Agents struggling with high rise sales as conveyancers battle PI insurance
More questions are being asked around how many leasehold properties each conveyancing firm is transacting and how many they plan to handle during 2024.
Estate agents are still struggling to finalise the sales of apartments in towers over five storeys or 11 metres after ongoing concerns created through changes to the Building Safety Act (BSA) earlier this year.
The Neg revealed in May how having been introduced to parliament in July 2021, the Building Safety Act 2022 introduced new duties for the management of fire and building safety in high-rise residential buildings (main picture) from 1st April 2023.
RENEW POLICIES
Late autumn is the main time throughout the year in which professional indemnity insurance (PII) providers choose to renew policies for conveyancing firms and this year The Neg can reveal that more questions are being asked around how many leasehold properties a firm is transacting, how many fit BSA criteria and how many they plan to do in 2024.
Chris Barry, director of business development at London-based Thomas Legal, tells The Neg: “As a result of this mass renewal, firms are finding it difficult to obtain insurance if they continue to transact BSA work, or, in some cases, their annual renewal premium is double the prior year meaning they will most likely take the tough decision that completing on BSA transactions is not financially viable for the firm.
“Clients are contacting me to explain they instructed a firm up to as long as six months ago and are now ready to exchange contracts.”
INSURANCE RESTRICTIONS
But he says: “The firms are sadly communicating that they can no longer complete the matter due to insurance restrictions and they will have to find another firm to take over the matter for completion.”
Barry believes time will help the situation as more landlords and management companies deal with qualifying buildings and qualifying leases – timescales will reduce and remedial works should start to be scheduled where needed making the process easier.
He adds: “Clearly a firm’s appetite to risk is their decision but that is no help for clients who have been led down the garden path.
“My best advice to anyone thinking about buying or sell a leasehold property in the near future is to ask a law firm they obtain a quote from if they have experience in the BSA before deciding who to instruct. If the person on the phone can’t answer the question, that’s normally a sign to avoid.”
