We need to do more to protect our clients money

The recent report of a significant loss suffered by a client following the interception of an email by a gang of fraudsters has sparked a debate about the suitability or otherwise of communicating with a client via email especially as regards the exchange of financial information. 

Mr and Mrs  Lupton sold a fla for £340,000. Two days before the set completion date of February 27, Mr Lupton’s solicitor, Perry Hay & Co in Richmond, Surrey, emailed him requesting his bank account details for the sale proceeds to be paid into.

Mr Luton replies and unfortunately for all concerned the email was intercepted by fraudsters.

Posing as Mr Lupton, the fraudsters emailed Perry Hay & Co again instructing them to disregard the previous details and send the money to a different account instead.

The sale completed and following the discovery of the fraud the account was frozen and £271,000 was returned to the Luptons but the balance of £62,000 had already  been withdrawn by the fraudsters. 

Speaking to the Daily Telegraph, Robert Loughlin, executive director at the SRA, said: “We are very concerned about this continuing activity. The fraudsters are highly sophisticated in their approach. All firms should ensure that their own, internal systems for guarding against scams are up-to-date and that staff know how to implement them.”

Unfortunately the SRA dis not seize the opportunity to provide guidance.    There is an element of common sense involved  but this is easy to say in the cold light of the day but less simple to implement faced with the intensity and pressures of a busy day of completions. 

So what can be done to reduce the risk of falling victim to fraud?

Some commentators speak about the need of encrypted email but I question whether this is a practical solution and more to the point one that is really necessary. 

The first and most important step is to make sure there is a very clear and coherent policy prepared on how to deal with the transfer of client funds and to make sure every single member of your business knows the policy and knows it by heart. 

The policy should make sure that any bank details supplied to you by a client should always be verified by calling the client and taking the client through some security questions.  That is questions to which only the client would know the answers.  You should avoid questions such as date of birth, file references and any other information which a determined fraudster may have gleaned. 

I also recommend that you should always ask the client to send through a copy of the bank statement relating to the account into which the money is to be paid.   This can then also be used to verify the bank details.   I know a bank statement can be replicated but if you have asked the client to forward this to when speaking with the client over the phone the chance of a fake statement being sent through is remote. 

I also suggest that significant sums of money should only be retuned to clients after it has been authorised by a director or partner of the firm.  This will add a second layer of security since the director or partner can then check that the policy has been followed. 

We operate in an uncertain world full of people who operate tirelessly to defraud others - we must be more vigilant and careful with  our clients money. 

Interestingly, following the crime, Perry Hay & Co said it did not believe it was at fault and that the Luptons would have to suffer the loss.  I am not sure about that! 

Morgan Jones and Pett 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

How will the outcome of the 2015 General Election affect the new build market?

The question of whether we will be living under a red or blue, or a mixture of both, Government will soon be known.  How this will affect the new build market is also unknown and has created some uncertainty.

So what is likely to happen going forward, depending of course, on who lands up as the governing force.

The Conservative Party has committed to build 200,000 starter homes (built for first time buyers aged under 40 with a 20% discount) and 275,000 affordable homes by 2020.  Relatively small numbers and it is no clear whether the latter is in addition to the 200,000 starter homes.  The Labour Party is also looking to build a similar number of starter homes by 2020 and has committed to the establishment of a Future Homes Fund for investment in increasing housing supply.

It has similarities with the Liberal Democrats idea of a Government backed Housing Investment Bank to provide long term capital for major new settlements and to help attract finance. The new home start figure for the Liberal Democrats is set higher at 300,000 each year. They also commit to set in motion at least ten new Garden Cities.

Looking to make it easier for those looking for a home in the area in which they live is high on the priority list for Labour and they have promised to give priority to local first-time buyers in new housing areas.

In an effort to encourage owners of empty properties to sell Labour will be looking to allow local authorities to charge higher council tax on empty house.  The Conservatives have outlined plans to unlock and allow development on certain brownfield sites to enable 400,000 new homes to be built. Again it’s unclear whether this is an addition to the 200,000 new starter homes and 275,000 affordable homes.

This is all well and good and shows a broad acceptance across the parties of the need to build more new houses and to make these affordable to those looking to get on the property ladder.  The numbers proposed are however relatively small and do not meet ( apart from the Liberal Democrats) the 250,000 new homes each year that some commentators consider to the correct number to keep up with demand.  The truth is that we have never come close to this figure and as long as we fall behind with development economic recovery will remain volatile, rents will continue to rise and the cost of buying a property and keeping hold of it will remain an issue for many. People on ordinary incomes should be able to buy or rent a high quality home at a price they can afford today, and have confidence they will be able to afford tomorrow.

The major problem which none of the main political parties have so far fully addressed is the lack of competition in the new build market.  By 2012 70% of new homes were built by large house building concerns.  This is not surprising when land is so expensive and only the larger developers can afford to purchase.  The issue is that they all approach development in the same way, that is to minimise build cost and maximise sale prices by releasing homes slowly.   If there is a downturn in the market they reduce output and this contributes to a deepening of the problem.  So what happens is that output only increases when there is an acceptable level of house price inflation.

So in short land needs to be made available at a price which will enable smaller and less resourced builders to compete and or those smaller builders and developers need access to affordable finance to allow them to build good quality homes at affordable prices.  I will not hold my breath!

MJP Conveyancers 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

Veyo has the momentum but will it prove to be a winner?

Much of the negative press generated by Veyo has emerged in my view from what can only be described as an identity crisis.    An issue which has caused some analysts and potential clients confusion about Veyo’s objectives and long term aims.   This lack of a clear and consistent message is a little difficult to understand when one acknowledges the success of Veyo’s branding and its PR machine.  Indeed it has within the last five days picked up five prestigious marketing awards.  So what has gone wrong?

I recently met with Stefanie van den Haak Veyo’s Commercial Director to put this and other questions to her.  My first impressions was this is a lady with a mission and one which she is determined to make a success. Stefanie is a lawyer and has much experience, as well as a good track record in bringing to the legal market intuitive and much advanced technical based products. She has held senior sales and business development roles at Lawtel (Centaur Media) and Thomson Reuters where she was instrumental in bringing Westlaw, the primary online research services for lawyers, to market. She was also EMEA Sales Director at Cambridge University Press.   She clearly knows her market and the difficulty of overcoming the inevitable hurdles of introducing technology to a very traditionalist legal community.

She struck me as someone who is passionate about her work and is relishing the challenge which she acknowledges she will face.

So what has gone wrong?   Stephanie says she inherited when joining Veyo a team which lacked direction and which struggled to understand the correct message to convey.    She has now understood the need to be more transparent and to acknowledge that Veyo is a case management system and one which will compete with existing case management systems.   The time has come according to Stefanie to declare that Veyo is in business to compete with the other case management systems and to deliver a system which will revolutionise the tools currently available to manage and advance conveyancing transactions.

Hooray – at last we now know Veyo is a case management system which has features which will distinguish it from existing case management systems and which if successful will bring conveyancing into the 21sts century.   So what distinguishs it?  Unlike other systems Veyo will allow solicitors to collaborate online and to move away from traditionalist practices. Bye-bye to pigeon post and the delays associated with it.  Good bye to the restraints and delays caused with antiquated means of communication and hello to an age when the consumer’s interests are put first.  Solicitors speaking with each other and collaborating on documents in real time and thereby making the conveyancing system far quicker and efficient.

As I have said before Veyo heralds a radical change in approach to conveyancing and one which is well overdue. With Stefanie leading the way and with the strength of belief in the product there is a glimmer of hope that a revolution is about to be born. 

Despite the drive and optimism evident in the positive language Stefanie uses I still have reservations about the future of Veyo.   The product will undoubtedly be good and reliable – it comes from a very good stable and one which has an excellent track record.  It will clearly deliver what is says on the tin and will give conveyancers the tools to communicate with each other electronically and to make the conveyancing a more enjoyable experience for everyone.  I have no doubts about this.  My reservations centre around take up of the product and the need to recognise the importance of a change in philosophy towards the approach to conveyancing.  

According to Stephanie Veyo is looking to achieve a 90% share of the CMS market within six years.  Clearly if this can be achieved Veyo will become a roaring success and investors in Veyo will see a good return on their investment. The question is can such a target be reached within what is a relatively short time frame?   Everything is possible but there are hurdles some bigger than others. 

There are firms out there are technology savvy and which will embrace the values of Veyo and its objectives. However will these firms be sufficient in number to provide Veyo with the critical mass it requires to make the collaboration and chain view tools the success they deserve to be? 

I continue to have my doubts that the conveyancing community as a whole will prove to be receptive to such fundamental changes.  How many conveyancer are out there who are ready to move to electronic files, to begin communicating with each other electronically and to collaborate online with other firms?  Some may say they are ready but have not thought through the consequences of making such a radical change.  As I pointed out to Stefanie there are a number of firms who don’t wish to change.  They like the client contract and the traditional practices of managing a transaction with a dictation machine in one hand and a pile of files in the other.  They have always worked this way and probably see no reason for changing.

So for Veyo to be the success which Stefanie and her team (and shareholders) hope it will be there is a need for those who have good case management systems to abandon those systems and convert to Veyo, for those who do not have a case management system to adopt Veyo in preference to other systems, and for those adopters to embrace a huge leap in technology and the way in which conveyancing is processed.

Do I think Veyo will succeed?  Meeting with Stefanie has change my view slightly.   Her belief in the product and ability to sell in a market which is in desperate need for change and for a product of this type is compelling.  I am just not sure however it’s enough.  I know how difficult it is to persuade lawyers particularly the traditionalists to change processes and to adopt and embrace technology. Looking to bring about a change in philosophy may prove to be a more difficult challenge than might first appear. 

On top of this is the cost factor. £20 per transaction is not a lot of money and given the benefits which are included represents good value.  The problem is are firms with existing case management systems willing to pay for two systems at a time when profit margins are very tight.  Despite the low cost of the system one cannot ignore the economics.   Perhaps we will see some firms abandoning existing systems and moving to Veyo.

Another hurdle to overcome is the fear of might happen in the future.   If Veyo achieves a monopoly can we sleep safely knowing there will not be a sharp price increase in the future?  What if the Law Society connection is severed and Veyo moves into the conveyancing market as a provider of conveyancing services?  What will happen if Veyo uses if position in the market to begin dictating to users the choice of search and other third party suppliers?  In short would it be good for the conveyancing market and indeed the consumer for Veyo to have such a large share of the market.

I am sure now Veyo has come out of the closet and announced its arrival as a case management system that those already in this market will not sit back and allow market share to be eroded but will fight back and introduce innovative technology which will compete.  Those who do not take this as a wakeup call will surely not survive particularly when one has regards to the determination and drive which I witnessed when speaking with Stefanie.  She is not a loser and will clearly do all she can to make Veyo a big success.

Morgan Jones and Pett 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

Don't put your client's conservatory at risk

The very first thing to establish is whether what you are building actually is a conservatory. 

There is no definition in the Regulations of exactly what constitutes a conservatory. This can make it hard to judge whether what is built will be be regarded by your Local Authority as a conservatory or an extension. 

This is crucial as as extension usually requires planning consent and is subject to greater building regulation requirements, while a conservatory usually does not require planning consent and the building regulation requirements are much more relaxed.

Conveyancers are good at asking questions about the planning and building regulation consent history behind conservatories forming part of properties being purchased, but less attentive to analysing and applying the answers received.  

Below are some general questions ( with guidance on how to treat the answers) which may help. They are not definitive and you should always when considering these matters have reference to the Planning Portal. 

Was planning permission required?

Is there a wall within the existing external dwelling which exists between the dwelling and the newly constructed conservatory? If there is not then the general rule is that the work will be viewed as an extension and planning permission would be required.

Was building regulation approval required?

Is it built at ground level?   If not and is more than a single storey in height then building regulation approval would be required.

Does it have a floor area of less than 30 square meters i.e. the same as a parking space for a car?  If it is more, then building regulation would be required.

Does the glazing comply with Part N of the building regulations?  If not then building re building regulation would be required.

Does the electrical work have its own ring main, or is extended from an existing room classed as a special location, such as a kitchen? If so it must comply with Part P of the Building Regulations, which deals with electrical safety. If not then building regulation approval would be required.

Does it have an independent heating system with separate temperature and on/off controls? If not then building regulations would be required.

Is there a new opening within the existing dwelling which creates access into the new conservatory if so then this will require building regulation approval? 

It is important to note that even if building regulation approval is not required for the conservatory construction the glazing and the electrical work would still need separate consents.

Keep also in mind that if you are acting for a purchaser and have concerns about consents it is important to check the detailed requirements which you can find on the Planning Portal: http://www.planningportal.gov.uk/permission/commonprojects/conservatories/

Care must be taken because if a problem subsequently emerges then enforcement action can be taken by the Local Authority, which could result in the demolition of the extension.

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

Veyo - A Trojan Horse?

The Veyo PR train continues to gain momentum with the bold announcement the week of attracting ‘orders’ in its yet to be released on line case management system from ’47 %’ of the conveyancing fraternity. 

Talking in the Law Society publication - Law Society Gazette - Stefanie van den Haak, commercial director of Veyo, said: ’The number of enquiries since the pricing was announced has been phenomenal but we are not complacent. We know we are offering something that is unique and we need to continue to promote our USPs. We are keen that conveyancers see for themselves that there is nothing comparable in the market.’

Going on record, and claiming such a significant number of potential customers is a bold step, and one which will either herald the onset of a conveyancing revolution or the start of a slippery slope for those investors behind the product, which includes of course the Law Society.   Ten million of pounds is a large sum of money to gamble, and on top of this also lies the professional reputation o a body which has been representing  and governing the interests of solicitors since 1875. 

So where does the truth lie?  Are conveyancers flocking to offer support for the product or is it the consequence of a well managed and orchestrated PR machine?  There is no doubt that Veyo has succeeded in the promotion of its brand as well as making Veyo a hot topic for discussion.   Hats off to Miss Vanden Haak and her team.  Even though much of the discussion has focused on negative features of the product, the fact is that any publicity whether it be good or bad must be a welcome outcome for Veyo.   

So in answer to the question, I very much doubt that half of the conveyancing businesses in the Country have ‘signed up’ or even at the very least registered an interest with Veyo.  I suggest the  claim is nothing other than ‘sales talk’ designed to appeal to our inherent sheep  gene.   If there is any truth in the figure it must represent a measure of the level of curiosity that  clearly  exists. Its out there in abundance. Curiosity however is one thing, from an investors point view hard cash is all that counts.  

One must also question the perimeters of the basis on which the claim is made.  The Land Registry has over 7000 firms registered with conveyancing interest.  So does this mean Veyo has received firm orders from over 3000 businesses?  I say ‘orders’ because this is how it was stated in the press release. Sounds fanciful, but clearly would if true, represent an epic achievement on the part of Veyo’s sales team.  

One should also ask how many completions do these 47% of conveyancing businesses produce each year, and what percentage of the overall completions number for all firms does this represent.  Keep in mind that the top 200 conveyancing business have around a 36% to 40% share of the market. 

I can understand why there is a need  for the statement to be made when the commercial success of Veyo hinges precariously on the products purported unique selling point.  Indeed Miss Vanden Haak makes specific reference to the importance of this in her statement.   So what is the USP?  Difficult to tell at this stage but it seems to centre around a ‘chain matrix’ and a ‘deal room’.   These features may explain why Veyo needs to convince us all that it already has accumulated critical mass since without this the product losses its USP.  It is as simple as that.  What is the point of singing up and parting with you hard earned cash if all you  are left with is an incomplete picture of a transactional chain?   The Land Registry spent  millions of pounds on a similar project which it then had to abandon in 2009 because of lack of interest. I am not sure why Veyo believes the market will take a different view now, especially when it will involve having to hand over money for the privilege. 

Only time will tell if the statement is true or not.  One thing is for sure that even with 47% of conveyancers as users this still means there are 53% who are currently not interested and unless these firms can be won over the platform and its USP will become meaningless.   

Just a thought.  If you were an investor in Veyo I am sure you would be thinking of Plan B to cover the prospect of the product nose diving.   It seems obvious to me that one plan B must be for Veyo to enter the market as a business offering a conveyancing service of its own. It already has the profile and brand awareness as well as, if you believe the hype, cut throat technology.  A trojan horse in the making.   The only thing that would prevent this from happening is its commercial tie with the Law Society.  Now that would be a story! 

Morgan Jones and Pett 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

Ten Reasons for the likely failure of Veyo

1.       Lack of Identity

I have made this point before, but despite the sea of negativity it has received, Veyo continues to be promoted without a clear and recognisable identity.  On one hand it says it is a case management system, but on the other, depending on the audience it is addressing, it says it is not. Despite recent announcements nobody, as far as I can see, is any the wiser as to what role Veyo will play in the conveyancing market when it is released. 

2.       Lack of USP

On the back of a lack of indemnity is the absence of a USP.  There is talk of a ‘Deal Room’ and of how this will promote collaboration between parties as well as a ‘Chain View’ allowing those involved in a chain to keep updated on progress of all of those involved in the chain of transactions.  A valid and brave objective, but how can it be sure that this will remain unique even if it proves practicable?  I know there are a number of well-established case management suppliers working hard at the moment to introduce similar features.  Once these become universal where will this leave the Veyo business model? Moreover, for this to prove to be a commercially successful USP, Veyo will need to see the vast majority of the 4,500 firms who undertake conveyancing to sign up to their promise of their conveyancing revolution.  Is that really going to happen? It will only take one party in the chain not to ‘buy in’ into the USP for the whole stack of cards to come crumbling down.

3.       Pricing

Why announce pricing before the product is available for viewing?   A £20 per transaction price tag seems on the face of it to be reasonable, but until we know what we will be getting for it, how can this be objectively judged. Furthermore, if this is going to be the price for both small and large providers, do Veyo really believe that the main players in the market are going to pay for a service over and above their existing services, which is unlikely in reality to add anything of real benefit?  The top five national conveyancers completed in January on around 7284 purchase/re-mortgage transactions (Land Registry Data). On top of this they would have also completed on around 3500 sale transactions.     So take as a monthly figure of transactions of 10,000, and apply to this the £20 transaction fee this would give a yearly financial commitment to Veyo if there were all to sign up, of a staggering £2400000.00!  How can this make commercial sense when for this money they could quite easily invest in similar enhancements to their existing systems!  The reality is that it will perhaps only be those who are doing a moderate amount of conveyancing work that may be persuaded to pay the fee.  The question is whether this type of take up would be enough to satisfy Veyo’s shareholders. Only the accumulation of critical mass will be its saviour.

4.       Not making the system free of charge

This ties in with three above, but represents a massive commercial mistake on the part of Veyo.  By making the system free, at least for a trial period, would have given practitioners the opportunity to evaluate the benefits of the system, and to be persuaded or otherwise by its features.  This would at least encourage those with curiosity to take a look.   Veyo could by making it free to join look to make money on the resale within the platform of third party services, by allowing for example search providers to offer the platform as an added value product. 

5.       Lack of reality on the  success of engagement with existing case management providers

Reality will dictate that existing case management suppliers will not sit back and allow Veyo to step in and eat into their market shares without a fight.  Why should they?  Until Veyo announces and clarifies the benefits of integration and offers to underwrite the cost of this, so that the practitioner has to pay for it, why would a CMS wish to hook up with the system of a competitor?  Unless I am missing something fundamental I just do not see how and why Veyo believes practitioners will be knocking the door down of their CMS providers to integrate.

6.       Underestimating the level of desire for practitioners to engage with forward looking technology.

If Veyo delivers what it says it will, is there a critical mass of conveyancers out there who will be prepared to change the way in which they work to encompass the vision of online collaboration and online engagement with clients and estate agents?  I doubt it.  Conveyancers are in the main traditionalists who, even if there was no charge for accessing the system, would still hesitate to sign up to a method of work which remains for a vast number, alien.   There needs to be major shift in outlook of use of technology,  which I do not consider currently exists within the profession. 

7.       Focusing too much on the consumer and not the practitioner

Much of the PR surround Veyo has focused on a campaign aimed at the consumer.  Veyo appear to be of the view that if they can present a picture to the consumer that Veyo will provide the answer to the dissatisfaction many consumers have about delay when selling and buying a property, this will force the consumer only to use a conveyancer who uses Veyo.  The logic behind this vision is that consumer demand will then leave conveyancers with no option but to buy into Veyo.  I believe this to be a misplaced vision because it is clear that although consumers would like to see transactions moving more quickly most home movers are more interested in factors like price, locality of the conveyancer and reputation.  I really can’t see a home mover turning down a quote from a competent conveyancer just because that conveyancer is not a customer of Veyo.  The Law Society should know from past campaigns involving its beloved CQS that there still remains an overwhelming proportion of home movers who have no idea what CQS stands for, let alone the benefits of engaging a firm who has the credential.

8.       Lack of clarity about mandating

Veyo continues to play its cards close to its chest on mandating and on the role it will adopt in the future in the delivery of the CQS accreditation.   There is one thing in life which has the effect of turning practitioners off and that is the thought of having to be forced to do something which they do not believe to be is in their best interests, or that of their clients.  Look at what happened to the mandating of home information packs and how the conveyancing industry rebelled against it.  No professional body should allow itself to make decisions about the affairs of their members which are commercially motivated.  Veyo has already said there will be no mandating but there remains scepticism and for as long as this remains there will clearly be a number of firms who will be holding back at this stage.

9.        Underestimating the future viability of Lender Exchange

Some may forget that we already have an established system used by the main lenders as a means of verifying panel members and for facilitating communication.   Veyo has said it is likely lenders will mandate Veyo.   By saying this they are blatantly ignoring the presence and success of the Lender Exchange and the fact that the lenders using it are probably tied into the system for a number of years in any event.   Unless Veyo can acquire critical mass in a very short time frame I really cannot see lenders contemplating the mandating of the system.  

10.     Arrogance  

    Practitioners need engagement to feel that they are part of something and have helped develop it.   Despite claims to the contrary Veyo has developed a product without meaningful recourse to the profession and the suppliers of CMS.   This has created a huge amount of resentment and negativity, and even though Veyo has started to open up and engage it may be the case that this has happened far too late in the day for the damage to be repaired.   Nobody likes arrogance and it will take some time this perception of Veyo’s approach to fade.  The golden question is that does Veyo have enough money in the bank to ride out the storm of negativity which continues to brew and blow strong.   

Morgan Jones and Pett 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

Tips for parents helping their child onto the property ladder

Helping your child onto the property ladder has become a natural and common thing to do these days. 

There is however more to this than simply handing over the cash.  In this article  we look to highlight some pointers which every parent should keep in mind when planning to provide financial assistance. 

The first point, and one which is pretty fundamental, is to consider whether you can purchase the property outright.  If this is not possible then you will need to do some research to find the best mortgage product available.  Lenders are more vigilant than ever during the mortgage application process  and it is therefore essential to be honest about your financial circumstances. Don't exaggerate your income to secure a larger mortgage. If you are helping with a gift and your child is applying for a mortgage make sure they disclose your gift to the lender.  

You may be  advised to make sure you put your names on the title deeds.  You will need to ensure the property is registered at the Land Registry  with you and your children holding as tenants in common.  This means  in the event of the death of one of the owners the deceased’s owners stake in the property will pass in accordance with his or her will.  So make sure you also update your will. Also keep in mind what will happen to the property and your child’s home if you were to die. 

There will if you are named on the title deeds be tax implications so make sure you talk through your plans with a tax expert before you commit. 

If you don't wish to be named on  the deeds then make sure your intention when making the money available is clear.  Is it a gift or a loan? If its a loan will you be charging interest?  

Even though they are your children you will need to seek independent legal advice. See a solicitor and get a legally binding agreement drawn up. To safeguard a loan or investment, make sure it stipulates the nature of any arrangement and steps are taken to ensure the property can not be sold without your consent.  Keep in mind that if you are making a gift and not taking a stake in the property your child’s solicitors will require you to provide evidence of identification and the source of funds which you will be using. 

There are other options available.  You could offer to be a guarantor for your child to get a mortgage.  You could look to remortgage your property.  Its best to explore all options with an independent financial advisor. 

Finally  take care - don’t put yourself in a financially risky predicament by overextending yourself and don't assume that mortgage interest rates will remain at the same level. You shouldn't rely on your current good relationship with your child – things can go wrong. 

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 davidp@mjpconveyancing.com

Understanding Leasehold title plans

In October 2014 the Land Registry changed its policy on how it creates Leasehold Plans.

Before the 20^th October the Land Registry looked to replicate the intricate details from the large leasehold plans showing the precise layout of property at a large scale.

The problem with this was that this was often potentially misleading when considering the smaller scale Ordnance Survey maps used by the Registry.  

A review of this practice revealed a variance in approach and for this reason a change in policy was needed to make sure that the focus on the mapping of leasehold floor levels was put back on the lease plan.

The new policy still requires the Registry to show the extent of the land in a lease but when it comes to dealing with larger developments this is more likely to be recorded on the landlord’s title with the tenant’s title plan showing only the outline of the building as shown on the Ordnance Survey Plan

By adopting this new approach the Registry hope it will be easier to understand the position of all the leases granted out of a registered title in relation to each other on one title plan.

Completion of a leasehold floor lever registration, according to the Registry, without any limitation in the extent of other rights, interests demised, guarantees the title granted to the tenant notwithstanding how the red edging on the title plan is drawn.

However these changes in policy will no impact on the results issued on searches of the index map, 0S2 applications and a Map Search.

In practice we will be seeing a change in the note attached to the tenant’s title plan.  This is now likely to record that the land will lie within the area edged red but which is more particularly described in the lease or leases.

None of these changes impact on the need to submit a Registry compliant plan when registering a title for the first time - that is making sure the following requirements are met:

• a site plan showing detail in relation to the Ordnance Survey map

• plans of each floor level

• a recognised scale for both the site plan and the floor level plans

• a North point

• clear edging showing the land demised by the lease. The location plan and the      detailed floor level plan can be separate plans.

The Veyo revolution is a non-starter

I read recently that the Law Society joint venture Veyo intends to bring residential conveyancing into the 21^st century.    A revolution is on its way?  Well, this is what the Law Society would like us to believe.

So much so Veyo has and continues to spend a vast amount of money on its attempt to convince professionals and the homeowner that despite working within the tight constraints of an archaic conveyancing system, which has more or less remained untouched since the average weekly wage was about £5, its online portal with functions to allow a client to communicate with his or her solicitor without picking a phone up, will magically speed up the conveyancing process.

I am not sure whether its naivety or sheer arrogance on the part of those behind Veyo, but one thing is for sure, the product which has yet to materialise, is not, despite the claims to the contrary, a magic bullet to cure what are and continue to be a fundamental flaws with the home selling and buying process as well as the approach adopted by some conveyancers operating within it.

To be fair to Veyo there is a lot to be said for highlighting to some conveyancers that the time is now to ditch the pigeon post, to question whether there really is a need to operate with secretarial staff, and to provide a service which allows online collaboration between conveyancers and online interaction with the client.   

Not only are these changes essential to be able to compete with volume conveyancers they should also, per se, shout out as making complete financial sense.   Conveyancers who are looking to survive the constant onset of challenges must make these changes soon or face extinction.

The claims made by Veyo to the consumer that is holds the answer to the long delays and frustrations some home sellers and buyers experience are disingenuous in the extreme.     Yes, I accept there is a need for an improved and more transparent line of communication between those involved in the process especially with the client, but unless the philosophy and approach towards conveyancing changes no online portal on its own bring about the changes which are desperately needed to ensure both professionals and homebuyers/sellers are able to enjoy a less stressful conveyancing process.

There is no sign that with an election looming of any of any move by the main political parties to bring in changes to the conveyancing process.   The shambles surrounding the introduction and withdrawal of the Home Information Pack debacle has clearly taught politicians that changes to land law and processes is a total ‘no go’ area. There is no political appetite for change and we are therefore resigned to the fact that the system which we have is unlikely to be reformed probably for a further 100 years!

So where does this leave the homebuyer/seller? Is Veyo going to turn out to be the saviour, the consumer champion?   This is their idea though I suspect at best history will show it was the catalyst which the conveyancing industry needed to spark the fuse for long overdue enlightenment.

Veyo and other IT providers can provide the tools to assist the conveyancer to make changes, but what they cannot do is force some conveyancers into adopting the changes in their own processes and approach to work which are required before significant improvement will be seen.

So what is needed to start the revolution?

The starting point is the need to lose the legacy which holds a number of conveyancers back.   Just because it is the tradition do certain tasks in a particular way does not mean that way is the only way or is indeed financially efficient.  For example, we use our own in-house developed software to engage collaboratively with the client and the buyers solicitors when going through the additional enquiry process.  We invite clients and the solicitors to engage in the process.  Significantly we have no trouble with the client but looking to engage the buyers’ solicitors has proved far more problematic.  ‘Can we please ask you to send to us your replies on paper’, is often the response. Others say ‘we are unable to access the replies’, which is often code for ‘ We can’t be bothered to go on line to see the replies!’.

Another legacy is the long flowery letters which the dutiful secretary has painstakingly typed.  Why?  Lawyers should all be capable of writing in succinct and concise terms and what is the point of dictating and having typed information which can be standardised and communicated in template electronic notes? 

How may conveyancers scan their post and other written communication?  The cost of the scanner is reasonable and by operating with an electronic file is not as alien as some may believe. The problem is there is no mind set or ambition to change to explore innovation of this type.

Veyo at the end of the day has the right ambition and reflects the objectives and outlook of my business and many other ‘21^st century’ conveyancing operations, but unless there is a major sea change in the way in which the majority of other conveyancing business are run, the revolution it is promising is unlikely to materialise.   The reality is that Veyo and other innovative conveyancing portals are currently ahead of their time.

Morgan Jones and Pett 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

Clients Guide on what to check with their conveyancer when purchasing a leasehold property

You instruct a conveyancer to act and look after your interests when purchasing a leasehold property.   You go to that conveyancer to ensure he exercises the skill and care required to ensure that the property you are purchasing can become a home free of legal issues.  

As part of that due diligence process your conveyancer will send to you information about the lease as well as a copy of the lease for you to read through.   He will if he does his job correctly identify what might be wrong with the lease and what he suggests should be done to sort any problems.

This may all be very daunting and in effort to help you understand what to look for and what to query if your conveyancer fails to cover an aspect I have set out below some ( and it’s not intended to be an exhaustive and comprehensive list )  common points to keep in mind:

Have you been provided with a completed copy of the lease?

Has your copy been signed?

How many years does the Lease have to run?  If the remaining term is under 80 years you should seriously consider pulling out unless the seller is prepared to arrange for the lease to be extended before you purchase.

Does the property description in the lease mirror the property you are looking to purchase.  Check the lease plan against the floor layout shown in the sale particulars.  Take the plan and carry out a physical inspection of the property to check for discrepancies.

If you are told there is a garden and or car parking space then make sure this is included as part of the description of the property you are purchasing.

What parts of the property and the amenities are you required to share with other tenants?

Is there a right to pass to and from the property from the closest public highway? If not you may find that someone else could legally prevent you from accessing the property.

How much is the annual ground rent and service charge – can you afford these remembering they can increase depending on the clauses in the lease and the expenditure incurred by the landlord in the upkeep of the building and communal areas.

Check the rent review clause - the ground rent might only be £250 per annum at the time of purchase but this could by the end of the term be as much as a million pounds per annum!

Is there a management company and if so is it properly run and has accounts to show that it takes its responsibilities seriously.

Is the property adequately insured? 

What are the restrictions on use of the property?  Can you sub-let for instance and if so what conditions have to be met?

Even though the landlord is responsible for the upkeep of the property you should always get a survey undertaken since if there is major work required you and the other tenants will be required to contribute to that cost however much the expenditure might be.

Finally do consider carefully whether a leasehold property is for you  - many conveyancers including myself advise clients not to purchase this type of property unless there are very compelling reasons so to do. 

Morgan Jones and Pett 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

What is the Lender Exchange and how does to provide benefit to conveyancing clients?

The Lender Exchange is a service designed by Decision First to aid communication between solicitors and lenders. It is intended, writes Katie Easter, Trainee Solicitor with MJP Conveyancing, to reduce the risk of fraud by providing a secure portal for exchanging information. 

The lenders currently working with lender Exchange are Lloyds Banking Group, Royal Bank of Scotland Group, Santander and HSBC Bank.

What are the benefits for clients?

The benefits of Lender Exchange include reduced administration which is designed to prevent delays for clients. The system enables lenders to send mortgage offers to solicitors electronically which is much quicker than more traditional post or Document Exchange. At MJP Conveyancing we are well equipped for receiving documents electronically which means that we can deal with documents received through Lender Exchange efficiently.

Mortgage offers are usually accompanied by forms such as Mortgage Deeds which we provide to our clients for their signature. Prior to Lender Exchange it was not uncommon for offers to be sent without these documents which led to delays for clients when solicitors had to request the forms separately. A function of Lender Exchange is to make standard documents such as Mortgage Deeds and Consent to Mortgage forms always available to be downloaded. By downloading forms manually, solicitors can help to prevent delays.

Although clients may be unaware of Lender Exchange, they are benefitting from the system. Waiting for lenders to produce mortgage documents can cause unnecessary stress and delays for clients. Lender Exchange represents a new means of communication which is likely to prevent these delays.  

                

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

What to look for when purchasing a property sold through a power of attorney?

Buying a property from a person acting under a Power of Attorney should, according to Michael Riches, Trainee with MJP Conveyancing, pose no issue if all the relevant checks are made by your conveyancer. 

Some people may be concerned that the attorney does not have the right to sell the property; however, an explanation of what an attorney is and what powers they have should calm those concerns.

What is a Power of Attorney

A Power of Attorney is a legal document which allows someone (the Donor) to appoint someone to act on their behalf (the Attorney or Donee) and make decisions for them. These decisions can be in relation to Property and Financial matters or Health and Welfare matters.

There are two types of powers, a General Power of Attorney and a Lasting Power of Attorney (previously known as an Enduring Power of Attorney).

A General Power only lasts while the Donor has mental capacity and may cease to have effect after a set period and will cease to have effect if the Donor loses mental capacity. In a property transaction any person can appoint an attorney under this general power to act on their behalf and sign all necessary documents.

A Lasting Power is only effective when registered at the Office of the Public Guardian. These are effective even when the Donor loses mental capacity, indeed these are often entered into in anticipation of the Donor becoming ill and losing capacity. The key to this Power though is that the Power must be granted and entered into when the Donor still has capacity and is fully aware of the arrangement and implications of the document.

As a Buyer you should be aware of who you are purchasing from and in what capacity they are acting. If you are aware you are Purchasing from someone acting under a Power of Attorney and the Power is still valid then your right to a good title is protected. However, if it is proved that you knew the Power was invalid or had expired or had previous knowledge about the circumstances in which the attorney’s power would be terminated then this right is not protected and you will not be able to register the property in your name.

When instructing your conveyancer you should make them aware at the outset, if you yourself are aware, that the property is being sold by someone acting under a Power of Attorney.  If this is not immediately apparent then it will be revealed within the contract documentation sent by the Seller’s conveyancer. The checks your conveyance should make, and you should ensure are made, are: 

Has a fully certified copy of the Power been supplied?

Is the Donor still alive – if the Donor is deceased then the Power automatically ceases to have effect and the attorney cannot act in that capacity

What type of Power is it – in a conveyancing transaction the Power must allow for the attorney to act in property and financial matters.

How many Donees are acting – this is important as both attorneys must agree to the sale and sign the documentation.

If all of the above is provided and correct then your right as a Buyer to a good title is protected.

Further guidance can be found on the www.gov.uk website. This provides a lot of information on the Power of Attorney. Furthermore, if you would like to sell a property under a Power of Attorney it details the process to appoint an Attorney.

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