Sunday 25 January 2015

Norwich - A fine City to buy a property in

The news of Radio One choosing  Norwich as its venue for its Big Weekend in May will undoubtedly help to remind people of the popularity of Norwich as a place to live. 

Based in East Anglia and situated about 20 miles away from some of the very best coastlines in the UK, Norwich continues to grow not only as a top tourist destination but also as an ideal location to establish a home.

So what does Norwich offer?

There is much more to Norwich than Delia Smith and Stephen Fry and a former Premiership football team.  

Norwich bustles with good and varied shops, restaurants and pubs and offers a unique quality of life. 

There is an excellent theatre hosting some of the top shows in the country.

Norwich is also the gateway to the Norfolk Broads. There are  Nature Reserves  and it is also situated close to a number of the top Natural Trust Land/Properties 

Though there is a large selection of restaurants and public houses it would be remiss not to make specific reference to the Last Wine Bar  and The Georgian Town House  There are lively eateries and ones which offer good quality food. 

Norwich Property Market

Finding a property in Norwich may however prove difficult. 

The opening of the Eleveden by pass has increased the drive time to and from London and with a good train service running from Nowich to London with Trains every hour transport routes into the capital are better than have ever been.  This has led to an increase in demand and prices in Norfolk have been rising and will continue to rise this year. 

There is a distinct shortage of stock in Norwich at all price points which is a situation that has been in play since 2009 and it just keeps getting worse.

According to Rightmove the majority of sales in Norfolk during the last year were detached properties, selling for an average price of £259,940. Terraced properties sold for an average of £157,736, with semi-detached properties fetching £172,339.


If you are looking for help to find a property give Pymm and Co and Abbotfox agents which have a good reputation in the area.    Try also the local property newspaper edited by Caroline Culot

As for conveyancing solicitors beware if you are directed to a specific firm by an estate agent as commission fees are rife in the City and add to the cost of buying a home. 



At MJP we have no ties with any agent and offer competitive fees.  You can obtain a  quotation here 

For more information on Norwich Tourist Information Board 

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

Thursday 22 January 2015

Will the arrival of the 'Facebook Conveyancer' mark the end of the traditionalist approach?

I understand the  ideals behind a traditional conveyancer and the need for all conveyancers to act at all times in a professional manner. However  I must  question whether the demand for a traditional conveyancing service is still as great as it was at one time and indeed sufficient secure longevity in an ever changing and highly competitive market. 

A typical traditional conveyancer is someone who would not touch a conveyance unless a fee in excess of £1000 is charged, who operates with a secretary and per perhaps also an assistant, who takes long lunch breaks and who  loves to engage in long meetings and telephone calls with clients.  

He or she will also subscribe to the pigeon post mode of communication.  Receiving a letter placing it in a lovely wooden in tray and then after lunch getting out the dictaphone and dictating a very and long and flowery letter in reply.  The dictation would then sit on the tape until a couple of further long letters joined it when a few days later it would find its way to the secretary for transcribing. Once typed the letter would then be left for the conveyancer to check and sign, probably after  the completion of an afternoon on the golf course.  Three or four days later following the arrival of the letter into the office it would find itself on the post room awaiting despatch.  

As for technology, there would be a PC standing on the desk and one which  would probably be turned on but rarely used.  Perhaps the occasional surfing of the net would take place from time to time mainly though to check the latest cricket score. 

This description may be extreme and only representative of  a few but I am sure we have all come across a conveyancer who could be connected to some or all of these features.  I acknowledge there will always be a place for the traditionalist because there are some clients who are prepared to pay for this type of service and who have the money to meet the cost.   The question of whether this demand will last forever given the arrival of a generation who have grown up with technology and social media remains to be seen. 

The growth in Instant Messaging, Facebook, SnapChat and Twitter should be sending out alarm bells to these traditionalists, particularly the small traditional high street firms.   It may still be possible to demand high fees and to continue with traditional work practices but unless  change is on the agenda the prospect of longevity in a fast changing and competitive market is low. 

There is a high demand amongst a large group of the population for instant communication and greater transparency.  The time for a smoke and mirrors approach to conveyancing is at an end, the educated client does not need to be kept in the dark about what goes on behind the scenes, they want and indeed demand 24/7 access to all parts of the conveyancing process.  

The modern thinking client wishes to be notified on their smartphone when a development in the transition arises and also welcomes the ability to see post and other communication as and when it arrives.  This type of client also wishes to be able to communicate with his conveyancer electronically in ways which are already familiar such as Instant Messaging and Facebook. 

Snobbery is such that the traditional lawyer will look down and frown on the practices of a modern day conveyancer arguing that such service is vulgar and unprofessional.   Receiving an email or perhaps a message through an electronic case management system rather than a traditional letter in the post is often viewed as outrageous.  Add to this the practice of acting for a client outside one  mile radius of one’s office the Facebook conveyancer is often looked upon as a disgrace to his or her profession. 

Then there is the ongoing snipes as those conveyancers who charge low fees.   There seems to be a growing misconception around these firms.   Low fees do not always equate to an inferior service and those who sneer at 'bucket shop' conveyancers often fail to look through the anger and analyse why it is possible to run a successful business with such a low fee base.  There are many conveyancers out there who regard themselves as traditionalists, who charge high fees but who deliver a mediocre service.  On top of this many of these firms are operating under the misapprehension that they are making a profit out of the work.  The truth is that even though the Facebook conveyancer may be charging a low fee, the combination of good and efficient use if technology  and a low overhead base, often means that the business is well run. offers good client service and more to the point makes a profit.  

Rather than ranting and raving about these firms with a modern and forward approach to conveyancing, the energy of these doubters may be far better spent in carrying out a self appraisal and looking to challenge the traditional approach to conveyancing.  Is the technology you are using sufficient and advanced enough, do you really need all of those assistants and secretaries and has the time come to drop the old fashioned and generally unwanted modes of client communication. 

Who I ask though will have the last laugh.  The reality is that the Facebook Conveyancer has already arrived and guess what is making good money and building successful practices.  The time frame to get on board and to  begin competing with the likes of this new breed of lawyer is running short.  Right or wrong the life span of the traditional lawyer is limited and with the advent of ABS and the increased competition that time for charging large fees and dining out with clients is nearly at an end.  Only those with good technology and well oiled processes will be able to afford to stay in the market and survive.  

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

Tuesday 20 January 2015

How many conveyancers give the correct advice on building insurance ?

Do you advise your client on insurance or do you make it clear that you are not an expert on insurance matters and that the client is better talking to an insurance expert?  If you do advise I suspect  you make think differently when  you read through what follows.

In line with current conveyancing practice if you are instructed by the client to check an insurance policy and you agree to do so there is an obligation on you to check the following issues:

  1. Is the amount of cover adequate?
  2. Is the sum index linked?
  3. Are the risks insured adequate?  Cross referencing perhaps to the result of your environmental search result. 
  4. Have all particular features  of the property such as a thatched roof been disclosed and are they adequately insured?
  5. Is the property attached to an adjoining property, if so does the insurance extend to damage to a neighbouring property where practicable? 
  6. Does the policy comply with the buyers lender requirements?


Most leasehold properties are cowered by insurance put into effect by the Freehold owner.  The policy still  needs however to be checked in the same way.  Additionally there may need to be extra cover put into effect to cover damage caused by an uninsured risk.  The client may remain liable under the lease including the covenants to repair and pay rent.  Some policies do not extend to flats where a resident is claiming social security benefits. 

Though the need to check where a lender is not involved is something which I would not offer to do ( I am not an expert in this field ) I would always make sure that where the client is borrowing  the client is made aware of the lender requirements for insurance.  It would be negligent not to do so. 

A lender’s particular requirements, set out in part 2 of the CML handbook, will stipulate:

-whether the buildings insurance policy must be in the joint names of the lender and the owners of the property, or whether it is sufficient for the lender’s interest to just be noted on the policy the maximum excess which is acceptable to the lender

-whether the lender requires written confirmation from the insurance company that they will notify the lender if the policy is not renewed, or is cancelled; and

-whether the lender requires a copy of the buildings insurance policy, and the last premium receipt, to be sent to them

It is also necessary to make the client aware of the need to take care and not to make a misrepresentation to the insurer. 

So next time you come to consider insurance as part of the exchange process do keep in mind the above and make a clear decision on whether to take on responsibility for advising or whether to make it clear to the client that the time has come for the client to take advice from an insurance specialist.   This is something which you may wish to address and make clear in the terms of your retainer. 

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

Thursday 15 January 2015

Veyo - A Change in Strategy

It seems the guys at Veyo are now listening to feedback and taking what appears to be a different course with product development.  The news comes following a recent presentation made by Veyo.

The presentation was given by Paul Humphreys Veyo’s Programme Director. Some new and interesting information came to light during the session.  

It was already known that Veyo has a budget of around 10 million pounds but what was not clear was how much of the fund had been expended so far.  Though no figure was disclosed it was revealed that it is estimated the funding will only last until 2017 at which point Veyo will need to be self funding.  It seems they employ 95 people with 25 based in the UK.  There are a staggering 45 developers employed on the project. 

The aim is still to launch in Spring 2015 but there will no integration with CMS until 2016.  Until then the method of data entry will be  manual. 

Despite the indication given before Christmas, Veyo claims it will not compete with other CMS suppliers. 

Mr Humphreys explains that they no have a modern approach to sharing data which is necessary for CMS and other suppliers to integrate with Veyo, although the the data exchange system has yet to be designed.  Veyo would like to see the spec for this to be agreed between the LSSA (or individual suppliers if necessary) over the next 3 or 4 months. 

Following this there will be a development period and then a testing period after which suppliers could write their own integrations into the Veyo platform. Realistically, Veyo accepted that they would not expect any CMS suppliers to be ready to deliver an integrated product for a least 9 months from today. Veyo claim that whilst its system will work without CMS integration it will work better with it.

Again, despite the massive investment, and 45 developers, there was still no demonstration of the system (although they are apparently in a test phase now).  


An outline of  headline features was however given . Perhaps the two key features were that Veyo would store the data for both sides of a transaction (with appropriate security) and they also wanted to display the “chain view” so a client can see all of the transactions in the chain. Uncanny that this is what I was suggesting should happen when Veyo first announced its arrival.  There was a clear need for a unique identity and it seems that this may now be what is happening with this change in course.  


Interestingly however, Mr Humphrys was not suggesting that lawyers should use their system where they have a solution from another suppliers. He said they may wish to use it where existing suppliers don't have the ability to do it. It is unclear what he meant by this as if it offers a unique chain data view then why would lawyers not wish to use it along side their existing CMS?


Still no news however on pricing! 


Veyo said it is proposing a flexible pricing structure which will consist of a licence fee and a transaction fee but the details of this have not been announced yet. Nor have they formed an opinion on how CMS suppliers and others should integrate with Veyo commercially. 

They are talking to lenders about Veyo but there is no suggestion that lenders would mandate the use of this over any other portal at this point.  Still no views on where the lender aspect to Veyo will fit in given the stronghold Lender Exchange has in this area. 


Veyo was asked about the number of users they anticipate will sign up  and in response all they could say is that they were pleased with the large number of pre-registrations on their websites.   No contract signing will take place until March. I suspect the number of registered lawyers will when fall far short of actual  users with much depending on the eagerly waited announcement on price. 


This sudden though not unexpected change of direction will be welcomed.  The arrogance or self denial which prevailed seems to have left and it is encouraging that Veyo despite claiming they had consulted with the legal technology industry has now made a commitment to do this.  There is no doubt lawyers and those like myself who have an interest in the project have helped to  guide Veyo onto a less rocky road. 

The empathise has moved away from the case management aspects of their system though this may turn out to be a cynical move to get other CMS suppliers on board.  It must be kept in mind that until integration with CMS can commence users of Veyo would need to fall back in the CMS within Veyo. This may lead to some users sticking with Veyo. 

The lack of a clear message on how users might wish to use the system when they already have invested in a CMS still seems lacking. Veyo appear to be saying that some users may wish to use aspects of Veyo that their current CMS do not provide.   Interestingly they are not proposing to charge a lower fee for this reduced usage. 

I suspect they are thinking here of the ‘Chain View’ which is now the USP of the system.  A good idea.  There still however remains an issue as we all know a chain is as strong as its weakest link. If it is not mandatory for all lawyers to be part of Veyo the chain will simply breakdown and become worthless.  Also what is there to prevent other CMS suppliers not building a chain view component of their own.  This would be at no additional cost to the user and would then render Veyo redundant to their existing users.  

The jury is still out I am afraid.  If I was a shareholder in Mastek however, I would still despite this change in approach be asking some probing questions about the level of investment and future expenditure in a product which stills seems to struggling to find a commercially viable identity different to that of existing and well established CMS suppliers.  

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

Wednesday 14 January 2015

Referral Fees - Good or Bad?


There is nothing more entertaining than watching two conveyancing lawyers engaged in an argument over the use of referral fees within the property market.   There are always plenty of sparks and it is clear that feelings around this subject run high.  

So what are referral fees?

They take several different forms.  The most common is the introduction fee.  This involves  for example a solicitor paying an estate  agent for referring a client looking for conveyancing services to that solicitor.  The fee can be anything up to £300.  Another common one is the  marketing fee.  This where a  a solicitor pays an intermediary for a ‘lead’, that is a name and contact number, to enable that solicitor to contact the potential client direct.  Its not just estate agents who refer work on for payment.  Insurance brokers also do it and can receive substantial payments for referring clients to panels of solicitors run by  third parties who also take a payment. 

Referral fees have already been outlawed in the area of litigation but still remain lawful in the property industry. 

So what are the perceived  benefits?

To begin with those referring will argue that by having control over the choice of solicitor albeit for payment, the referrer can keep control of quality and ensure the client receives the best service.  There is some credibility to this argument as agents and brokers are in making the referral putting their reputation at risk if the conveyancer fails to deliver.   The problem arises however when you bring conflict into the equation and question the motive behind the referral.  Is it as it should be to ensure the best possible outcome for the client or is it more sinister than that?  Is it because the introducer is out to maximize his return on acquiring that client?  In other words the introducer may be focused solely on the money.  In this case there is a real danger the client will be directed in the direction of the highest bidder. 

The other fundamental flaw in all of these arrangements is that the client if left to pay for the referral.  The client may not be aware of this even though there is a professional duty on the part of the lawyer to disclose the existence of the referral fee.  So this is how it flows.  The agent for example may direct a client to a conveyancer and tell the client the conveyancer is good and will only charge say £450.   The agent is more likely than not to keep from the client that out of that £450 the agent will receive a ‘kick back’ of say £150.  So in the end the client is paying £150 more than if she or he had gone the the conveyancer direct.   

The conveyancer may argue that if the client had come direct the fee would have still been  £450 because without the arrangement the conveyancer would have to spend more on advertising to generate new work.   It is unlikely therefore that profitability of a forward thinking conveyancing business would improve if referral fees were banned.  Instead these businesses would have to pay a high price for more general marketing initiatives. The only difference and one that means a lot to many practitioners is the latter situation would leave the lawyer to practice without ties and with integrity and professional independence fully intact. 

The difficulty many practitioners encounter is the inability to compete for clients on a level playing field.  Brokers and agents have access to the client at the very outset of a client’s desire to sell and or buy.   The conveyancer does not get a look in!    The opportunity presented by conveyancers to offer to the public direct Home Information Packs when they were obligatory, helped but as we know the present government in its wisdom did way with these.  It is clear that if lawyers could get to the potential client first the client would have a far greater opportunity to avoid pressure from agents and brokers alike and perhaps be left to make a more informed choice.  

Sadly I can not see any future government having the courage to bring in reform would provide this opportunity and for this reason right or wrong referral fees are likely to be here  for many years to come. 

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

Saturday 10 January 2015

A call for more transparency over mortgage fees

A campaign designed to put pressure on lenders to provide greater transparency when quoting financial fees and charges has had a degree of success with the Chancellor George Osborne announcing in the delivery of his Autumn Statement plans to make mortgage fees clear. 

Spearheaded by the consumer champion Which the move by the Chancellor came after 45,000 people supported the campaign and a further 3,000 contacting their local MP. 

The Council of Mortgage Lenders has been asked by the Government to investigate and come up with some practical solutions  as well as guidelines to make it easier to compare mortgage fees and the cost of mortgages generally. 

Selecting a mortgage can be quite costly and Which report that a couple with a new £100,000 mortgage could find themselves paying £1503 more over two years because of mortgage fees. 

Which also found that only 3 % of consumers could correctly compare five mortgage deals from cheapest to the most expensive from information currently presented by the lenders. 

For more details of the campaign and to provide support visit :http://www.which.co.uk/campaigns/insurance-bank-card-fees/ 

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

Wednesday 7 January 2015

Fixed rate mortgage compared with Tracker/Variable rate mortgages


The choice between a fixed rate and tracker mortgage is often a difficult one which is made more problematic by the number of different products currently on offer.

According to Which Compare service fixed rate mortgage deals are proving most popular.  In an article published at the end of 2014 Which reported:

‘A huge 76% of people who filtered mortgage results on the website from the start of September 2014 to the end of November 2014 asked to see fixed rate mortgage deals. This compared to 11% for tracker mortgages and just 2% for discount variable rate mortgage deals’.

So what are these options?

Fixed rate mortgages options

As the name suggests, a fixed rate mortgage has an interest rate that is fixed for an initial term - say 2, 5 or even 10 years. This means your monthly mortgage payment will remain the same over the period, giving you certainty and allowing you to budget for a major item of expenditure. At the end of the fixed rate period, the mortgage usually transfers to the lender's variable rate.

Although many economists are not expecting a Bank of England base rate increase until at least late this year, this particular option clearly has some appeal.

According to Which:

‘There were 976 five-year fixed rate mortgage deals on the market in mid-December and 1,505 two year deals. The lowest rate on the market was a two-year fixed rate deal on offer from The Post Office at 1.37% on a 60% loan-to-value (LTV) mortgage. A five-year fixed rate deal is available from HSBC at 2.48%. Over the past three months a number of mortgage lenders have also launched competitively priced 10-year fixed rate deals. For those with a 40% deposit Santander has a 10-year fixed rate deal of 3.44% and Woolwich has a 3.45% offer. People with a 30% deposit would be able to apply for a 10-year fix from Nationwide at a rate of 3.49%’

Tracker/Variable mortgages

Tracker mortgages usually track the Bank of England base rate, and, as a result, your mortgage repayments will change when the base rate moves up or down. Before applying for a tracker mortgage, you should therefore assess whether you would be able to afford for your repayments to increase – if you wouldn't be able to, a tracker mortgage is not the best option for you

According to Which tracker mortgages are on the decline:

‘Over the past nine months the number of tracker mortgages on the market has been steadily falling. There were a total of 482 on the market in April 2014, this had dropped to 330 by August.

In mid-December the figure stood at just 299, with 210 two-year tracker mortgages on offer and no five-year deals. The best rate on offer comes from TSB with a two-year tracker mortgage at 1.09%, tracking 0.59% above base rate’.

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 01603877067 or via email at davidpett@mjpconveyancing.com

Thursday 18 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 order.  That is to say, the seller’s solicitors would be required to pay the deposit to us if and when requested.  They would not be able to refuse or release the deposit to the seller.

We are under a duty to bring this to your attention and to seek your written instructions on the request before proceeding.

The main reason why a deposit is paid is because, if your buyer fails to complete the transaction  ( which is rare but not unknown) , you can forfeit the deposit ( that is keep it) which can then be used to cover your abortive sale costs, the cost of re-sale, and also if necessary the cost of  interest on a bridging loan if you have a related purchase and wish to continue with that transaction. 

For this reason we always advise that the full 10% deposit should be paid so as to ensure that if the transaction does not complete you will not be out of pocket. 

If you were to accept a 5% deposit for example, then if the transaction did not proceed to a completion you would still be able to claim the other 5%,  but as this is not held by us or by the buyers solicitors to our order, you would have the inconvenience and cost of having to take the buyer to court to collect the unpaid part of the deposit.  You may also find that the sum which you do have access too is wholly inadequate to compensate you for your loss.

The purpose of this note is to explain the consequences of accepting a reduced deposit so that you can make an informed decision on the request before providing us with your written instructions.  For this reason if you would like us to explain the above in any further detail please feel free to contact us.

We now await your written instruction’.


David Pett – Director and Solicitor with MJP  Conveyancing 

You must not rely on the information on this website as an alternative to legal advice from your solicitor or other professional legal services provider.   If you have any specific questions about any legal matter you should consult your solicitor or other professional legal services provider. You should never delay seeking legal advice, disregard legal advice, or commence or discontinue any legal action because of information on this website.

Friday 12 December 2014

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 operates a sophisticated case management system which not only provides clients with 24/7 access to progress, but also, on sale transactions, the sale agent.  I say sophisticated because the agent does not need to sign in on each individual transaction, but has one log in which lists all transactions to which the agent is tagged.  Moreover, the access provides the agent with a full picture of all activity on the file, file notes, correspondence etc.  Despite having desktop access to progress, guess what, yes we still receive daily telephone calls from agents.

The reason for this is that most agents have a deep rooted obsession with using the telephone to seek updates and are not remotely interested in taking a few seconds to log in to find out what is happening.  Why is this?  My theory is that it has a connection with the constant pressure some agents are under to hit targets, and it seems to me that the use of the telephone in the office is how certain agents demonstrate to their superiors that they are working hard to ensure those targets are attained.   

This is also highlights a failing with some agents, that is the apparent reluctance to do anything to seek a better understanding of the conveyancing process. It’s all well and good setting time aside each week to talk and update, but if the agent in question, who can often be quite young and inexperienced, has no idea what you are talking about or the pressures you are under, it’s a complete waste of time and effort.   It’s clear that there can only be effective communication if there is a complete understanding of the process on both sides.

The concerning aspect is that there does not seem to be an appetite to learn and to obtain a better understanding.  It was not too long ago that we sent a circular out to local agents inviting them along to a free seminar designed to provide an overview of the conveyancing process and of the main reasons for delay.  It may not come as a surprise to learn that not one agent had the courtesy of replying let alone attending.

The difference in agendas between an agent and a conveyancer also present a hurdle for better communication.    The agent’s first objective is to find a buyer and once found to make sure the transaction proceeds quickly so there is no delay in collecting the agent’s large and not insignificant fee.  Some agents are more active than others and do assist in helping to obtain documents and to help with the fixing of completion dates.  The agenda even with the help some provide,  still remains the same, the transaction must complete as early as possible so that payment can be collected to enable a target to be reached.   I accept the bi-product of this is that the agent’s input helps the client to ensure the transaction is progressed quickly.  The sceptic I am suspects however this is a secondary rather than primary motive.

Compare this agenda with that of the conveyancer.  The conveyancer’s duty to the client on the sale is to make sure the contract is issued quickly and there is a prompt response to inquiries.  If there is a purchase the conveyancer is under a duty to the client and if there is a mortgage to the lender to ensure the title to the property is good and marketable.  Yes, it is also helpful to be paid for the service supplied, but unlike the agent this is a secondary and not primary objective and one that cannot always be achieved as quickly as some agents demand. 

I also believe there is some resentfulness between a conveyancer and agent due to the massive gulf between the fees each can charge.   If this gap could be bridged then this I am sure communication and cooperation would improve instantly. Most agents’ fees run into thousands whereas the average fee for a conveyancer could be around £500.  I wonder how many agents would refrain from chasing a conveyancer if their budget for the transaction was £500 and not £5000.  I also wonder how many agents actually realise and appreciate how much a call a day can eat into the profit margin of the conveyancer.    

So in conclusion I do support the idea of looking at measures for improving communication, but I do challenge the belief that this can be achieved without first bringing about a major shift of understanding on the part of the agent.    The agent needs to understand and acknowledge that agendas are different and that the time the agent expects the conveyancer to devote to the agent for updates is often difficult to justify in relation to the fee the conveyancer is able to charge.  Dare I suggest that if the agent was prepared to pay the conveyancer an extra fee for the updates and for collecting the agent’s fee whether this would be a step in the right direction?


David Pett  - Solicitor and Director with MJPConveyancing 

Tuesday 2 December 2014

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 minimum term of years requirements. If the term of years remaining is predicted by the valuer incorrectly, it is important for solicitors to notify their mortgage provider clients accordingly. This is one of the reasons that we must have sight of the Mortgage Valuation Report prior to exchange.

There are also requirements for particular terms to be included in leases. These include the need for other leasehold properties in the block to provide support and shelter to the flats around them. When we review leases we are ensuring that they contain rights to support and shelter from the neighbouring properties. Without these rights, purchasers of leasehold property could face expensive repairs should neighbouring properties fail to support and shelter their own. This could affect a borrower’s ability to pay their mortgage and is therefore a concern of mortgage providers.

Ground rent should also be checked to ensure that there will not be any sharp increases which could affect a borrower financially. We will check the lease and may raise further enquiries with the Vendor’s solicitors regarding this point.

It is also important to gather information about any management companies. The following items must be obtained and checked by solicitors:

1.       The lease or another agreement with the management company must give the company a right to enter the property to carry out repairs or other works.

2.       The last three years accounts of the management company should be obtained.

3.       Any details of major works that will be paid for with service charge should be obtained. It will be necessary to notify a mortgage provider if these cannot be satisfactorily obtained.


The obligations that MJP Conveyancing owe to their clients’ mortgage providers therefore govern some of the leasehold enquiries that we raise with Vendor’s solicitors. Regrettably, this can lead to some delays when purchasing leasehold property but it is important to retrieve these answers for both our clients and their mortgage providers. 

This is also why we always ensure that leasehold packs are ordered from management companies as early as possible when we are acting for clients that are selling their leasehold properties. 

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 reclaim possession of the property from the third party for default in payment.

(2) Furthermore, a “client conflict” may arise if a solicitor opts to act for the third part, borrower and the lender.  Chapter 3 of the SRA handbook describes client conflict as: “any situation where you owe separate duties to act in the best interests of two or more clients in relation to the same or related matters, and those duties conflict, or there is a significant risk that those duties may conflict”.


Case Law

The topic of third party security cannot be discussed further without reference to the leading judgment of Royal Bank of Scotland plc v Etridge (No.2). The House of Lords declared how lenders are to operate under these circumstances as well as steps to be satisfied by the acting legal representative.

The case involved a wife acting as the third party, who sought her property for security to account for her husband’s debts. The loan was not repaid to the lender and repossession was claimed on the property. The wife attempted to sue the solicitors for professional negligence on the grounds that they had not acted within their duty to advise accordingly. The question considered by the Court of Appeal was: Had the wife been properly advised, would she have signed the necessary documents to enter into such a transaction? The Court of Appeal held that the solicitors firm were in breach of their duty as they has failed to evaluate and advise the wife of the risks.


Judgment requirements

Lender responsibility
Solicitor responsibility
Write to the third party informing that for their own protection, the lender will require written confirmation from the solicitors that the nature of the charge will be explained.
Explain to the client that the lender may rely on the written confirmation from them that the nature of the transaction and charge has been sufficiently explained.
Ask that the third party instruct a solicitor. It is for the solicitor to decide whether there is a potential conflict of interest in taking on the instruction for the third party, borrower and lender and whether this is in the best interests of the client.
Seek confirmation that the third party is happy for legal representation under the circumstances and advise accordingly thereafter of the legal and practical implications.
Provide the third party with the financial information necessary for advice to be provided accordingly.
Check that no earlier lending is secured under the third party’s guarantee.
Provide the solicitors with any information that is reasonably considered may evidence the fact that the third party has been mislead in coming to such a decision.
Explain the nature of the documents to be executed by the client and the consequences of entering into the transaction. The solicitor must obtain consent from the client to write to the lender confirming this has been explained to the client.
Do not proceed on the transaction without written confirmation from the solicitor.
Discuss the client’s financial means and whether any other assets may be the subject of repayment in place of third party security. The solicitor can at this point offer to negotiate the terms of the transaction with the lender under instruction of the client.

Meet with the client face to face without the borrower present. An attendance note of the meeting is necessary.


Decision in Etridge

The consideration of Lord Neuberger M.R. was that the length of the client meeting in relation to third party security did not necessary satisfy the duty the solicitor has in advising the client. Mere advice to proceed was simply not sufficient: “…she should have been told in clear terms that a hurried short meeting was simply inappropriate, bearing in mind the importance, riskiness and probable pointlessness of the transaction she was about to enter into…”. The solicitor acting on behalf of the wife did not recall the meeting with her and therefore was not able to give any real evidence that the advice provided was satisfactory for the purposes of his duty to the client. All the solicitor was able to offer was that of what his usual practice with clients would be. The court founds that, had the wife been properly advised, the wife would not have signed the documents to the transaction.

Conclusion

The requirements listed within the table above were considered to bet he core minimum to be obliged by the lender and solicitor in their relationship and capacity to the third party, to ensure they enter into the transaction with realistic understanding of the implications and risks involved. Equally allowing the lender the comfort to make the necessary loan without fear that the transaction will be set-aside in the future. The solicitor must exercise their due skill and judgment in every individual case of such a nature and whether to act on the matter. It is a modern day requirement of a solicitors firm, acting in this capacity, to check their insurer’s conditions that they may even be covered to proceed in doing so.

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