This is a question that is frequently asked, and probably has been since medieval times (possibly an exaggeration).
Buyers get understandably annoyed when, having found the home of their dreams or at least one that they can afford, weeks and weeks go past before they can finally move in.
What do Conveyancing Solicitors do that takes all this time? Surely it should be possible in the twenty-first century for things to be done a bit quicker?
But the delays are not all down to Conveyancing Solicitors still working as if we were in the nineteenth century, and using quill pens. In fact most Solicitors are now well used to the latest in technology to speed things up for their clients.
In fact many attempts have been made to simplify Conveyancing, and generally speaking it can be much more straightforward than it was in the past. But unfortunately it seems that while some parts of the process have been made easier, other parts have got more complicated.
Making properties ‘tradable’
However one idea has recently been put forward is that properties should be ‘stamped’ as ‘ready to buy’ before being offered for sale. This would be in the form of a Legal Condition Report (LCR) to be provided by the seller.
The idea is that properties should be easily tradable. Therefore if a buyer knew that a property had a LCR they would be able to go ahead with their purchase without their Conveyancing Solicitor needing to check the title or carry out any searches.
This in itself is not a bad idea, but some will see it as merely an extended form of the Home Information Pack (HIP). HIPs were introduced in an attempt to make Conveyancing quicker and easier, but were very unpopular. They provided a standard pack of documents, such as a copy of the land registry title, an information form completed by the seller, and a local search.
Call us on 0800 038 6699 to find out how we can simplify your conveyancing process.
Why Home Information Packs didn’t work
Sellers had to pay for a HIP to be prepared before a property could be marketed. But a HIP did not guarantee that the seller had a good title, nor did it include any form of structural survey. So even when a HIP was available, a buyer still needed a Conveyancing Solicitor to check the title as well as a building survey.
It was usually necessary for the buyer’s Conveyancing Solicitor to have to make additional searches and enquiries, so little or no time was saved. Also HIPs did not help with leasehold flats (particularly common in London), since they did not have to include the information about service charges and building management which buyers invariably require for such properties.
HIPs were abolished shortly after the present government came to power, and there has not been any call for their re-introduction.
Would abolishing the caveat emptor rule help?
One of the reasons that Conveyancing is not a quick process is the rule of ‘Buyer beware’ (or caveat emptor as it was when lawyers used Latin phrases.) This means that it is up to the buyer, together with his or her Surveyor and Conveyancing Solicitor, to check everything out before completing a purchase.
In point of fact, checking a seller’s title, i.e. their legal ownership of the property, is not usually a time-consuming process. Property law was substantially simplified back in the 1920’s, and a system of title registration was introduced. This registration system has been expanded and improved, and most residential properties are now registered.
All that a seller’s Solicitor needs to do is to obtain a copy of the title – which can be downloaded in seconds – and send it to the buyer’s Conveyancing Solicitor. In some cases additional documents may be required to prove that the seller can transfer title, for instance if the registered owner has died and the seller is an executor, or where one owner has changed their name.
But while it is usually straightforward to check that the seller is entitled to sell, property titles often contain details of all sorts of matters affecting a property which a buyer will need to know about. For example, many homes are subject to restrictive covenants, which restrict the way the property can be used or prohibit further development.
Many homes have the benefit of various rights over neighbouring properties, such as a right of way, but may also be subject to similar rights which benefit adjoining houses. The buyer’s Conveyancing Solicitor will need to check that a property has any necessary rights, as well as advising on any adverse rights.
So while it might be easy enough for a LCR to include a guarantee of the seller’s title, it would also have to give the buyer a full explanation of all matters contained or referred to in the property register.
If any of this seems confusing, we’re here to help. Call us on 0800 038 6699 and we’ll talk you through the entire conveyancing process if you need us to. We are always happy to help clients simplify their conveyancing experience and make the process of buying or selling property a little easier.
Buyers still need to have a property title checked
Another argument in favour of having the buyer’s Conveyancing Solicitor check the title each time is that sometimes mistakes or problems are discovered. For instance the title plan may not show the correct area of the land, or a house does not have a necessary legal right of way. Although such problems are not frequent, when they do occur they could have a significant effect on a property’s value.
Putting the onus on the seller to provide information about a property sounds a good idea. But sellers are expected to provide a lot of information about a property at present, and could be guilty of misrepresentation if they give false information.
The problem is that suing a seller after completion is a difficult and uncertain process, and will be of little use of the seller has used the purchase money to emigrate or can’t be traced.
Why Conveyancing searches may still be necessary
One of the main reasons for delays in Conveyancing at present is the need for buyers’ Conveyancing Solicitors to make all sorts of other searches and enquiries about the property. At one time it was only necessary to carry out a search with the local council, but nowadays it is often necessary to make separate searches about water and drainage, environmental matters, flood risk, and chancel repair liability.
The proponents of the Legal Condition Report scheme point out that a lot of the information derived from these searches will be on a ‘once and for all time’ basis – for example, if the road in front of the house is an adopted public highway, that won’t have changed when another person comes to buy the property.
This may be true, but some information does change from time to time. For instance the council might have produced plans for a new road scheme or parking restrictions which would affect the property, or the seller might have built a large extension which needed planning consent.
It is suggested that local councils could pass relevant information on to the land registry, so that it would be immediately available when a property was put on sale. In fact the registry is already piloting a scheme in conjunction with a few councils. But it is too soon to say whether this will prove possible, and who will pay for it.
Another point to consider is that enquiries may reveal that a seller has, say, built a large extension without getting planning permission or building regulation approval. This wouldn’t show up in the local search. Sellers may fob buyers off by saying ‘I spoke to someone at the council who said I didn’t need permission’ but if it turns out that consents should have been obtained, the buyer could find himself in difficulties with the council later on.
One of the major differences between buying a home and buying groceries or consumer goods is that homes are frequently bought from private sellers, rather than a shop or trading company. This means that legislation which protects buyers if goods are faulty or not up to specification does not apply when buying a home.
Title insurance may not be a solution
It is suggested that a Legal Condition Report would be a guarantee of a property’s title. But a guarantee is not much good unless it is backed up in some way. If you buy faulty goods you expect the shop to replace them or give you a refund. The manufacturer will probably also give a guarantee.
But unless you are buying a new home from a developer, homes generally do not come with any sort of guarantee.
Some people argue that it is quicker and easier to rely on some form of title insurance. This is common in some countries, especially those such as the USA which do not use our title registration system.
A variety of policies are available which provide cover against various contingencies which could arise in connection with a property purchase. For instance, rather than get a local search, it is possible to obtain a policy which will indemnify a buyer against any loss if something later crops up which would have been revealed on a proper search.
Such policies do help in many situations, and can usually be obtained very quickly. But it is important to note that they can only provide financial help, and then only if the buyer actually suffers a loss. In many cases a search would reveal something which might affect a buyer’s decision to purchase, but which would not affect the value of the property.
The other point is that many mortgage lenders do not accept such policies, or only accept them if their own lawyers confirm that they are acceptable. So a cash buyer can take a view as to whether they want a quick completion with search insurance or will wait for their Conveyancing Solicitor to do all the searches. But a buyer who needs a mortgage will have to abide by the lender’s requirements on searches.
Who will do the property survey?
Conveyancing is only part of the process of buying a home. A buyer with any sense will also want a property building survey carried out to make sure that the property does not have any defects.
As mentioned, the present rule is ‘buyer beware’ but even if that changed it is difficult to see sellers giving buyers a full run-down on all the building’s defects. Sellers would therefore have to commission their own survey, and make this available to buyers.
It was intended that such a survey would be part of the HIP scheme, but difficulties arose and it proved impractical. In particular mortgage lenders were unhappy about accepting a survey from someone else’s surveyor, and there were questions as to whether a surveyor would be liable to a third party.
One of the great advantages to buyers of having their own Conveyancing Solicitor vet the property title, and having their own Surveyor carry out a building survey, is that such professionals are backed by their own indemnity insurance.
Their work can also be vetted by regulatory bodies – in the case of Solicitors, the Solicitors Regulation Authority. Complaints can also be made to the Legal Ombudsman.
So if your professional adviser makes a mistake, you know who to sue. But if you accepted a guarantee from someone else, would you be protected?
It looks as if the LCR would be a glorified home information pack. Given the public opposition to HIPs, it is difficult to see that such a scheme would ever get enough support to become a reality. What we need are more initiatives to speed up the present way of working.
One way of doing this is for homeowners who are thinking of selling should talk to their Conveyancing Solicitor before putting the property on the market. The Conveyancing Solicitor can then check the title and get information from the seller so that a complete contract package can be despatched as soon as a buyer has been found.
Get a quote for simple, straightforward conveyancing from Homeward Legal by using our easy online quote generator.You don’t have to commit to buy, but can get an idea of costs and timescales, plus helpful info from our expert team.