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Showing posts from 2016

The New Build Ticking Time Bomb

Most large developers of new build property actively look to steer buyers in the direction of a ‘friendly’ conveyancer.  This step is taken for several reasons mainly to do with the developer’s desire to exercise a degree of control over the buyer’s solicitor.  The influence exercised is discreet but there is no getting away from the fact is exists and raises serious professional issues in relation to conflict of interest and independence.  I wonder how many of these conveyancing firms report this situation in accordance with Chapter 10 (Solicitors Code 2011) obligations and or in accordance with COLP reporting requirements.
This situation has come more into focus with the recent uncovering of failures on the part of some of these firms to advise fully on the mechanics and long term consequences of rent review clauses contained in leases.  It is claimed that this failure is widespread and could result in a wave of professional negligence claims.
Many buyers of leasehold new build prop…

The practical implications of P&P Property Limited v (1) Owen White and Catlin LLP (2) Crownvent Limited t/a Winkworth [2016] EWHC 2276 (Ch).

What should you do, and what exposure do you have when you act for a seller only to find after the transaction has completed that the seller is not the owner of the property but a fraudster?  

This was the very situation which a seller’s solicitor and estate agent faced in P&P Property Limited v (1) Owen White and Catlin LLP (2) Crownvent Limited t/a Winkworth [2016] EWHC 2276 (Ch).

Facts
An impostor posing as the real owner of the property instructed Winkworth to market the property and the First Defendant (‘OWC’) to undertake the conveyancing.  The impostor claimed he was living in Dubai and was looking for a speedy sale.   OWC carried out the usual identity checks (in robotic form only) and the sale proceeded with the purchaser P&P Property paying 1.03 million for the unoccupied property.
Upon completion the net sale proceeds were passed on to the purchaser. Subsequently the true owner when walking past his property was alerted when he saw builders ripping out the kitchen of t…

Conveyancing Panels - Marketing heaven or unwanted slavery?

Love them or hate them conveyancing panels continue to remain a predominant feature within the conveyancing industry.   The majority of these work on a model whereby a company operates and manages an electronic platform on which it allows third party associates such as a broker or an estate agent or lender to introduce a client to a solicitor who has become a member of the conveyancing panel.

The panel manager allows the broker or agent or lender to access a national network of conveyancers and provides the broker or agent to make a financial gain from steering the client to one of the panel’s chosen conveyancing firms.  This means that in addition to raising a commission for the work the broker or agent has undertaken, the third party is able to make some extra money through making the referral.  In many cases the client is oblivious to such an arrangement often following the agents/brokers recommendation  blindly.
In addition to this the panel manager is also able to secure a slice o…

Impact of Brexit on conveyancing and the need for a strategy

Love it or hate it we are now destined to leave the European Union.  

Personally I consider this to be a reckless move and one which will impact on the lives of not only those close to retirement like myself but also our children and grandchildren.  There is much talk of democracy and of how the people have spoken and made their voice known.  

I do get that but if every major decision in the governing of our country was left to the lottery of a referendum I am not sure we would still be living in a democracy. The risk of anarchy through ill-informed and disconnected decision making would be heightened.  Isn’t this why we elect people to Parliament to take these major decisions on our behalf?  Surely when the leader (former) of the Government (which the majority of the country voted in) is saying its best to stay in Europe and the people decide its best to leave, does this not in itself undermine the whole democratic process and the sovereignty of Parliament?
Notwithstanding some tricky …

Volume Conveyancers have not lost the plot - just plotting for the future

The Law Society Gazette under an emotive heading of ‘Ombudsman warns of dangers from ‘conveyancing factories’ recently reported in response to the release of a report from the Legal Ombudsman entitled ‘Losing the Plot – residential conveyancing complaints and their causes’ that ‘conveyancing factories’ pose a potential risk for house buyers. In the article Adam Sampson, the ombudsman, says: ‘increasingly commoditised automated and competitive’ conveyancing market has resulted in traditional high street firms evolving or being displaced into ‘conveyancing factories’.
The report acknowledges that such innovative services can be helpful, but warns they are ‘not without risk’. It voices concern that by focusing exclusively on volume, some firms risk failing to provide a reasonable service. A very general ( and perhaps unfair and misleading) finding, and one which it would be unreasonable for a consumer to rely on without further investigation. To begin with there is an issue of definition. W…

Conflict - Do I need to report to my lender client or not?

The scope for conflict in a conveyancing transaction when acting for a buyer and the buyer’s lender is extensive and is often overlooked by busy practitioners.
It is clear from the Court of Appeal decision in Mortgage Express Limited v Bowerman & Partners [1995] The Times, 1 August that in circumstances where a conveyancer acts for both the borrower and lender in the course of a residential conveyancing transaction, although the conveyancer’s implied duty extends beyond referring matters of title to the lender, the duty only extends to disclosing information that might have a material bearing on the lender's potential security or its decision to lend
In other words, matters which could lead to the lender’s surveyor/valuer reconsidering the adequacy or otherwise of the value of the security to be taken from the client to secure the mortgage, or the ability of the lender to sell the property quickly should the mortgage be foreclosed, or the clients affordability to repay the loan.

Unfair constraint on free choice of legal regulator

Changing from one regulator to another should not be difficult and should not be restricted due to the exclusive and unnecessarily stringent arrangements operating between one regulator and the insurance industry. 
How on the one hand can you introduce the flexibility of choosing a regulator that suits your business, and which will benefit the client, and then with the other hand have a rule which places a financial burden of such a magnitude that the cost of switching becomes totally prohibitive.  It simply does not make sense and makes a mockery of not only the role of the Legal Services Board but also the legal profession as a whole.
So, you wish for example to switch regulator from the Solicitors Regulation Authority ( SRA) to the Council of Licensed Conveyancers (CLC). A logical move if you are a conveyancer because  you wish to be regulated by a regulator who understands conveyancing and who has a focused interest in how the conveyancing profession should be allowed to be deve…

Are conveyancers over charging on ‘mum and dad’ assisted property transactions?

Introduction
The principle behind the insurance is that it protects the mortgagee’s (i.e. bank lending the money) title in the property if the donor of a gift or informal family loan goes bankrupt and  the donor’s creditors make a claim to the money as part of the donor’s assets.
But is it necessary?  Do all conveyancers actually understand the applicable law?

Background
The conveyancer is under a duty to both client and the client’s lender to ensure they obtain “a good and marketable title to the property and free from prior mortgages or charges and from onerous encumbrances which title will be registered with absolute title”(Solicitors’ Regulation Authority Handbook).
If there is a gift from a family member ( or a discounted purchase price when purchasing from a family member) or an informal loan the donor on the face of it will acquire an interest in the property. Gifted deposit insurance provides protection if the donor becomes insolvent and creditors of the donor make a claim putt…