Conveyancing Explained

In a bid to reduce property fraud, the Land Registry has introduced “Protect your Property”. The idea is that homeowners, particularly those with no mortgage, are at greater risk of property fraud if the Land Registry can’t contact them when someone makes an application (fraudulently) to register a financial charge against the property. It is also particularly relevant to buy-to-let landlords for the same reason.

You can contact the Land Registry or download the update form from their website at www.landregistry.gov.uk. The service is free of charge.

The latest indicators are that HIPs are to be abolished by our new Government, echoing what property professionals have been arguing for years – that HIPs do not add anything of assistance to the conveyancing process and in some instances, even slow the process down!

EPCs are to remain however; good news for all those who spent thousands of pounds training to become Energy Performance Assessors. Personally, I have found the EPC the most useless part of the HIP pack from a conveyancing point of view. Although I understand they will continue in an attempt to improve energy efficiency, I have yet to speak to a client who has actually read, understood and actioned or proposed to action anything contained in the EPC.

Do you think your conveyancing solicitor has been negligent? You think that he’s missed something or has given you incorrect information?

Before going any further, you need to contact your conveyancing solicitor and ask that he explain why. There might be issues that you’re not aware of because they are complex legal issues or standard practice. You need to give the person time to explain before you make a complaint.

If after hearing the full explanation, you’re still not satisfied, then you need to find out who the firm’s Complaints Partner is. Ask for a copy of the firm’s Complaints Procedure and follow it. Unless you do this, you cannot proceed any further and it may be that negotiations can resolve this issue before things become unpleasant.

If the Complaints Partner still doesn’t deal with the issue satisfactorily, then you can contact the Legal Complaints Service for advice. They deal with solicitors’ negligence and will listen to what you and your conveyancing solicitor have to say. If they believe that your solicitor was negligent, then they will order the solicitor to resolve it.

You can contact the Legal Complaints Service (and not the Law Society, who no longer deal with client complaints) at http://www.legalcomplaints.org.uk/home.page.

The most common complaints relate to “poor service” i.e. that you were either given incorrect information or not told something that you should have been, or that you were charged much more than you originally expected without being told in advance. All such issues can be investigated fairly by the Legal Complaints Service, but you must go through the Complaints Procedure first.

Don’t be too quick to make an accusation of solicitor negligence – make sure you have the fullest information first.

As I said in my article, “Want a low cost conveyancing service? Are you sure?“, it’s not necessarily just about finding the lowest conveyancing quote. Conveyancing is an important transaction in your life and you need to make sure it’s done properly. You want someone who gives you a good service, is knowledgeable, keeps you updated and explains things in a way you understand.

Are you going to get this from the cheapest conveyancing company? You might, but on balance of probability, it’s not likely. I would be more inclined to see what I thought of the conveyancing firm when I rang them. Did they seem knowledgeable when you asked them questions? Would they explain what the disbursements were and what the process was? Did they offer to let you have the conveyancing quote in writing so that you can see the breakdown of what they are including for you? If the answer to all these questions is yes, then I think you’ve found your conveyancer, provided the price isn’t astronomical!

Don’t be afraid to ask questions. Do they have online case tracking so you can see how far things have progressed when you want to and not just when they’re open? Do they write to clients via email, speeding up the rate at which you can get information about what’s happening? Can they explain a basic outline of what the process is? How quickly can you see or talk to your conveyancing solicitor direct once you’ve instructed them? All these issues can help you make your decision. Don’t just go on price. If you ring a conveyancing firm and they’re unhelpful when they’re trying to get your business, what will they be like when they’ve actually got it?

Make a considered choice with more information than just the cost!

I know when you read my next sentence, you’re unlikely to be impressed. The old maxim “You get what you pay for” applies to a conveyancing service, just like any other.

I know everyone nowadays wants the cheapest deal and that people think solicitors are grossly overpriced in what they charge for fees. That may be true of some solicitors, I’m sure, but if you actually saw the amount of work that your conveyancing solicitor actually does, then I believe you’d be more agreeable to paying a proper fee and not just using a cheap conveyancing service.

I would expect to pay from £300.00 upwards for a conveyancing solicitor’s fees alone. That being said, for a single transaction freehold purchase, I would not expect to pay more than £500.00 for the solicitors’ fees.

Remember that your conveyancing solicitor’s total quotation will also include third party fees, known as “disbursements”. You need to ask when getting a quote what the solicitor’s actual fee is.

On average, I would estimate that a conveyancing solicitor on a freehold purchase transaction, is likely to send and receive at least 40 letters and telephone calls and would spend at least 2 ½ hours working on your file throughout the whole of the transaction. When you look at the amount of work that should be done, you can see that really, conveyancing solicitors don’t actually charge that much in terms of their fee!

I do understand that people want to save money, I’m no different, but if you want a proper job to be done, then you need to pay a reasonable fee to your conveyancing solicitor and not just pick the cheap conveyancing quote. If your solicitor reduces his price too much, then it’s simply not cost effective for him to spend time on your file making sure everything is done properly and you’re more likely to be passed to an unqualified unsupervised fee earner. Corners can be cut, and you could simply end up with more problems in the future.

Obviously there is nothing wrong with wanting to get a good deal but cheap conveyancing companies are not likely to give you all the information you need about your new house because it takes too much time. Ring around your local solicitors by all means but see my separate article on “What to look for when getting a conveyancing quote” before you decide who to go with.

Whether contained in the Home Information Pack or whether undertaken independently, the Local Land Charge Search will reveal any planning permissions granted in relation to the property.

If the permissions are dated within the last four years, then the terms of them are still enforceable by the Council if a breach has taken place; however, if a period of four years has elapsed, then breach of planning permission is no longer enforceable. This is because after this period of time, any action by the Council is statute barred.

So, if you’re selling a property and you’re asked to pay for copy planning permissions to be obtained, they only need to be provided if they’re dated less than four years ago.

The time period does not apply in relation to building regulation approvals and completion certificates however. Due to the findings of a case called Cottingham v Attey Bower & Jones (2000), solicitors should always ask for and obtain copies of the building regulation approvals and completion certificates (if cc’s were granted by that Council at that time). Breaches of building regulations can be enforced via an injunction under Section 36(6) of the Building Act 1984 and therefore, the Council can take action at any time, (although usually a period in excess of ten years expired is seen as satisfactory by mortgage lenders if no action has been taken) where works were undertaken from 1985 onwards in breach of the regulations.  Prior to that, such breaches cannot be enforced.

If the building regulation approvals cannot be provided by you, then they should be obtained through the local Council. Depending on the age of the documents, you might be able to get copies via the Planning Portal, which now enables people to access planning permissions and building regulation approvals relating to any property, online. You can’t always get them if they’re older documents though.

Please note that a building regulation approval is issued at the start of the building works when plans etc have been checked. A completion certificate is a more recent document, that is issued by the building control officer once the work has been completed satisfactorily following his inspection.

If the documents cannot be provided, then indemnity insurance should be obtained by the buyer’s conveyancing solicitor to protect both the buyer and if relevant, the mortgage lender. You will be asked to pay for this if you cannot provide the documents to prove that the permissions or approvals haven’t been breached.

Many people think that if they bought a property in their maiden name that either, 1: They won’t be able to sell the property until this has been changed or 2. They need a solicitor to get the surname changed. Neither of these is correct!

Regarding point 1;-

If the house is in your maiden name, when your conveyancing solicitor instructed to act on your sale has a look at the deeds, he will see this. He will then ask you to provide your original marriage certificate, take a copy of it and return the original to you. The copy is certified by the conveyancing solicitor as being a “true copy” of the original. When your conveyancing solicitor sends the contracts and Official Copies of the Register (the name for the electronic register of deeds held by the Land Registry since paper title deeds were abolished) to your buyer’s solicitors, he will also send the certified copy of the marriage certificate. This proves to the buyer’s solicitors that you have legally changed your surname and that you are entitled to sign the contract as the owner of the property in that name. It’s that easy!

Regarding point 2:-

All you need to do is send a letter to the Land Registry, explaining that you are now married and supplying your original marriage certificate. If I was doing so, to make sure it gets there, I would send it by recorded delivery. It might also be helpful if you included a stamped addressed envelope for the return of the certificate.

The Land Registry will then update its electronic register and return the certificate to you. Very simple and no need for a solicitor.

In October 2008, all Estate Agents selling residential property must be members of an Estate Agents’ Redress Scheme. Such a Scheme has to be approved by the Office of Fair Trading.

There are currently two approved estate agents redress schemes. In June 2008 the OFT approved the Ombudsman for Estate Agents Company Limited’s estate agent redress scheme.

The scheme has been put in place because recent research by the OFT has found that there is a high level of customer dissatisfaction with estate agents, but those who are dissatisfied find it difficult to complain and gain redress when problems do occur.

The purpose of the approved redress schemes is to deal with a range of complaints about estate agents relating to their acts or omissions in relation to a Home Information Pack (including providing advice as to whether a Pack is required) and to award redress where complaints are upheld. In addition, the approved redress schemes will have to pass information to Trading Standards and the Office of Fair Trading regarding misconduct.

All estate agents must join an approved scheme by October 2008, failing which they can be fined or ultimately banned.

Make sure when instructing your estate agent that you check whether they are members of an approved scheme and if so, which one. Check how you can seek redress in the event of a complaint that is not dealt with to your satisfaction through the company’s complaints procedure.

The Solicitors’ Disciplinary Tribunal recently found in a case brought to them that solicitors must specify clearly to you when preparing your bill, what they are actually paying out on your behalf for a bank charge and what they are charging for “organising the transfer”. In my view, no admin charge should be made, seeing as the work required is minimal and should form part of the conveyancing process.

If a solicitor is charging you more than the direct cost to them, plus VAT, they must make it clear to you that the excess is a charge by the solicitor and not an expense.

The recent decision by the SDT involved a case in which a firm of solicitors charged clients £30 plus VAT for telegraphic transfers. The actual cost in bank charges to the solicitors was £10 for each TT (a TT or telegraphic transfer is just a same day electronic payment from account to account). The remaining £20 represented profit for the solicitors, to reflect the work they did in organising the transfer; they billed their clients for a “disbursement” of £30, without making it clear how that figure was calculated. It is my view on speaking to clients that many other solicitors, certainly in my area, have done the same.

The SDT found that the solicitors had attempted to deceive their clients. This was a breach of their obligation to act with integrity (under rule 1 of the Code of Conduct to which all solicitors must comply) and of their duty to give clear information about costs (rule 2 C of C). The partners of the firm were fined £1500 each.

The same principle applies to fees for undertaking Money Laundering electronic identification check (EID). Some firms charge their clients more than the EID costs the firm. They cannot do so without making this clear to the client.

If you find yourself in any way unclear regarding disbursements, always bear in mind that you have the right to ask how the figure is calculated and whether it represents exactly the fee charged to the firm by the relevant third party.

Any breach of the Solicitors’ Regulation Authority Code of Conduct is treated very seriously and you would be entitled to make a complaint if you find yourself being deceived in the way described above.

Yet another thing to be aware of regarding solicitors’ costs!

OK, you’re in the process of selling your property and the buyer’s solicitor comes back to your solicitor, saying that they want you to pay for indemnity insurance because you’ve “breached the restrictive covenants“. What does this mean?

Put simply, freehold or leasehold land can be affected by covenants. There are positive covenants and restrictive covenants. Think of a covenant as a legally binding promise either to do something (positive) or not do something (restrictive).

I see more and more cases where people have bought a property and their conveyancing solicitor at the time has not made them aware that covenants affect the property. Restrictive covenants are often breached, particularly in relation to the requirement to gain consent of a third party, often the original builder. This covenant is put in place to ensure that the design of the overall development stays the same in future years.

So, if you didn’t know about them, how can you breach them? Well the answer is simple. The covenants are there in your deeds, whether or not you had actual knowledge of them. Therefore, you are assumed to have knowledge of them in law.

If you breach a covenant, then the person with the benefit of the covenant can enforce it against you. This could mean ripping down an extension that you’ve had built without consent!

Be aware that covenant consent is completely separate to planning permission or building regulation approval. Often, the Council can have the benefit of the covenant and a client will say to me, “Well they must have consented to it, they gave me planning permission/building regulation approval”. Unfortunately, it doesn’t work this way. The Council must be approached (usually through their legal department) to provide consent under the terms of the covenant.

If you have breached a covenant and you are now in the process of selling, then you usually have a few options;-

1. Remove the breach by rectification i.e. tearing down that lovely extension.
2. Obtain retrospective consent from the third party with the benefit of the covenant – bear in mind that this can be time consuming, you’ll probably have to pay a fee, and you have no guarantee that they will agree.
3. Pay for an indemnity insurance policy – although there are specific requirements of the insurance company that must be met i.e. no action or dispute must be currently in effect, the breach must have continued for “x” number of years.
4. If there has been a continuous breach for over 20 years, then the breach can be viewed as “statute barred” and therefore unenforceable. This means that the third party has allowed the breach to continue for all that time and they are therefore prevented from taking action in relation to it.

Your conveyancing solicitor will be able to advise you how to proceed in your particular circumstances.