COVID-19 update from MJP Conveyancing

Covid-19 Information

Acting on the latest advice from the government we are now working in a home based environment, we are well equipped to work from home by using our in house built cloud based technology and telephone system.

If you wish to obtain a quote please call 01603 863727.

FOR EXISTING CLIENTS

Apart from suspending all incoming calls pending our return, all post, emails and other work on your transaction will continue as normal. If you need to speak with us urgently on the phone please message us through your online portal and somebody will look to return your call within two working days if not earlier.

In addition to this we operate a "cloud" based telephone system, this allows each of our case handlers to access and make use of the system via an application on their mobile phones at home.

Please note that all client messages will be processed as usual, we wish to assure you that there will not be any break in the continuity of our service.

We will update you when we return to office based working.

Thank you for your understanding in these difficult circumstances.

COVID-19 FAQ's

Buying and selling a property can be stressful enough without the added worry of a pandemic, but what does this mean for the property industry?. The truth is that policy and guidelines are changing daily and we have measures in place to protect our client's interests the best that we can. Some of the most common questions that we get asked are; Will I be charged any fees if the buyer or seller pulls out? If the "other side" pulls out of the transaction then in this instance we will not charge you an abortive fee, if however you decide to disinstruct then we will charge for the work that we have completed to date, which is capped at 50% of the legal fees. Are you still able to order searches? The searches that are required in a standard purchase when obtaining a mortgage are environmental, water & drainage and local authority. Although our search provider will be able to order these there may be a delay in the responses due to the policies of the organisations providing these. We have received the following update from our search provider regarding local authorities. Councils CLOSED until further notice: Bridgend, Corby, Darlington, Dover, Neath Port Talbot, Newcastle Upon Tyne, North East Derbyshire, West Berkshire. *Recently Added* Kingston Upon Thames, Amber Valley, Breckland, Kent Council (Highway Extend requests), East Riding of Yorkshire. The following councils are temporarily closed whilst they assess if they are able to offer their services in an alternative way: Brighton, Caerphilly, Cheshire East, Copeland, Derbyshire Dales, Eden, Elmbridge, Flintshire, Kings Lynn, Monmouth, Newark & Sherwood, North Lincolnshire, North Warwickshire, Slough, South Staffordshire, Test Valley, Torfaen, Tynedale, Vale of Glamorgan, West Lindsey, Cuty of York. *Recently Added* Burnley, West Lancashire, Blackburn with Darwen, Liverpool, Gateshead, Runnymede. Councils that are now back up and running: Blaenau Gwent, Stockton on Tees, Newcastle Under Lyme, Calderdale, Cornwall If my estate agent is still allowing viewings is this advisable?  We would recommend that as an individual you follow the H&S guidelines issued by the government, if you do complete a viewing take the necessary precautions such as wearing a mask and gloves and try not to touch surfaces, also wash your hands before and after the viewing. It is important to remember that information released to the public shows that Covid-19 can live on surfaces up to 9 days so please be careful. How can I verify my ID to proceed with my transaction? As we are completely online based solicitors we don't need to see our clients to complete on any transaction. We have two ways of processing ID, In October 2019 we partnered with a provider that enables us to complete our ID checks using an app meaning that you can complete our checks from the comfort of your own home. The second way is by providing certified ID and uploading it to your file, in the current climate we would always recommend using the app as a first option. What about a survey? Expect some delay in this regard. Surveyors should not be attending habited properties unnecessarily though they will still be able to undertake surveys on empty properties. Once movement restrictions are lifted you can commission a surveyor. If after this you would like to renegotiate the price of the property there will still be time to do so.

Government advice on home moving during COVID-19 OUTBREAK

Can I still buy and sell property? In short, yes. If you have already found a property to purchase you can continue with the conveyancing process. The same applies if you have already found a buyer for your property you can still proceed with the sale. If you have not yet found a property to purchase or if you have not yet secured a buyer now is a good time to prepare for when that time comes by instructed a conveyancer. There are still steps you can take to ensure that as soon as you are ready to proceed you have everything in place to do so. What about my mortgage? Whether or not you experience a delay will depend on where you are in the house buying process. If you have not yet secured a mortgage offer you may have to wait. Many mortgage lenders have put a pause on making offers as they are unable to complete their valuations. You can still use an online mortgage calculator to see how much of a mortgage you can afford. Will exchange and complete be delayed? Conveyancers have been advised to put measures in place so that exchange of contracts can still take place. Clauses can be added so that completion is on notice until the lockdown ends. This means that once the lockdown has ceased notice is served from one conveyancer to the other allowing each party some time to prepare for completion. Some completions can take place as normal, please see the below. Is every house sale effected? Thankfully, no. Right to Buy purchases from the council and tenants purchasing their property from their current landlord can continue as normal, however please be advised that this will be dependent on the councils ability to work remotely. Investment purchases can still go ahead as can vacant properties and newbuilds. It is also possible to complete on your property and not move in until it is safe to do so. When purchasing a newbuild please be advised to keep in regular correspondence with the development office to see how the disruption will affect the timetable for construction. The reality is that it is likely you will experience delays so please do keep your finger on the pulse. Transactions such as Transfers of Equity and Remortgages can also still go ahead. Now might prove to be a good time for you to move all things considering. Many people are now finding themselves with more spare time to enable themselves to pace themselves with moving and unpacking their belongings.

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

How does commercial conveyancing differ from residential conveyancing?

What is conveyancing?


Before establishing the differences in the processes, it is important to consider what conveyancing is; Conveyancing is the legal process of transferring an interest in property or land from one party to another party. The pitfalls and peculiarities much of the associated legislation and practices means that, ordinarily, the parties to the transaction instruct legal professionals to deal with the process.


The conveyancers solicitors' primary role in the process is to review the legal documentation to ensure that the legal obligations of each party is met when going through the transaction. They also review the title documents to the property to ensure the suitability of the property for a buyers' needs.


What are the differences?


Before the differences, it is important to realise that there are far more similarities than differences. At the core of each process, there is;

• Party A wishing to sell an interest in their property
• Party B wishing to purchase that interest in the property on offer
• An agreement on the terms of the transaction and relationship is reached
• The legal formalities are commenced (the conveyancing process)
• The suitability of the property for party B is ascertained
• The interest in the property passes from party A to party B on completion

Commercial conveyancing


While there are a lot of similarities at the heart of each process, there are some key differences too.


Freehold/Leasehold distinction


Whilst there are a vast number of leasehold residential properties in the UK, the vast majority of residential properties are still freehold properties. In commercial conveyancing, the majority of conveyancing transactions involve a business moving into leasehold premises, pursuant to paying a rent to a landlord that owns the freehold of the property.


Extent of rights required


As a result of the above, it is often necessary to consider the rights required of a commercial tenant in more depth than those in a residential transaction; as the majority of rights (save for new build properties) have already been established through transactions of the freehold residential property over time. These can include a number of rights, including but not limited to;

• Rights to use a shared car park
• Rights to use the stairwells and elevators in a shared commercial unit
• Rights to use shared facilities
• Rights to keys/keycodes
• Rights to building's utilities
• Rights to end the lease
• Rights to decorate and install further items
• Rights to advertise

Bargaining power/position of the parties


In residential transactions, generally by the time a file is created here, the terms of the agreement between the parties have established

• The price has been agreed
• The rough timescales have been considered
• Occasionally a bot of negotiation occurs in the form of agreeing price reductions and allowances for some works that become apparent following a survey, but in the main this is then dealt with by the agents

Unlike residential transactions, in commercial conveyancing, the parties on either side far more to negotiating terms; it's generally the nature of commercial businesses to do so.


Use class of the premises


In residential transactions, the position will generally be that the use of the building has long been established to be residential. In commercial premises, it is more common to have to consider whether the existing use class of the property is suitable for an ingoing occupier. The local authority may be required to grant permission for the building to be used for the running of a certain business (ie the premises was previously used as a restaurant, the use of class of the premises may need to be changed if the ingoing occupiers are planning on using the premises as a shop or as a post office)


Clients

The attachment of a commercial client to a transaction is generally financial; that is to say that the primary motivation in completing the transaction is financial.

In residential conveyancing, the process is generally the most important thing going on in each party's lives at that time; therefore, the attachment to the transaction is more personal than financial.

The similarities and differences in each process is vaster and more interesting than can be explained in a short blog entry. However, this gives a short overview of primary considerations in each process.

 Contributed by Thomas Keene Solicitor MJP Conveyancing

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

Estate Agents: Unlawful restriction on freedom of choice of conveyancer

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Times are hard for a number of estate agents, and with a sharp fall in commission, a number of agents are focusing more on increasing their secondary revenue streams, particularly referral fees.

We all know that referral arrangements exist and are, at least for now, a fact of life. The question whether agents and linked conveyances are as open about these arrangements as they should, is less clear.

The pressure on agents to maximise secondary income has led to an increasing number of complaints about the unprofessional and unlawful tactic of ‘bad mouthing’ the vendor’s choice of conveyancer in an effort to ‘sell’ the service of their own pet conveyancer.

We have found ourselves the victim of this practice.   Three local agents have made unjust remarks about our service in an effort to deter prospective clients from engaging us.   We have written to each and have not had the courtesy of a response.

This conduct is abhorrent and is on the rise.   The objective is clear.  The agent is keen not to lose the commission that will be gained if the agent can steer the client to the agent’s pet conveyancer.  No regard is had to the wishes of the client or indeed the client’s rights. 

A truly independent conveyancer will undertake due diligence on the legal title without influence from the agent,  and may, for instance, advise the client not to proceed with the purchase if there is a major issue with the title.   The conveyancer may also assist the client to purchase the property at the current market price and not at the value advised by the agent.   In short the conveyancer will act independently to everyone apart form the client. 

The risk for the client who is pushed in the direction of the preferred conveyancer is that the service provided may be strongly influenced by the value to the conveyancer of the high volume of work it receives from that agent.    There will be pressure on the linked conveyancer not to upset the agent who is feeding it with regular work.   The conveyancer would be less likely to advise on issues that could delay or jeopardise the transaction. 

So what is the narrative these agents use to ensure a prospective client goes with their recommendation?

Firstly, its best to use “our conveyancer is local" - There is no great advantage in a conveyancing solicitor being local because nearly all conveyancing tasks are completed using email and telephone.  Just because the conveyancer is local does not mean the conveyancer is any good!

“We use them all the time" - by the very nature of the arrangement, which will not be disclosed,  this is true. However the agent will have no direct control over the pace of the transaction, nor the actions of the other conveyancers in the chain. 

"Our conveyancer  is quick" -  There is no conveyancer who can guarantee a quick service due to the fact that the transaction will only proceed as fast as the slowest party in the chain.   Conveyancers have little control over the delivery time of searches and mortgage offers, for instance. 

‘If you go with your choice of conveyancer you will have problems’  - if a client hears this he or she should run a mile. Though the agent may profess to know about very conveyancer under the sun, the reality is that the agent will have little genuine information on the conveyancer and will not be basing the opinion on any facts.   The very fact the agent has mentioned this should ring alarm bells straight away.  The best advice is to walk out of the agency and look to find an honest agent, or to go the choice of conveyancer direct who  we are sure will point you in the right direction. 

It is both morally and legally wrong to provide false information in the delivery of a service. 

The National Trading Standards' Estate Agency Team issued guidance on property sales in September 2015 which clearly sets out the duties which estate agents, must provide to consumers, what rights consumers and clients have and what redress they have.

The guidelines are far-reaching and legally enforceable and breaches can be prosecuted in the criminal courts, resulting in possible jail terms and unlimited fines.

In particular, unfairness in practice, as defined in the guidance, is defined as results arising from the following:

• Giving false or misleading information to consumers regardless of how delivered, whether verbally, in writing or via telephone. This would cover providing a client with misleading information about the clients preferred conveyancer.
• Exerting undue pressure on consumers including pressuring a potential buyer to use associated services for example to use a particular firm of conveyancers
• Not acting with the standard of care and skill that is in accordance with honest market practice and in good faith.

Furthermore it  is illegal under the Estate Agents Act 1979 for an Agent to force a client to use the Agent’s preferred conveyancer. 

Blame for this practice does not stop with the agent and a client faced with pressure should also report the Agent’s pet conveyancer. 

Both the Solicitor's Regulation Authority (SRA) and the Council for Licensed Conveyancers (CLC) make it very clear that its members are meant to ensure that their client has chosen them to act without pressure being exerted on them to do so.

If  a client considers  he or she has been caught up in one of these referral arrangements and have been deprived of a free choice of conveyancer our advice is to complain to the Agent and also to the Regulator of the pet conveyancer. 

We will be happy to provide you with advice on you options. 

And finally….  Do keep in mind that it will probably cost the client  more - ( between £100 and £200) by engaging the pet conveyancer because most of these arrangements work on the basis of the referring agent’s referral fee being added to the fee paid for the conveyancing transaction. 

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

Say 'No' to leasehold property

It goes against the grain to advise a client not to proceed with a property transaction, especially when the client has his or her heart set on purchasing the property.  However, as a responsible legal advisor we need to less afraid of saying ‘No’. 

Leasehold property is attracting a lot of negative press of late, and is the focus, as we know, of Government attention .  The temptation is to look at this as yet another ‘scare story, and one which, in time, will blow over. The reality is it is unlikely it will, and if anything, it is likely to get worse before we will see any improvement.  It's therefore dangerous, and potentially negligent, for conveyancers to stick their head in the sand and ignore the many warning signs appearing on a daily basis. 

Doubling rent review clauses and provision for rent increase at regular issues are presenting a major hurdle for those who are looking not only to buy, but also sell, leasehold properties. It was only yesterday that an estate agent called to enquire why we were advising a client to withdraw from a transaction when the agent was aware other properties in the same development had recently sold. 

It is now recognised that it will be more difficult to sell a leasehold property which has a doubling ground-rent charge that rises after 10 years. This doubling of ground rent may have an impact on the marketability and mortgageability of the lease when selling or buying with such a clause. Some lenders may not agree to offer a mortgage on a property with a doubling ground rent. Nationwide has formally started declining mortgage offers which include a doubling ground rent clause.

At present its a lottery as to whether a lender faced with one of these clauses with be prepared to lend. In the light of this, and the ever changing lender landscape, would it be sound advice to allow a client to purchase a property subject to a lease with one of these clauses? I would submit it would not, unless the lease could first be varied to remove the offending clause.  Some conveyancers looking to avoid the delay and cost of seeking a lease variation, advise clients to take out indemnity insurance.  I am not sure I agree with this because insurance only acts as a sticking plaster, and not as a cure. Furthermore, even if the lender is happy to accept insurance there is no guarantee that other lenders will be minded to accept the policy when it comes to sell/remortgage. Moreover, lender policy seems to be changing these days quicker than the wind. 

There is also a danger of some conveyancers becoming too fixated on what the clients lender is saying about the clause and ignoring in the process the best interests of the lay client.  It is unsafe to assume that just because the lender is happy to proceed, that the client will also be content to continue.  The client needs to be made aware of the dangers of purchasing a property with one of these causes in the lease, and in my mind advised not to proceed with the transaction. 

If the client disagrees then a letter setting out your advice should be sent and the client should be asked to confirm instructions in writing notwithstanding the advice. The client should be warned along that this type of rent review clause may:

• be costly to the client as the rent increase (although as it gets more expensive this won't be during the clients life time);

• stop a future buyer from getting a mortgage as mortgage lenders do not like doubling ground rent clauses (it might even prevent the client from re-mortgaging);

• cause an issue on sale as the buyer doesn't want to buy a property with ground rent that doubles; or

• reduce the property's value (the ground rent liability makes the property less valuable).

This represents a serious issue for conveyancers, and until Government makes these clauses illegal, conveyancers should be saying ‘No’ more often than I fear is happening at present.

David Pett - Solicitor  

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

Help To Buy – Two steps forward one step back on the Property Ladder?

The difficulty for First Time Buyers in getting that first step on the property ladder is well documented; the price of homes. The Independent reported in April 2018 that the average house price is now up 8 times on the average earnings. Grim reading for most, and why schemes such as Help to Buy ISA’s, SDLT breaks for First Time Buyers and now Shared Ownership Purchasers are a welcome relief to many looking to purchase their first home. Is the Help to Buy loan really the silver lining in the gloomy cloud of the property market for First Time Buyers? Whilst it offers the additional 5% required to meet that first rung on the ladder is it a false start? 

Home moving company Reallymoving.com have suggested that Help to Buy loans could be as problematic as PPI claims and just as prevalent reporting that 70,000 First Time Buyers could be effected. The market research carried out shows that those using Help to Buy Loans paid on average 8% more for their homes, than those who did not, meaning that the short term gain is actually a loss in the long run. Clearly if there is more debt to pay off then when it comes to selling your property there becomes a real issue in terms of assessing what it is worth. The risk is that your home simply isn’t worth what you have paid for it and therefore you end up having to pay to sell your home.

The scheme works on the basis that you can borrow up to 20% of the property value and you don’t have to pay any of this back for the first 5 years. Subsequently you pay 1.75% for 5 years and thereafter 1% above inflation. Given you can only pay this loan back in either 50% increments, or wholly, and the average Help to Buy loan is  £56,000.00, not many first time buyers are going to have that kind of money. It therefore begs the question; is the Help to Buy loan scheme actually only serving to increase property prices artificially in order that these first time buyers actually have sufficient funds to pay them off!

The Help to Buy loan’s conditions make it very burdensome to pay back, it is not possible to pay in monthly installments, or alongside a mortgage or similar, it must be paid in large lump sums which simply do not suit its target market. The Government and Help to Buy agencies should perhaps realign the Help to Buy Loan with its intended audience to make a more effective and worthwhile product. The success of the Help to Buy loan is that it has helped over 183,000 first time buyers buy their first home, but unfortunately for those in this scheme the worst may indeed be yet to come.

Thomas Barnes  - Trainee Solicitor 

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

Taking the stress out of moving home

Alongside family and a job, a person’s home is one of the most important parts of anyone’s life. It is therefore only natural to find yourself becoming stressed during the conveyancing process. This blog written by Emma Soulby Trainee Solicitor with MJP Conveyancing, looks to give you some practical advice in order to make the process as stress free as possible. 

1. Start early - in most cases the process will take longer than you anticipated. We recommend that you start looking for a solicitor at least three months before you would like to move. We are able to set up a file whilst you find a property to buy or consider offers. Although the conveyancing process takes 6 to 8 weeks on average, the smart move is to certainly give yourself flexibility to accommodate for any hiccups along the road and reduce the stress you are likely to experience. 

2. Get organised - look for key documentation when selling to make the legal process as smooth as possible. This will help to cut down enquiries which form the middle stage of a transaction. When purchasing, get your finances in order so that your solicitor can complete their source of wealth checks in a timely manner and your lender, if applicable, can get their mortgage offer issued. If in doubt about what you need to do, speak with your solicitor to discuss the next steps to see if there is anything you can get on top of. 

3. Don’t make your own pressure - far too often we come across clients who are living in boxes when contracts have only just been drafted! This undoubtedly causes unnecessary stress. To combat this, consider ensuring there will be sufficient time in between exchange and completion, such as 3 to 4 weeks, to allow you time to pack and to book removals. If you would like this, it is best to let all parties know as soon as possible so that the chain takes this into account when planning and discussing completion. In the same vein, we advise clients not to agree a completion date too early in the process. Having a date in mind at the start of the transaction leads to unrealistic expectations and frustration when a transaction may be progressing well but not in line with your target timeframe and dates inevitably have to be pushed back. Giving notice for rental accommodation before exchange of contracts, for example, is one of the worst things a client can do not least because it risks them being made homeless. 

4. Try to keep communications with the other party to a minimum- you have a solicitor, and possibly an estate agent, for a reason: to act on your behalf. Texting the seller, for example, can sometimes cause stress as the individuals may not appreciate the legal complexities which are being dealt with before a completion date can be agreed. Similarly, please remember that you should not contact the other party’s solicitor. This is a conflict of interest and a breach of professional conduct rules. 

5. Empty your plate - as one of the most important aspects of your life, it is astonishing when we sometimes find a client who is getting married or going on holiday at the same time as moving. This increases the pressure you will be feeling regardless of how the conveyancing process is going. Although circumstances cannot always be helped, do try to handle one matter at a time so that you can give it your full attention and experience as little stress as possible. 

Emotions will always be a part of the moving process so these practical tips aim to give you an insight into the common pitfalls we see clients make as solicitors. Going into a transaction organised and with an open mind will make the process as stress free as possible.

Emma Soulby - Trainee Solicitor 

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

Judicial Guidance on challenging the fee of a Party Wall Act Surveyor - Shamim Amir-Sidddique -v- Kowaliw and Gigonkowaliw ( 2018 )

The recent County Court decision in Shamim Amir-Sidddique v Kowaliw and Gigonkowaliw ( 2018 ) has offered some well overdue judicial guidance on the steps to take when appealing the quantum of fees awarded to a party wall surveyor.

Facts 

The facts are pretty straight forward.  

The Building owner decided to convert the loft in her property to provide further habitable space, work which also involved the removal of the chimney breast in the first floor front room.  This was clearly  work  that engaged the Party wall Act, though the building owner was hoping the Adjoining owner would return the courtesy she had previously afforded when similar works were undertaken by the Adjoining Owner without Party Wall engagement.   

This did not happen, and the Building Owner was forced to serve a party wall notice.  There then followed some acrimonious exchanges over the appointment of the Adjoining Owner's surveyor, mainly as a result of the Building Owners wish for the Adjoining Owner’s surveyor to act as a jointly appointed surveyor.  The  Adjoining Owner refused, and the Building Owner was forced to appoint a surveyor of her own.   An award was then issued, and the works were completed.  The award provided for the Building Owner to pay the fees of £1500 and her own surveyors fees of £595 and £180 ( the latter relating to the surveyor she had first appointed). 

Even though having regard to the extent of the work undertaken the fees did not appear on the high side, the Building Owner appealed the fees aspect of the award 

The matter came before HH Judge Bailey, a Judge with a wealth of experience in party wall disputes. He acknowledged that although there were judges like himself who could drawing on experience, express a view on the reasonableness or otherwise of fees, it was necessary for a party who sought to challenge feed, to come to the court armed with expert evidence, and to also, before the hearing, provide the adjoining owners surveyor with the opportunity to be joined as party, and to be heard on the issue.

He explained:

‘Given the sum at stake, and the cost of mounting an evidence-based challenge to the fees the Appellant’s approach is understandable, but it puts the court in an impossible position. The jurisdiction of the court under s 10(17) of the 1996 Act is plainly wide enough to vary that part of an Award which covers the fees of the party wall surveyor. But the court has to act on evidence and give reasons for any decision. There is an additional complication where a party wall surveyor’s fees are challenged by an appellant. The respondent to the appeal will often have no particular interest in the outcome of the challenge to the surveyor’s fees. Accordingly the party wall surveyor whose fees are being challenged may find that his interests are not being properly protected. Where a party wall award appeal includes a challenge to a surveyor’s fees it is important that this is flagged up in the interim stages of the appeal. The surveyor concerned should then be given an opportunity to apply to be joined to the appeal as a second respondent so that he may take part in the appeal, be required to give disclosure where appropriate, and be permitted to adduce any evidence he wishes in support of his fees’. 

The Court laid down some guidelines on the evidence it would expert to see when a party was challenging the reasonableness of fees, and in short this entails the need for expert evidence on the  following:

1. What would a reasonable party wall surveyor charge per hour  for the work in question. The Judge found that ‘There is, incidentally, no clear guidance from any authoritative source on charging rates for party wall surveyors, in contrast to the position in other professions’, and,

2. Analysis of the relevance and reasonableness of time spent on each item of work undertaken by the surveyor ( in effect to determine the reasonableness under s10 (13) ( see below) ).  This the Judge stated would involve the building owner obtaining a third party disclosure order against the adjoining owner surveyor to obtain his time sheets, documents, workings and other relevant papers. HH Judge Bailey acknowledged that there could be circumstances where the adjoining owner would be required to pay part of the fees of his own surveyor.
   

The Court commented that there are no principles upon which the surveyor or surveyors should act when making awards of costs when exercising their powers under s10(12) and (13) of the 1996 Act.  Looking at liability the Court noted the Act provides, in s 11(1), that except where there is specific provision to the contrary “expenses of work under this Act shall be defrayed by the building owner”. 

HH Judge Bailey reminded us that are provisos to this general  provision:

‘First the fees in question must be reasonable, see s 10(13). The building owner need not pay the adjoining owner’s surveyor’s fees where they are unreasonable in amount because, for example, the surveyor has sought to charge too high a hourly rate, or has charged for unnecessary work, or has taken an unreasonable amount of time to do the work that he has done. 

Secondly, the building owner will not be required to pay the adjoining owner’s surveyor’s costs when these have resulted from unreasonable conduct either on the part of the adjoining owner or the surveyor. The adjoining owner must act reasonably.’

On this second proviso the Judge made specific reference to the case of Manu v Euroview Estates Ltd [2008] 1 EGLR 165, 176G, as detailing examples of the type of conduct that might persuade a court, namely:

‘ taking pedantic and difficult points, making repeated requests for unnecessary information, insisting on obtaining unnecessary or unnecessarily extensive reports from structural engineers, and in conduct apparently designed to hinder or delay the making of an award’

HH Judge Bailey added that :

‘The conduct of any individual has to be set against the standards to be expected generally throughout society’  

In the case the Building Owner argued 1) the Adjoining Owner’s refusal to reciprocate the courtesy she had previously afforded, and 2) the seeking of conditions on work that fell outside of the scope of the Act, and 3) the opposition to the Adjoining Owner surveyor acting as a jointly instructed surveyor, all amounted to conduct that would justify visiting all of the fees incurred on the Adjoining Owner.  The Judge was not persuaded on 1 and 2, but did consider it was unreasonable for the Adjoining Owner to refuse to allow the surveyor to act for both, and therefore directed the the Adjoining Owner pay the Building Owner’s surveyor's ( second ) fees.

Practical Lessons

Hourly Rate 

If you are looking to challenge either on appeal, or on making submission to a third surveyor, the hourly rate charged by a surveyor make sure you adduce expert evidence, perhaps from a few  different surveyors.  In this case the Adjoining Owner actually reduced his hourly rate from £250 to £210 when it came to calculating his fee for the making of the award.  This compares pretty favourably to the hourly rate of some surveyors,  that can be as high as £350 per hour. 

Unnecessary work ( e.g non party wall work) and or taking too long to complete work

This will involve a close and forensic look at the work undertaken by the surveyor after the surveyor has produced his working papers, either voluntarily, or by order.  The expert would be able to comment on the necessity of each element of work and having regard to the hourly rate charged assess whether the time taken to undertake the work was reasonable or otherwise. 

Conduct of the party 

This would in part be covered by the approach referred to above, and an expert would no doubt be expected to comment on whether as a result of the conduct of the appointing owner when compared to the standards expected ‘throughout society’, any work had taken place and/or  taken longer  to undertake. 

Though not mentioned in the judgment it is clear that when looking at reasonableness the question of proportionality is also an important factor to take into account.  

Adding the Surveyor 

If there is to be a challenge of the surveyors fees there is a need to ensure that before the hearing of the appeal, probably on directions, that the surveyor is given the opportunity to be joined as a party so that he/she can be heard.   The question of  seeking discovery of the surveyors papers should also be considered at this stage. 

Conclusion 

In this case having regard to the nature of the works and complexity of the dialogue between the parties  the fees did not seem particularly high,  and the writer is surprised an appeal was launched.  The Building Owner seems fortunate to have succeeded, albeit on one of the three grounds, and it would be interesting to see how the costs of the appeal were apportioned. 

David Pett  Solicitor 

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