Wearyconveyancer

Property Recession

2008-07-09T07:40:00.002Z

Well there I was last November moaning about the level of work coming in and predicting a bad year ahead. Unfortunately I was proved right and we are now in the worst period for conveyancing since 1993. My new file openings are down 32% compared to the same period last year and my turnover is down 23% but I forsee this percentage increasing in the next few months due to the number of file starts in the last three months being significantly down on the previous year. As a result I am two staff down having made one person redundant and the other dying tragically at the age of 55.

One local multi branch firm heavy into conveyancing has made 30 people redundant and another medium sized firm in one location has issued letters of redundancy to all the staff and has asked for volunteers to be made redundant. Apparently the senior partner who issued the letters pissed off on holiday the day before the letters were delivered. Local Agents have closed offices and others have laid off staff.

The difference this time compared to the 90's is the speed of the downturn. It all started for me in March after we had opened more files in January and February this year compared to last. I can see no prospect of any short or medium term improvement in the outlook for conveyancing so it's just as well that the downturn coincides with my plan to slim down the business prior to my move West. The plan to retire completely has been revised and I will now take the firm to my West Country retreat where I will continue to service my clients many of whom I have acted for over a period of 30 years.

Perhaps my readers (3 at the last count) would like to share their experiences?

Christmas Cheer

2007-11-27T08:31:00.000Z

So HIPs for everyone just before Christmas. I have yet to be asked to compile or order a HIP and it appears that most of my local agents are arranging them directly with HIP providers. The work seems to still be rolling in but at a noticeably slower pace. I read that last month was the lowest total of mortgage lending since records began (early 90's I think). I have a nasty feeling that 2008 is going to be really difficult and the numbers of transactions will be significantly down on recent years.

On the cost of HIPs I have a local provider who will compile a compliant HIP (freehold) for £275 including VAT. This is the sum I currently ask for on account of disbursements from a Purchaser and I hear that most Sellers are paying the cost of the HIP upfront rather than deferring the cost. So, apart from the leasehold complications which have now been put back to the middle of next year, it appears that HIPs have not proved to be the problem that many suggested (at least from the cost/compiling point of view).

December looms and the usual panics to "be in by Christmas" will soon be starting.
My staff are pressing me to close on Christmas Eve as we usually close at 1pm on that day and they dont think it is worth coming in on a Monday for just half a day. What they forget is that they get five weeks paid holiday a year and we shut between Christmas and the New Year.

To my three readers I wish you a happy Christmas and a prosperous New Year (no chance).

HIPs Questions

2007-09-21T08:08:00.000Z

Nikhil has posed a number of questions about HIPs in a comment on my last post. I claim no special knowledge/expertise in this area and comment only with the benefit of 40 years experience.

I don't understand the term "non compliant personal searches". I recall the start of personal searches decades ago which arose due to the time taken by some local authorities to supply search results. The standard of replies obtained was very patchy and there was no insurance cover for the search companies in case of negligence. As the cost of official searches spiraled it became possible to create a business model for a personal search company to undertake the searches at very little cost in terms of fees paid to the local authority and to charge an appreciably lower fee for the search result and make a profit. Some local authorities tried to put obstacles in the way of these companys by restricting the number of personal searches they could do in a day or restricting to one or two days a week the appointments for personal searches. The search companies managed to, by and large, stop these sorts of practices and there are now many personal search companys in what is now a fairly sophisticated industry. The personal search companys have successfully lobbied the government to allow personal searches in HIPs and they are also attempting to persuade all mortage lenders to accept them. That said, I do not see personal search companys disappearing over time unless the local authorities get their acts together and deal with all search requests electronically in a matter of days and reduce the cost of official searches to put the squeeze on personal search companys.

The cost of HIPs is in the band £300 to £350 for most properties. The price pressure is entirely competition based and as most Sellers have absolutely no interest in doing any more than supplying a compliant HIP I think their sole concern will be price. I expect we will shortly see a much higher demand as we are now 11 days past the September 10 deadline and Agents will not be able much longer to back date the instructions to market the property.

I haven't a clue when the Government will apply HIPs to all properties and assume this will be when they consider there are enough Energy Inspectors. As to the future I would like to see the whole thing go away but it appears there are moves to expand HIPs into some sort of conveyancing package that may reduce the role of solicitors in the process.

I'm off to Dorset next week for another hunt for a retirement property. I need to be "gone" before HIPs and e-conveyancing take off.

2007-08-28T09:50:00.000Z

I have been prompted by a comment to waken from my state of near retirement to comment (once again) about the HIP's debacle. All conveyancers know that this whole business is a waste of time and money. It would have been easy to make provision for an Energy Rating Certificate for properties being sold and then perhaps link this to registration at the Land Registry in much the same way as SDLT forms i.e you cant register the transfer/mortgage without producing the ERC to the Land Registry.

We have had all the comment in the papers about Lenders not accepting personal searches which we knew all along. I have just received an email from a personal search company with a list of lenders who will accept personal searches. I have in the past researched this issue and have found some lenders who in their CML Handbook part 2 replies say in answer to the question "do you accept personal searches" , "yes but at your risk". One wonders why any lender would expect me to take a risk rather than opt for an official search.

It appears most Sellers will commission personal searches for their packs as it will be the cheaper option and we will then have to explain to our clients (the Buyers) the difference between personal and official searches and sometimes have to insist on new official searches as the lender will not accept personal searches.

One thing has become clearer and that is that most of my local estate agents want nothing to do with preparing or sourcing HIPS. They appear content to refer their clients to a local solicitor to get the HIP but I suspect that may not remain the case once they have to have the HIP before they can market the property as opposed to the transitionary arrangements at present in effect.

So the big question is "how many HIPS have I done up to the 28th August 2007". The answer, you may not be surprised to hear, is NONE. I did get an email from HIPAG a week or two ago who appeared very excited about doing a HIP or two but at that time they still hadn't done an unregistered HIP or a leasehold HIP. I suspect all will change with the inclusion of 3 bed properties next month.

I am geared up to package HIPs if a client wants me to do that but I suspect I will just order one through Richards Gray or similar (how weary is that!).

Dont know about you but new work is very slow at the moment.

HIPS (again)

2007-02-15T10:44:00.000Z

So what the hell is going on with HIPS. We are assured they will be compulsory (sort of) in June 2007 but still so much appears to be in the air. The Government are still consulting and therefore further changes are likely. Who is going to provide the Energy Rating Certificates?

How am I ( a small High Street practice) supposed to prepare for all this and chat to all my Estate Agent "friends" to sell my solution with all this crap still up in the air.

Oh! by the way, don't talk to me about ABS (I thought this helped you crash your car in a straight line), Tesco Law etc.

On a completely unrelated topic I read in the Gazette this week that the consumer complaints arm of the Law Society will be actively seeking complaints from clients by targetting them. It's bad enough managing clients often unrealistic expectations without someone else stirring them up to complain.

That retirement home in West Dorset is the answer

Christmas Conveyancing

2006-12-19T10:38:00.000Z

So here we are again. Four more working days to Christmas and still trying to do simultaneous exchanges and completions so the beloved clients can "be in by Christmas". This annual scenario with its attendant stress levels is the reason most people think I'm a miserable bastard every Christmas. This annual extravaganza drains me to such an extent that I function much like a zombie during the holiday and I find I am barely refreshed when we return to the fray in the new year.

So, what will next year bring and what (if any) resolutions will I make so far as my practice is concerned. Well, I doubt I will think of any major changes to the way we turn out the work but then, of course, we have the prospect of HIPS to look forward to in the summer and the ever approaching adoption of e-conveyancing by the Land Registry. On balance I will probably concentrate on finding my ideal retirement home in Dorset and try to convince my senior assistants that they would be well served by joining me in partnership and then allowing me to retire. I can't wait.

Happy Holidays.

Chancery Woes

2006-09-14T11:30:00.000Z

The reason for my recent lack of postings is due to preparation for a three day Chancery trial on the Isle of Wight. I acted for clients when they bought a property in Cowes which included a Boat Park subject to use by the other 10 properties on the development and mooring on a Sea Wall adjoining a Boat Yard. A dispute arose with the Boat Yard owner over the ownership of the Sea Wall which was in my clients' title but which he claimed and he sought Rectification of the Registers of the two titles.

I rarely these days deal with litiguous matters but got sucked into this one having started dealing with it by corresponding with the Land Registry but they got cold feet and directed that the matter be referred to the High Court for a decision and by then I was in too deep to back out.

The Trial finished yesterday and we lost but I am now seeking an indemnity for my clients' losses from the Land Registry under Schedule 8 of the Land Registration Act, 2002 which is a first for me in 38 years of practice.

So today its back to conveyancing. Roll on the weekend

Home Information Packs

2006-07-24T16:02:00.000Z

Well what was that all about? After much anxiety in the High Street and the forecast death of the small firm conveyancer we read that the whole thing was a load of bollocks and the compulsory pack will now be meaningless and better still can be knocked together in about 15 minutes. After the SIPPS debacle where pension companies spent millions devising their products and organising seminars for the anticipated rush to put residential properties into pension schemes only for Gordon to change his mind at the last minute and scrap the proposals, this time Two Jags old department have done much the same to Rightmove, Countrywide and others (I must admit to some satisfaction to their plight).

The compulsory part of the packs will now be an Energy Rating which I think any Surveyor can do, local search and a copy of the Land Registry entries. What this does to help the Buyer I don't know and any solicitor with a PC and Broadband can organise this in no time for the Agent leaving the Pack Providers with nothing to sell.

The people I feel sorry for are the 300 poor sods who've shelled out a reputed £7,000 to be Home Inspectors and now will have nothing to inspect. Will the Government compensate them ? Answers on a postcard to You must be joking, P O Box 1, Luxury flat, Admiralty Arch, London

HIPS

2006-06-15T08:25:00.000Z

I received an email from the Law Society's HIP thing yesterday advising that the regulations had just been published. Logging on to the website I only had a short time to review the details but it appears the "packs" must contain certain documentation and may contain other documents. The must have documents appear to be a copy of the land registry entries (or deeds if unregistered), a local search and the Home Condition Report and thats about it. What about a Contract, Property Information Form, Fixtures and Fittings form etc.

I cannot see any benefit to a prospective Buyer in having any of these documents available at the point of viewing other than perhaps the Home Condition Report. I believe that Estate Agents will only put in a HIP what they have to in order to get the property on the market and they would be able to source the search and copy entries without the need for solicitor involvement (transaction online etc). I can't see this as being the "death" of the High Street practice or am I missing something?

CHAPS Payments

2006-06-09T12:55:00.000Z

Another Friday and another load of grief with our Bank. Our Bank (nameless of course) has chosen to outsource its CHAPS receipts and payment procedures to Malaysia or somewhere that way.We telephone a UK number where the details of the payment are noted and the telephone call recorded and they then give the details to Malaysia who action the payment. The receipts by CHAPS are actually credited to our account by Malaysia and we receive a telephone call from them to advise receipt. You may already see that this is a crap system for the customer as there are too many people involved where delay may occur.

Today we needed funds off deposit to complete a transaction. They were sent to us by CHAPS before 9.30 am this morning. At 1.45 pm we were still waiting for a call to confirm receipt of the funds. We telephoned the UK number to enquire as to the receipt to be told "we can see the funds but they are not yet credited to your account". The funds "arrived" at 11.06 am but at 1.45 pm we had still not received them in our account i.e. Malaysia had sat on the funds for 2hrs 45 mins and done nothing to credit the funds. I have spoken with our "relationship manager" (sic)previously about these delays and how badly it affects clients waiting for keys but he seems powerless to do anything about it. I know we could change banks but this is a major excercise with client account.

I wonder how these sort of problems will affect e-conveyancing and the Land Registry matrix and just pray that I can retire before all this is in place.

Completions and Bank Holidays

2006-05-30T07:54:00.000Z

Friday 26th May and another Bank Holiday Monday looms. As usual we had a number of completions and you just know something is going to go wrong. On this day the Buyer's Solicitors had a problem with their mortgage advance. Apparantley, their change of status from partnership to LLP had been approved by the head office of the lender but someone forgot to tell the completions dept. The story is the completions dept. said earlier in the day that the advance would be sent and then changed their mind later so that the funds were never received. The Partner dealing with the matter was on leave, his experienced assistant went home at lunchtime and it appeared to me that the matter was left with the receptionist to sort out. Late in the day (4.30pm) the Senior Partner got involved and we managed to cobble something together to enable the clients to move into their new houses but this was around 5.00 pm. Much stress and tears from my client.

The motto of this story is to ask for your mortgage advance the day before completion and if it doesn't arrive you have time to sort out the problem before it becomes time critical.

Developers

2006-05-25T15:42:00.000Z

I dont act for many developers and those I have tend to build the odd property or maybe a pair. I have a small development of four new houses for a builder client all selling for in excess of £500K and since day one the client has been on my back. The last plot is due to exchange and complete tomorrow and I received a fax this afternoon from the buyers' solicitors advising me that one of the previous purchasers has done a search of whole rather than in respect of the plot they were purchasing. The following points arise:-

1. The wrong search was in respect of the first plot sold and since then two others have completed. The searches of part of the two later completions must have revealed the earlier search of whole which has priority and on checking the day list it confers priority for a charge in favour of Coventry Building Society. Neither of the solicitors has raised a query about this.
2. I've told the client this afternoon as it may affect the proposed completion tomorrow and all he wants to know is who is going to pay him compensation if he doesn't receive the sale proceeds tomorrow and why this has arisen at the last minute.

Is there a lesson from this I don't know. The solicitor who lodged the search of whole is nearly as old as me so I guess he delegated the search to someone lower down the food chain who clearly didnt know what they were doing. Needless to say he is out this afternoon and will be in tomorrow at 10 a.m. when he will have to fax the land registry to cancel his search of whole and lodge the correct search of part unless he has already lodged his AP1 but I doubt that given the delays with SDLT if you dont submit the returns online. I will probably use up £200 of fee earning time sorting this out so the question is "who will pay me compensation" and the answer is nobody.

Roll on the weekend

High worth divorce

2006-05-25T08:03:00.000Z

It's been many years since I practised matrimonial law. Those were the days when Wachtel v Wachtel and Lord Denning (who incidentally signed my admission certificate) were the buzz.I've just read the full decision of the House of Lords in Miller v Miller and McFarlane v McFarlane at Bailii.org and wonder why anyone with large capital assests or high income would want to enter the state of matrimony. Don't get me wrong I have no problem with a just division of assets on divorce but it seems to me that today there is little realistic prospect of marriage for life in many cases and the financial consequences for high earners are now so dire following these decisions I believe many will think twice before going down on bended knee.Perhaps the pre-nuptial agreement should be given legal force so that the individuals can set out what is to happen if the relationship ends with maybe differing outcomes depending on the length of the marriage rather than allowing the Judges to make that decision.

That said, my high street practice matrimonial clients rarely have a pot to piss in so it wont make a blind bit of difference to my matrimonial legal executive.

Converted Properties

2006-05-24T09:24:00.000Z

I heard today of an issue raised with a conveyancer in another firm. She acts for a developer who has converted offices over a shop into residential flats with all appropriate planning and building regulation approvals. The flats are now being sold and the first purchasers solicitor has asked for NHBC, Zurich, Architect's Certificate etc. It appears none of these is available only the building regs completion certificate which is, of course, not a guarantee. A close study of the CML handbook reveals in para 6.6.3 that there is a mortgagee requirement for "newly converted property" to have one of the specified documents. In this particular case the proposed mortgagee has been asked whether they will proceed with the loan with only the building regs certificate and an answer is awaited.

I recently acted for a developer who converted a large victorian house into four flats and we sold them on new 99 year leases and none of the purchasers solicitors asked for any documentation pursuant to 6.6.3 of the CML handbook which was not available in any event.

Am I missing something or are most solicitors unaware of the CML handbook requirements?

Reneging Sellers

2006-05-23T15:51:00.000Z

Once again I have today got to the point of exchange on a sale and purchase only to find that the one of the sellers has gone back on her word to vacate and now wants to synchronise her sale with a purchase but she hasn't even found yet. Its the usual story. At the outset we were told the Sellers were divorcing, Mr has already vacated and Mrs was going into rented. We argued about completion date on Friday last week and yesterday finally compromising on the 9th June then we hear this bombshell this morning.

Give me strength and also tell me how Sellers Packs will make any difference to this oft repeated scenario. The only saving grace is I dont do "no sale no fee" so I will at least get paid for all the wasted work.

Sole Practitioner Prejudice

2006-05-22T15:09:00.000Z

Do you wonder sometimes if conveyancers actually think about what they are doing or whether they see a supplemental enquiry raised by someone else and think "that looks good, I'll add that to mine" without further thought.The particular enquiry that springs to mind is aimed at sole practioners and is usually along the lines of:

In view of the case of Patel -v- Daybells (2000) please confirm that you are authorised by the mortgagee to receive the redemption funds on completion.

This enquiry was deemed neccessary as in the absence of such confirmation and in the event the sole practitoner absconded with the funds or for some other reason failed to redeem the mortgage the buyers' solicitors could be held liable in negligence.In the circumstances a reasonable enquiry. However in 2001 the case found its way to the Court of Appeal from the original 2000 decision of Gray J in the Queen's Bench Division and as a result of the appeal decision the supplemental enquiry is otiose.

I recently debated this point with a partner in a local firm of solicitors and despite referring her to the appeal decision she still insisted on me obtaining a letter from the Lender saying I was authorised to receive the redemption monies on their behalf. This was impossible as I was not on their panel, a fact already known to her. I invited her to redeem the mortgage directly with the Lender on completion and offered to send her a copy of the redemption statement which was how the matter resolved in the end although she still insisted on obtaining a letter from the Lender addressed to her firm saying they agreed that she could redeem the mortgage (this was after she had consulted with her senior partner).

This exchange of letters took some three weeks and caused extreme frustration to both sets of clients, Estate Agents etc. The same enquiry still appears on their additional enquiries.