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Showing posts from 2014

Advice to a selling client on a request for a reduced deposit

Accepting a reduced deposit on a sale transaction without explaining the risks and seeking a client’s explicit instructions could expose you to a costly professional negligence action if the transaction fails to complete ( see Morris v Duke Cohan ( 1975) 119 SJ 826) .
The question all practitioners should be asking is whether the seller will be adequately compensated for any loss on an aborted transaction post exchange of contracts.
So what sort of advice should in these circumstances be given?
The advice we give is in the following terms and is designed as can be seen to ensure that the seller client has been given written advice on the risks in the hope that the client can then make an informed decision on the request.
‘Your buyer(s) is asking to pay a deposit on exchange of contracts which is lower than the sum normally payable, that is 10% of the purchase price. 
The deposit is either paid to us (for us to hold) on exchange of contracts, or is held by the seller solicitors to our or…

There is more to a joined up relationship between estate agents and conveyancers than better communication

It was interesting to see and read the Conveyancing Association’s Conveyancer/Estate Agent Practice Guide launched in the hope it might help to improve communication between conveyancers and estate agents, and in the process, provide clients with greater confidence in the conveyancing process.  I applaud the initiative and wish it well.
As to whether I consider it will succeed, I am I must say highly sceptical.  
The Guide makes some obvious recommendations such as agreed timings for regular phone calls and updates, giving estate agents access to online case tracking and monthly predicted exchanges dates.  Not rocket science, and for a well organised and paid businesses with time and resources to devote I can see practices of this type helping to ensure a transaction can proceed quickly and efficiently.
I question however whether with such a complete difference in culture between how a conveyancer and agent work it is in fact possible for these measures to  succeed.  
My business oper…

How does my lender affect my leasehold purchase?

Article by Katie Easter -  Trainee Solicitor with MJP Conveyancing 

Conveyancers acting for mortgage advisers are under the same obligations to the lender as they are to their purchasing clients. 
These obligations include adhering in the main to the CML Handbook, a set of rules written by the Council of Mortgage Lenders which must be followed when acting for mortgage providers.
How does the CML Handbook affect Leasehold property?
The nature of leasehold property means that there are more factors that can lead to it diminishing in value compared to freehold property.  Mortgage providers therefore seek to protect themselves should they need to repossess a leasehold property by imposing strict requirements. Solicitors are obliged to ensure that leasehold property meets these requirements.
One of the biggest factors affecting the value of leasehold property is the term of years remaining on the lease following completion. Each mortgage provider that subscribes to the CML has their own minimu…

Lender and client relationship and the potential for conflict

Article by Georgie Harrington - Trainee Lawyer 
Where a client seeks the aid of a mortgage, they are no longer the only party legally represented. Where the same firm of solicitors represents the client and lender, there are many scenarios in which a conflict of interest may arise.
This article will focus on the unusual, yet extremely important scenario whereby the client creates a charge in the property in favour of the lender for the purpose of providing financial support and benefit to another party. This scenario is known to the conveyancing industry as “third party security”.
What is third party security?
A modern example is that of a second mortgage against a property to create a source of capital to finance the start-up of a new business. It is obvious to assume this arrangement may be between a married couple or partnership, but this is not always the case.
The potential for conflict
(1) The danger within such an arrangement is largely associated with the right the lender has to re…

Implications for conveyancers of the draft Consumer Rights Bill

The UK Government has announced plans to merge all existing UK consumer protection laws and regulations. On 23 January 2014 the draft Consumer Rights Bill (the “Draft Bill”) was introduced into Parliament and is currently under review. It is likely that the Draft Bill will come into force during late 2015/early 2016.
There are four distinct sections of the Draft Bill relating to Goods, Digital Content, Services and Unfair Terms, that will impact retailers and their dealings with consumers.
The implications of some of these changes for conveyancing lawyers and their relationship with their clients are likely to be far reaching and will clearly need to be made the subject of early consideration.
Here are details of the main proposals in so far as they impact on the supply of conveyancing services.
Pre-contractual Information
The Draft Bill seeks to provide clarity on what representations and statements will be incorporated into the contract as terms, giving contractual force to…

Veyo - Raising more questions than its answering

Heather Cameron of Today’s Conveyancer recently interviewed Veyo’s Chief Executive, Elliott Vigar, in an effort to learn more about Veyo’s product which is scheduled for release in Spring 2015. 
Despite a recent statement to the contrary, Mr Vigar has now placed on record his company’s intention to release (into an already congested market), an online system which will essentially provide conveyancers with a case management portal.
On being asked what exactly makes Veyo unique from other similar conveyancing systems, Mr Vigar stated:
"Veyo not only covers the entire chain comprehensively, securely and quickly, but most importantly it’s unique because it allows conveyancers on both sides of the transaction to communicate in real time with each other, their clients and other stakeholders in the transaction. It has been designed with considerable input from licensed conveyancers as well as solicitors to ensure it meets the needs of the industry.”
Interesting comment.  
To begin with its …

New duty to warn other conveyancers of client's suspected fraud?

Scotland’s supreme civil court’s decision in Frank Houlgate Investment Company Ltd v Biggart Baillie LLP [2014] CSIH 79 has raised some interesting questions about transactional fraud and could have an important impact on conveyancer’s liability when they act for a dishonest client. 
The facts involve an investment company, the plaintiff, which lent money to the client of  the solicitor, the defendant.  The security for the loan was not owned by the client  and was in fact worthless.  During the course of the transaction the solicitor became aware of he client’s attempt to defraud but nonetheless continued to act and as a consequence of the fraud the investment company suffered a loss. Acting on the instruction of the client the solicitor did not warn the representative of the investment company of the fraud.
The three judges of the CSIH all agreed that the client’s solicitor was liable to the investment company for the losses , although they were not unanimous regarding the basis for t…

Veyo's Fundamental Flaws

The Law Society’s joint venture with Maestek UK has become a hot topic of conversation within the Legal Community and has in the main courted a great deal of  negative press from property practitioners.  The product to be delivered by Veyo is described on Veyo’s website as a ‘revolutionary home conveyancing portal’ offering to save practitioners ‘time and money’.  Speaking at a recent conveyancing conference Veyo’s Chief Executive, Elliott Vigar, announced that the launch of the product is still on schedule for spring of next year.
In this article I look to examine and discuss those areas of Veyo’s business model in which there is I believe some fundamental, and perhaps fatal, errors.
I must begin however with a disclaimer as well as a declaration of self-interest. I am not an expert in legal technology; though I must disclose that in 2011 I designed and built a risk and case management system (Quick Conveyance) with the help of one full time programmer.  The system was built on a ‘sho…

EPC Changes - Are you advising your buy to let clients about these?

The Energy Act 2011 contains a number of provisions which will affect owners and occupiers of property. 
Probably most significant are the proposed minimum energy standards. 
These changes will have a significant impact on the buy to let market and need to be considered now by not only investors, but also lawyers acting for those purchasing buy to let property.
From April 2018, the proposed legislative changes would make it unlawful to let residential or commercial properties with an EPC Rating of F or G (i.e. the lowest 2 grades of energy efficiency).
The significance of this which cannot be under estimated could mean that the marketability of certain properties would become impossible unless they were upgraded to meet the  minimum standards. It is estimated that approximately 20% of non-domestic properties could be in the F & G  rating brackets.

Although not clear at this stage the new minimum standards could apply to all lettings and re-lettings, including sub-lettings & assig…