwarding them on to the buyers, storing up later enquiries which only then point out the defects.
But even with a good upfront pack, it is only as good as the quality of the conveyancer in whose hands it is sent to. The same with giving a mediocre conveyancer all singing IT systems, they are still a mediocre conveyancer now with all singing IT.
We liked a good upfront pack as I say, as we like to keep our enquiries to a minimum, as our conveyancers have the confidence in their understanding of legal risk/CML/the Protocol, and do not protract deals with meaningless enquiries, or enquiries that they feel must be asked in case they face a mediocre conveyancers when their clients then sell on.
But that is not true of all conveyancers, sadly.
Consequently, however good upfront information is, it is the quality and experience of the conveyancer in whose hands it rests, and their willingness to be ‘all over the deal as if it were their own’ that also counts.
How could regulation, legislation and current conveyancing processes change to improve the present situation?
- Correct the current situation where a legal practice can badge their non-legal staff as a conveyancer and set them to work the very same day.
- Require a minimum qualification for conveyancers.
- Ensure the Law Society Property Information Form is expanded to cover the more commonplace enquiries/buyer concerns.
- Require conveyancing practices to clearly publicise all their conveyancers’ photos/correct contact details on their website, so they are accountable (no website must fail to have contact numbers AND especially email addresses).