Wednesday, 16 September 2015

Japanese Knotweed - A Case for Revising the Property Information Form

By Ben Pett - Trainee Solicitor

In recent years the subject of Japanese Knotweed has received a relatively significant amount of media attention. Far removed from the common garden weed, its rapid rate of growth has helped earn it the label as the UKs most aggressive, destructive and invasive plant(Environment Agency).

Failure to control it can land you with a fine and an ASBO, while in March 2014 an individuals paranoiasurrounding the presence of the plant on his property, was widely reported as a motivating factor behind both the tragic murder of his wife and his eventual suicide.

The plant has certainly acquired quite the reputation for itself, but just how much of it is media hyperbole?

While it is estimated that only 1% of UK properties have been affected, the impact of it on a Conveyancing transaction can be extremely detrimental to sellers, purchasers and lenders alike.


Property Information Form: Third Edition

When the Property Information Form (TA6) was revised in 2013, it was drafted to include a question about the plant. Now, as sellers and their conveyancers will know, at question 7.8 it states the following:

Japanese knotweed is an invasive plant that can cause damage to property.  It can take several years to eradicate.

It then asks sellers: Is the property affected by Japanese knotweed?

The choice of answers a seller can select are yes, noand not known. It is at this point, the actual worth of raising this specific question can be debated.

No

For the vast majority of sellers, the selected response will be no. But, there is a very marked different between a categoric nobased on a certain level of understanding, and merely stating nobecause it has not yet been encountered by the vendor.

Any representation about a property can of course have legal repercussions if the information is intentionally misguiding. If representing a seller there is very little you can do if this is the case, but
what can be done to ensure that clients are not making firm assertions without sufficient knowledge?

To avoid such uncertainty it could be advised that seller should add a caveat along the lines of: as far as I am awareto a response of no. This stems from how the plant can be hard to spot in its early stages. After all, most property owners are not horticultural experts.


Not known

This response can serve to trigger alarm bells when reviewed by the purchasers solicitors. A request, via an enquiry, is likely to be made for further information and perhaps a specialist survey .

Indeed, this emphasises the issue with the current structuring of the question on the form currently. The not knownanswer is arguably the most honest for the majority of sellers, but in reality it serves only to prompt the buyers solicitors to probe for further information.

From a sales perspective, it may be advisable to seek clarification from the client when reviewing the Protocol Documents if this response is selected. Again, a caveat along the lines of buyer should rely on their own surveyis to be recommended.

If this is the case, however, it is difficult to see just how the form has helped clarify matters at all from the perspective of clients or solicitors at the onset of a transaction. 

Yes

From a conveyancing perspective this is clearly the most straightforward response. If representing the vendor, it is imperative to ensure the client has taken action. A specialist contractor will be required to treat the affected areas, with the form requesting a copy of the management plan detailing the record of works carried out.

Sellers should provide this to the purchasers solicitors, who in turn should enquire to see if it can be transferred to their client and whether or not it is backed by insurance.

Of course, if representing a purchaser the lender cannot be ignored. The presence of Knotweed does not automatically prevent a mortgage from being obtained, with a case by case basis approach often adopted. Evidence of treatment is once again key, as is ensuring remediation works have an insurance backed guarantee.

The presence of the plant at neighbouring properties has also deterred certain lenders, but note this is not something the seller is required to disclose on the Property Information Form. This again limits the value of the form in this particular area, with once again buyers directed towards their own searches.

A case for change?

By including Japanese Knotweed in the TA6, its potentially devastating impact is at least being acknowledged. As things stand, it is perhaps not addressing the issue from the right angle.

A simple amendment to create a choice of yesor not as far as Im awarewould reduce ambiguity. Property owners who are aware of it affecting their property would benefit from transparency, which is a clear strong point of the form. But those who are not aware, would not have to make assertions about the presence of a plant that they perhaps are not qualified to make.

MJP Conveyancing are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877067 or via email at david@mjpconveyancing.com

Wednesday, 9 September 2015

Open Letter to the President of the Law Society - Conveyancing Fees

Open Letter to the President of the Law Society - Chancery Lane, London


Dear Sir,


I am a practitioner who manages a practice which provides residential conveyancing services to clients nationwide.  

I have over the past 5 years worked hard to introduce efficiencies as well as measures to combat the increasing risks which continue to arise.  Much of the work has centred around the development of an ‘in house’ risk and case management system.  I along with my co-directors have invested a large amount of time and money to ensure we have a business which can compete with larger conveyancing practices and which more importantly can offer our clients a safe and efficient service.  It has not been easy and apart from an understanding Bank we have had no help or support whatsoever  from the Law Society or any other body.  

Instead we have had to adjust and  show complete flexibility to accommodate the ever increasing flow of regulatory and compliance hurdles thrown our way.   As conveyancers we are required to fund not only our own overheads but also the cost of money laundering checks and the long list of statutory and  other compliance requirements.  Indeed we have had to employ one person who spends all of her time watching out for changes and making sure these are applied within our practices. Tracking as we do the number of hours we spend on each type of transaction it is clear that the hourly rate we receive from providing a good and reliable service is barely above that paid to our office cleaner! 

It never gets any easier, and indeed  if there is at the end of the day any profit left  within a conveyancing transaction it is almost lost in discharging these obligations and taking out PII insurance.  The  financial pressure this imposes is highlighted in a an article which appears on your Small Firms Division website written by Mark Carver : ‘Conveyancing - is the reward worth the risk?’

In this article  Mr Caver makes the following salient observations:

‘In real terms, solicitors are earning less now than they did 10 years ago from conveyancing, with average fees increasing by 36.5 per cent – significantly less than standard inflation for the same period (40.63 per cent). This is in stark contrast to estate agents, who have clearly benefited from the increase in property prices as their earnings are linked to the sale price, and to a lesser extent, surveyors, whose fees have increased above the level of inflation’

‘Not only are solicitors getting paid less for conveyancing than in 2004, but the potential risk is significantly higher, driven primarily by an increase in property prices’

‘Even firms fortunate enough not to experience a conveyancing claim should be aware that approximately £100 of an average conveyancing fee will contribute towards professional indemnity insurance premium for the transaction’.

These are findings which do not come as a surprise but are still nonetheless alarming and must on any interpretation be viewed as a stern warning.   Unless something is done, and done soon, to address the imbalance between fee income and the increasing risk,  high street conveyancers like ourselves will, despite our efforts, be condemned to history. 

Its shocking that through inactivity and unnecessary distraction in projects like Veyo the Law Society has allowed this situation to continue  unaddressed for so long.   The time has now come for action to be taken to reverse this trend and to make sure that conveyancing is not seen as a worthless and inferior profession.  

So some questions for you to answer please.

How much has the Law Society invested in Veyo?

Was any thought given at the time Veyo was conceived about spending the money on forming a strategy to  see how the difference in value attached to the fees of a professional conveyancer and those of estate agent and other  property professionals could be addressed? 

Why is that as a profession  our indemnity insurance is one of the highest when compared to other professionals?

Do you consider  the Law Society has discharged its duty to its members by failing to protect its members who undertake conveyancing  from suffering a severe erosion in the level of their fees at a time when the burden of compliance and other risk management has increased substantially?

Finally, what do you intend to do to make sure action is taken to address this concern?

Yours, 


Friday, 4 September 2015

Do we really need conveyancing awards?

We are about to enter the season of conveyancing awards and in this article I consider the question of whether we should view this as ‘silly season’ or a season to recognise and celebrate the success of those who are held out to be to be best conveyancers in the Country. 

I must start by admitting that I was persuaded last year to enter my business into one of the national competitions.  I was reluctant to do so but decided  I had nothing to lose apart from some time and a relatively small entrance fee.  

Surprisingly we  were shortlisted for a prize and our expectations were raised  but only to be dashed on the day of the awards when speaking to others at the awards dinner that we were told  that  we stood no chance whatsoever  of winning.  This naivety was soon revealed as correct when the winners were announced.  It seemed the seasoned entrants had an uncanny skill of predicting the winners!

Not to  be deterred and having a stubborn streak to prove everybody else wrong we entered the same competition this year and as secretly anticipated on enquiring ( and  after having received no prior notice ) we were told that we had not made the shortlist.  

So how are the ‘winners’ chosen?   

One might expect there is a call out of the blue to say your business has been nominated by a number of satisfied clients and you then turn up at the awards ceremony to see if you have won.   Not quite.   Instead you have to sign up and pay a fee.  You then have to complete an application form to say how fantastic you are and why you consider you should win the award.  This is then followed by a telephone interview involving an interviewer who has the status of a conveyancing expert.  You are asked questions and are rated on your performance.  There then follows a ‘secret shopper’ call.  Its only one call so if your new business team are not on the ball on that one occasion you will lose points. The experts then meet to choose a winner.  The experts are chosen by the organisers and come from various different areas of the conveyancing spectrum. 

A simple format and one that can be easily manipulated especially if you are fortunate to have a good PR team on hand.  A team that can help you with the application form and can brief the partner or director who will be involved in the interview. As for the mystery shopper, most businesses are good at getting new work in and whether or not the response to the mystery shopper is good or bad it really is not the most informative means of assessing the ability or otherwise of the business to undertake conveyancing work. 

This leads me to the question - how can you objectively conclude that one business is better than all of the other businesses if a) not all of the other businesses enter, and b) there is no engagement with the clients who must clearly be in the better position to express a view on the level of service offered. I acknowledge that the assessment carried out can help to see if a business is focused and committed to providing a quality service but its hardly a means of identifying a business which offers a quality conveyancing service better than others in that particular region.  There is a difference. 

At the end of the day the question one must ask is does it really make any difference or indeed matter who wins these awards.  Can those who come away with the kudos of an award say with any validity that it has led to an increase in work.  Most clients these days are won at grass root level, recommendation and or price.  Saying you were the regional winner of some national award from a company which has no meaning whatsoever to the consumer is unlikely to have any real influence.  Its about pride and the massaging of egos and nothing else. 

So if Heineken was running an awards ceremony how would they approach it.   On a practical level it would probably prove problematic.   My view is that a criteria based on client feedback, efficiency and staff morale levels would be a good start.  Being a good conveyancer is not about how well your PR machine might be, its about efficiency, speed, safety in terms of compliance and client satisfaction. 

As long as there are egos around there will always be companies around to exploit that hunger for recognition and for that reason the phenomenon of winning awards will always be an attraction.  For those who work hard, make a decent profit from efficient processes and who know from feedback that clients are happy and are returning, the message must be carry on as you are and do not lose sleep when you next read about business X winning a national conveyancing award.   

MJP Conveyancing are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877000 or via email at davidpett@m-j-p.co.uk