10 causes of sales failing due to bad conveyancing
- By Max Holloway
- Published 12/4/2009
- Legal
- Unrated
10 causes of sales failing due to bad conveyancing
The following article exposes ten ways in which the conveyancing lawyer, acting for the seller typically bogs down the sales process:
When selling, many conveyancing lawyers have the mistaken notion that all they do is fire rounds of legal forms at the buyer's conveyancer.
This mistaken belief has been perpetuated by the axiom of Caveat Emptor, which obliges the property investor rather than the seller to uncover defects or legal problems with a property.
As if the Caveat Emptor was not enough the courts, through cases such as William Sindall Plc -v- Cambridgeshire County Council 1993 have encouraged convayancing lawyers not to look at the paperwork for fear of being legally exposed to an argument that in reviewing or commenting on the papers that may have some degree of responsibility to the buyer.
We would also argue the commoditisation of conveyancing and the competitive marketing of conveyancing means that Conveyancing lawyers do not give themselves the luxury of being proactive and reducing the risk of the buyer’s conveyancers raising enquiries.
The end result is that the majority of conveyancers do not read through them first with the following results:
1 . They fail to ensure the Buyer’s conveyancing lawyers receive the Home Information Pack. Regrettably only a few conveyancing solicitors produce Home Information Packs and subsequently rely on the agent to supply the HIP to the buyer’s conveyancing lawyers.
2. The HIP, not being prepared by those with deep knowledge of the conveyancing process , has unspotted errors in because the Seller did not have it prepared by a conveyancing solicitor.
3. Many sellers rely on the registered title in the HIP which could be months old, which is not acceptable to the Buyer’s conveyancing solicitors (because it is not up to date) and so valuable time is lost in getting fresh requests.
4. Even if an up to date title is produced, many conveyancers forget to apply for and send the independent documents mentioned in the title. Perhaps as many as one third of titles refer to additional documents which the Buyer’s lawyers always ask to see. The Land Registry can take up to a week to provide these documents. Th
ey are not a mandatory part of a Home Information Pack.
5. Planning permissions for home improvements certainly in the last 4 years, or better in the last 20, if not a complete set, are not produced, so the Buyer’s property solicitor has to chase. According to Fridays Property Lawyers data, there is an average of 1.5 planning permissions applicable for each property.
6. New Home Warranty papers fail to be delivered. They are not mandatory as part of the HIP and are often in the hands of the Seller. Too frequently these documents are lost and precious time is wasted getting duplicates. No mortgage broker in the United Kingdom will lend on a newly built property without such warranties being to hand.
7. All UK lenders require conveyancers to be satisfied with management information for a leasehold property. All too often the seller’s conveyancing solicitor does not send this information out on a leasehold sale, unless requested, potentially losing weeks.
8. Expired Protocol Forms are often sent by the sellers solicitor, meaning additional questions have to be asked to get them as up to date as the latest copy.
9 . Not reading the Sellers Property Information Form or Property Information Questionnaire which mentions guarantees, or building developmentsor UPVC or electrical works – so the conveyancer for the Buyer has to then pursue this extra information.
10 . Having a plethora of contractual ‘special conditions’ some of which can be unusual, like seeking a remittal of searches, or not warranting the accuracy of plans or having clause after clause of what penalties the Buyer would be liable to pay if they fail to complete.
If a seller’s conveyancer dealt with all the afore mentioned points it would undoubtedly speed up sales but it would not make the paperwork “exchange ready “. So, are exchange–ready – Home Information Packs the solution? Unfortunately we are yet to see such a document. Our fear is that they are as rare as hen’s teeth. One particular company indicates that their Home Information Pack will include a certificate saying that the Home Information Pack is “Exchange Ready“. Given that the ERH does not deal with all of the afore mentioned points at best it is an insult to the publics intelligence but at worst it may merit serious investigation by Trading Standards for being erroneous.
When selling, many conveyancing lawyers have the mistaken notion that all they do is fire rounds of legal forms at the buyer's conveyancer.
This mistaken belief has been perpetuated by the axiom of Caveat Emptor, which obliges the property investor rather than the seller to uncover defects or legal problems with a property.
As if the Caveat Emptor was not enough the courts, through cases such as William Sindall Plc -v- Cambridgeshire County Council 1993 have encouraged convayancing lawyers not to look at the paperwork for fear of being legally exposed to an argument that in reviewing or commenting on the papers that may have some degree of responsibility to the buyer.
We would also argue the commoditisation of conveyancing and the competitive marketing of conveyancing means that Conveyancing lawyers do not give themselves the luxury of being proactive and reducing the risk of the buyer’s conveyancers raising enquiries.
The end result is that the majority of conveyancers do not read through them first with the following results:
1 . They fail to ensure the Buyer’s conveyancing lawyers receive the Home Information Pack. Regrettably only a few conveyancing solicitors produce Home Information Packs and subsequently rely on the agent to supply the HIP to the buyer’s conveyancing lawyers.
2. The HIP, not being prepared by those with deep knowledge of the conveyancing process , has unspotted errors in because the Seller did not have it prepared by a conveyancing solicitor.
3. Many sellers rely on the registered title in the HIP which could be months old, which is not acceptable to the Buyer’s conveyancing solicitors (because it is not up to date) and so valuable time is lost in getting fresh requests.
4. Even if an up to date title is produced, many conveyancers forget to apply for and send the independent documents mentioned in the title. Perhaps as many as one third of titles refer to additional documents which the Buyer’s lawyers always ask to see. The Land Registry can take up to a week to provide these documents. Th
5. Planning permissions for home improvements certainly in the last 4 years, or better in the last 20, if not a complete set, are not produced, so the Buyer’s property solicitor has to chase. According to Fridays Property Lawyers data, there is an average of 1.5 planning permissions applicable for each property.
6. New Home Warranty papers fail to be delivered. They are not mandatory as part of the HIP and are often in the hands of the Seller. Too frequently these documents are lost and precious time is wasted getting duplicates. No mortgage broker in the United Kingdom will lend on a newly built property without such warranties being to hand.
7. All UK lenders require conveyancers to be satisfied with management information for a leasehold property. All too often the seller’s conveyancing solicitor does not send this information out on a leasehold sale, unless requested, potentially losing weeks.
8. Expired Protocol Forms are often sent by the sellers solicitor, meaning additional questions have to be asked to get them as up to date as the latest copy.
9 . Not reading the Sellers Property Information Form or Property Information Questionnaire which mentions guarantees, or building developmentsor UPVC or electrical works – so the conveyancer for the Buyer has to then pursue this extra information.
10 . Having a plethora of contractual ‘special conditions’ some of which can be unusual, like seeking a remittal of searches, or not warranting the accuracy of plans or having clause after clause of what penalties the Buyer would be liable to pay if they fail to complete.
If a seller’s conveyancer dealt with all the afore mentioned points it would undoubtedly speed up sales but it would not make the paperwork “exchange ready “. So, are exchange–ready – Home Information Packs the solution? Unfortunately we are yet to see such a document. Our fear is that they are as rare as hen’s teeth. One particular company indicates that their Home Information Pack will include a certificate saying that the Home Information Pack is “Exchange Ready“. Given that the ERH does not deal with all of the afore mentioned points at best it is an insult to the publics intelligence but at worst it may merit serious investigation by Trading Standards for being erroneous.
Max Holloway
Author from Fridays Property Lawyers, Conveyancing specialists for all of the UK and London.
View all articles by Max Holloway