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Showing posts from December, 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

Introduction
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…