As property professionals, when we engage with people who are buying, selling or re-mortgaging, it’s mainly in terms of the importance of the individual service that our company offers. For example, estate agents talk to buyers about finding a house, lenders and brokers talk about financing the purchase and surveyors talk about the structural state and value of the property.
But buyers and sellers don’t tend to focus on individual services to the same extent; they have a practical and usually emotional reason for moving and just want the transaction completed.
They might be a first time buyer with very little idea about all the stages they need to go through to secure a home; someone trading up with kids to worry about, moving because they’re desperate for space or need to get into the right school catchment; someone who has to trade down because of death, divorce or debt, or it might be a transaction purely for financial reasons, such as releasing funds to top up a pension or pass money over to children to help them buy their own home. And with a successful purchase or sale being entirely dependent on the legal paperwork being in order, it’s no surprise that one of the biggest frustrations and most misunderstood areas of buying and selling for consumers is the conveyancing process. In fact, removals company Bishops Move undertook a survey of 1,000 home owners 29 per cent of whom, when asked, said the most difficult service provider to deal with was the solicitor, with utility companies some distance behind at 18 per cent.
From a legal perspective, conveyancing isn’t easy; it’s reliant on an awful lot of other people and companies doing their job properly. To get the legals to a stage where contracts can be exchanged, a solicitor or licensed conveyancer needs co-operation from buyers and sellers up and down the chain, their agents, legal companies, lenders, insurance, local authorities, the Land Registry and surveyors. It’s a massive undertaking. What makes it harder is the fact that few buyers and sellers understand what’s required of them, nor do we as an industry help our clients understand the scale of the task and the tim
e it takes to provide, read, ask and answer questions on the huge amount of paperwork the legal process generates.
A personal case study
I’ve just bought and sold a property on behalf of a family member. Although we had a small chain – just three properties and our buyers were in rented accommodation – we still had big problems when it came to the legals. Luckily, I knew what needed to be done and was able to put the time aside required to collate all the information. I decided to record how long everything took and even surprised myself with the results:
To sell the property
- One day to secure four people’s identities and obtain signatures in order to appoint the legal company
- One day to collate in a file all the information on the property, such as guarantees and details of works carried out
- One day to secure four signatures for the Land Registry form
- One day to fill in four pages on the Property Fixtures and Fitting Form and 12 pages on the Information Form
- Half a day to scan all paperwork and send to the solicitor
- Half a day to-ing and fro-ing with phone calls/emails
- Total time for sales legals: five days
To purchase the property
- One day reading/checking Property Fixtures and Fitting Form and Information Form
- One day getting to grips with the issue of the loft ‘room’ not meeting the building regulations
- Half day asking questions and sorting licence with the local authority for part of the garden
- One day dealing with pressured emails/telephone calls on getting to exchange – despite our buyers not being ready (mortgage hadn’t been approved)
- One day negotiating reduction for works required on the property
- One day on final paperwork and asking/answering questions for exchange
- Half a day emails/phone calls
- Total time for purchase legals: six days
Key complications and frustrations experienced during the legal process:
1. Pressure put on us to exchange, despite the fact our buyers, who needed a mortgage, weren’t ready.
2. The seller’s lack of willingness and understanding to provide guarantees and accept checks on the property.
3. The sheer amount of paperwork and time needed to carry out the legals.
4. The property Fixtures and Fittings Form had no space for additional comments or clarification of information provided.
5. Solicitors taking time off on the expected day of exchange or leaving dead on 5pm.
Having said this, our solicitor was fabulous. She took a great deal of care and caution on the buying and selling legals and seemed to be available by email almost 24/7! She even worked on a Saturday morning, and our appointment to go through the paperwork and sign final forms was carried out in the evening at home.
However, the overriding issue for me as a consumer was the lack of clarity on the timings of when we would be able to complete the transaction.
On top of that, organising removals and change of address in the ‘standard’ two weeks from exchange to completion would have been impossible in our case. We negotiated five weeks between exchange and completion; the packing and removals took eight days –with a complete packing service. We’d have never coped with the ‘normal’ timetable and it seems ridiculous that a removals company should have to run such a physical, manpower-intensive business on just two weeks’ notice.
Improving the conveyancing process
As things stand currently, the legals of buying and selling a home can be extremely complicated, frustrating and timeconsuming for all involved.
Good conveyancing can genuinely make the difference between a sale and purchase succeeding, with minimum stress, and a whole chain breaking down, costing everyone – including agents – time and money.
I asked for thoughts and ideas from everyone involved in the chain about how conveyancing has improved for consumers over the last five years and what more we could do to improve it for the future.
From estate agents to surveyors and the legal profession, everyone believed that the use of email, the internet and bespoke systems has made a massive difference to the speed of the conveyancing, benefiting both the industry and the consumer.
Technology can be used to show progress and what’s needed to move things forward. Dan Bennett, Chesterton
Dan Bennett from Chesterton Humberts in Nottingham says, “Legal companies that have embraced technology have improved the speed of transactions and, more importantly, used it to update the chain on what’s happening and what’s required to move things forward.”
Andrew Montlake of Coreco Mortgage Brokers in London comments, “For some it has been a painfully slow process, but more and more solicitors and conveyancers are embracing technology.”
It’s been very slow, but more solicitors and conveyancers are embracing technology. Andrew Montlake, CORECO
Debra Kent from Charles Russell, one of the UK’s top 50 full service law firms says, “Increased speed of search results and electronic Land Registry databases now offer a good turnaround service.”
The legal profession isn’t quite there yet, though. Andrew goes on to say, “Some still shut for lunch and refuse to call back to provide a simple update on my client’s case”. Dan agrees, “The number of times we end up having to chase the legal company for the client makes everyone’s life difficult and ends up involving far more calls than necessary.”
Melanie Simon from James Pendleton, last year’s Negotiator Awards Best Independent Estate Agent, believes the biggest change has been that conveyancing companies and estate agents learning to work a lot more closely together.
She says, “We put great emphasis on developing professional relationships and continue to strengthen and extend our links with solicitors.” As far as JPHomes is concerned, their role is ‘to manage smooth and hassle-free property transfers’. Part of that role includes agents working closely with solicitors to act in the best interest of the client.
The Law Society is doing what it can to try and secure consistent standards of service within their industry and launched a kitemark scheme called ‘Conveyancing Quality Scheme’ (CQS) in 2011.
Jonathan Smithers, chair of the Law Society Conveyancing & Land Law Committee says, “CQS acts as a beacon of quality for homebuyers. There are now more than 1700 firms in England and Wales all whom have had to undergo a robust application and assessment to join the scheme”. The scheme aims to help consumers and the industry recognise better conveyancers to the extent that some lenders such as HSBC and Clydesdale & Yorkshire Bank will only allow CQS firms to act for them and the borrower.*
CQS acts as a beacon of quality for homebuyers. It now has over 1700 members. Jonathan Smithers, Law Society
The reality is that everyone in the buying and selling process could do a better job of helping the legals go smoothly. In addition, legal companies can also help other professions such as surveyors and removal companies to be contacted early in the process to avoid disasters at the end of the chain.
Clients can get lost in the sea of legal information that a move creates. Hugh Dunsmore Hardy, Winkworth
Hugh Dunsmore Hardy from Winkworth believes the legal professions should take more time to “highlight relevant issues within the paperwork for their clients, rather than the client getting lost in the sea of information a move provides”. He also thinks agents can play an important part by “encouraging seller’s to voluntarily put together as much up front information as possible”.
Melanie from James Pendleton firmly believes things can be improved by interaction between the legal companies. She explains, “solicitors and conveyancers bring together various legal intricacies; it’s the estate agents’ job to convey and act upon these intricacies”. For JPHomes, there needs to be a much better understanding of the job of the legal company and estate agent by both parties.
It’s apparent when talking to professionals across the chain that much could and is being done to improve the process, without any requirements for a change in the law.
For example, The Law Society is taking practical steps to improve the process with CQS as well as the recent consultation to improve the Property Information and Fixtures and Fittings/Contents form and amendments are due in early 2013.
Graham Ellis from the Royal Institution of Chartered Surveyors says, “In my experience the legal adviser and surveyor tend to work remotely, but there is opportunity to work closer together”. Legal companies know if the client is only organising a mortgage valuation as opposed to a proper survey which will help protect their client. As such they can advise or even recommend a local surveyor.
“In return, the legal profession can use a survey as their “eyes and ears on the ground“ to pick up issues which may need to be investigated further, e.g. is there a warranty covering replacement windows? All RICS Home Surveys include a section on issues for the client’s legal adviser and there is no reason why the client cannot copy them into a survey.”
Chris Marshall from Bishops Move also believes legal companies – and agents – should work much more closely together. From his perspective, removal companies are often seen as a “poor relation” that just turn up at the end of the chain. This causes major stress for the consumer who ends up having “unrealistic expectations” of what can be done.
For example says Chris, “We have taken calls on a Monday saying they want to move in a few days’ time, even on the Friday of the August Bank Holiday – our busiest day of the year!” Consumers, agents and legal companies need to make sure their clients are aware they need to contact quality removal companies four to six weeks prior to moving so time is booked in – even if the dates move – concludes Chris.
Lenders & the legal process
Securing the offer to lend money does seem to be an area which must be improved and although there are some things happening such as the Law Society’s CQS system, one of the key problems, according to Andrew from Coreco, is “Lenders don’t think about their choice of solicitors carefully enough. A big issue is with ‘free legals’ offered for re-mortgages which end up with borrowers feeling any sense of urgency or service is lost”.
The Law Society believes a major problem is that each lender has their own system and processes and hopes its CQS system, if embraced by lenders, will result in a better conveyancing experience.
What consumers can do
We often seem to blame the other professions for problem within the chain, but a lot of the issues can also come from the buyers and sellers themselves. There is much both can do to help ensure the purchase and/or sale goes smoothly.
Debra from Charles Russell speaks up for the legal profession and stresses clients could “improve their position by giving prompt, accurate and full responses to all parties, including the bank/building society”. She finds clients sometimes don’t appreciate the importance of the questions the legal company asks, yet expect the legal company to always respond immediately to their own query.
Things we should all try and persuade consumers to do
1. Instruct a solicitor/conveyancer at the time they are sure they are going to buy/sell
2. Voluntarily put together as much information as possible such as proof of identity, guarantees, work carried out on the property, paperwork on any issues such as subsidence, additional insurances, services to the property and where key things are such as the fuse box, stopcock etc.
3. Putting time aside to read, ask questions and respond quickly to requests from lenders, legal companies and estate agents.
4. Understanding the legal process is there to protect them and why each stage is required.
5. Discussing a potential move early on with removal companies, not waiting until exchange.
Tell us your views on what can be done to improve the legal process for consumers to help ensure a smooth move. Email [email protected]
*More information on solicitors and CQS www.lawsociety.org.uk/accreditation/specialist-schemes/conveyancing-qualityscheme/
More information on Licenced Conveyancers and the Alternative Business Structure (England and Wales) which allows non-lawyers to offer legal services: http://www.clc-uk.org/index.php
Kate Faulkner is Managing Director, Designs on Property. www.designsonproperty.co.uk