Agents struggling with high rise properties after conveyancers pull plug

Estate agents are struggling to finalise the sales of apartments in towers over five storeys high after a large number of conveyancers pulled the plug on transactions over worries created by the Building Safety Act which went live last month, it has been claimed.

Having been introduced to parliament in July 2021, the Building Safety Act 2022 introduces new duties for the management of fire and building safety in high-rise residential buildings (main picture) from 1st April 2023.

REGULATIONS

But a growing number of solicitors and conveyancers are refusing to work on high-rise property transactions due to the new building regulations on cladding and even when there is no cladding present.

Chris Barry, director of business development at London-based Thomas Legal, says: “Several law firms are refusing to accept new clients where the building is above five storeys or 11 meters.

“This is because the law firm has to satisfy building eligibility, qualifying leases and work around growing lender requirements.

“Professional indemnity insurance providers will be asking law firms how many properties they are transacting that are subject to the building safety act upon renewal.

“However, I don’t think insurance and extended timescales are the only reason for withdrawing from the market. There seems to be a real lack of clarity around what happens in certain scenarios and it is this uncertainty that is encouraging a “wait and see” approach.”

Talking to Iain McKenzie, chief executive of The Guild of Property Professionals on a recent episode of The Home Stretch podcast, Rob Hailstone, chief executove of Bold Legal Group, says: “The Act is understandably worrying and confusing conveyancers with some not acting on leasehold properties as a result.

“Many chains will have a leasehold property within the transaction that is impacted by the Act, so this could result in the entire chain being negatively affected if there is a delay.

“Based on what I have seen, I think the coming months will see more and more transactions almost grind to a halt or collapse completely.”

COMPLEX

And Amit Patel, an adviser at Trinity Finance, adds: “Property transactions are getting increasingly complex and the regulations are becoming more burdensome.

“The fiasco with the EWS1 form is a great example. You now have some solicitor firms that will not represent a client if the building has cladding, as they do not want to open themselves up to a potential claim further down the road.

“Some firms even charge a premium if the cladding is involved. The blame for this whole fiasco lies at the feet of successive housing ministers as they keep sending mixed messages on the exact requirements.”

The Department for Levelling Up, Housing and Communities has been contacted for comment.