No-one needs a customer survey to learn that people find moving house stressful.
However, as I’ve said before, no amount of Rimmell Angel Shimmer Peach Pie #531 lipstick is going give the conveyancing pig “the London look”.
The scale of the challenge is huge and unfortunately the primary solution of getting information up front, is, to quote Boris, “a bit like bringing a peashooter to a gunfight.”
As well as being underwhelming in scope, it introduces the potential of unintended consequences. Like in 1996 when AOL’s profanity filter blocked all users from Scunthorpe.
Solving the shortcomings of the conveyancing process, is, like the work itself, a little more tricky than many would have you believe.
The IUD drummer boys need a rest
Articles about conveyancing typically start with one premise. Whether it’s about accelerating the process or reducing fall-throughs, the Information Upfront Drum (IUD) gets wheeled out for a bang. Unfortunately, our data shows that although this offers some benefit like its intimate namesake, most of the trouble tends to be caused by people pulling out at the last minute.
When it was announced that portals had to include more information about a property, Union Jack flags were dug out and people started arranging street parties to celebrate. Sadly, when this turned out to be little more than “whether a property is leasehold” those flags were put away for a more worthy occasion. Although clients often swear blind that “share of freehold” means a flat is not leasehold, it’s a rare occasion indeed when they don’t realise they are buying a flat rather than a house.
When the discussion moves into more sophisticated areas such as revealing title restrictions, this can actually make things worse. This is because their impact ranges from vital to irrelevant. Ask any lawyer worth their salt about their importance and they will reply; “it depends” – the existence of a restriction in itself doesn’t mean it’s a problem.
Which raises a tricky issue.
Providing information upfront that a buyer perceives as negative can kill a deal, which is galling, especially if it turns out later to be irrelevant.
Which is not ideal.
Go on then – what’s the answer?
The combination of information up front and case management can be seen as Conveyancing 1.0, in the same way that static web pages from 20 years ago are now known as Web 1.0. Yes, a starting point but unrecognisable from the responsiveness and effectiveness of the Facebook and Instagram Web 2.0 generation.
What we actually need is Conveyancing 2.0.
This starts with analysing what lawyers actually do rather than focussing on the perceived problems.
This came to the fore last week in a discussion with a smart optical character recognition software supplier. We looked at a purchase transaction where we had asked “as property is subject to a party wall agreement – please supply this”. The agreement had been mentioned in the Property Information Form (PIF) but had not been included.
This is a classic conveyancing issue – on the surface administrative but legally complex. Before the IUD drummer starts warming up his sticks, yes, this information should have been provided in advance, but it wasn’t. We don’t know why, probably the seller had lost it. Yes, the sellers’ lawyer should have gone back to client before sending over the contract pack, but he didn’t. On the flip side, the buyer’s lawyer may have missed this altogether or misunderstood the potential risks.
Another question from the PIF was whether “the work done by flat 2 in the shared attic affected our property, flat 4?”. This required interpretation as we had to advise our client on the risks involved. If we did not, and there was a problem, then we would be negligent. The information had been made available upfront but required interpretation as it may actually have been irrelevant.
The technology we need to answer these questions is available today – it just needs people to analyse what is required and deploy it.
So where do we go from here?
It’s obvious that interpreting issues where property is concerned is complicated.
Whilst we welcome the developments currently underway, no-one should be under any illusion that they are the start of a long journey, and we should not underestimate the potential risks that these early forays will bring.
The good news is that a number of providers have approached us to help design their Conveyancing 2.0 solutions which is a definitely a step in the right direction.
Maybe it’s finally time to consign that Shimmering Peach to the bottom of the makeup bag where it belongs.
Peter Ambrose is founder of conveyancing specialist The Partnership.
I posted this elsewhere yesterday and applies here. The issue is people are seen simply as numbers and not as people. This is a people business. Here was my post on LinkedIn yesterday on this topic – see if you can work out what the issue is!
A LARGE conveyancer (cheap initial fee) [yesterday] asking my seller or buyer to pay an extra £235.Why?Because it may be less than 5 working days between exchange and completion and this fee is payable in order to ‘expedite’ between the two dates.This on a single sale property (yes leasehold) that has been ongoing for 5 months now and the conveyancers on both sides have been an absolute catalogue of errors.Pay cheap – pay twice!Both vendor and buyer are rueing the day they did not take my initial advice and use my recommended local Ashford, Kent conveyancers (and no – no referral fees).The world has moved on. The conveyancing process has not.Yesterday, a solicitor would not pass on documents they hold to facilitate exchange of contracts, because their secretary is off with Covid. They will only send when the secretary is back.Another of my eXp colleagues advised yesterday their sale is being held up, as the solicitor dictated a transcription but their secretary is off so all on hold till she comes back.You couldn’t make it up.Everyone, estate agents et al need to take a long hard look at themselves in the mirror.If people are just a number to you, get out of this industry.If people are at the centre – your Why – and helping them is the primary focus – great. The results if outstanding customer service will then follow.This property industry needs a ****** good shake!
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Just imagine if we all treated the sales and conveyancing process as a project.Imagine a project management system that all in the transaction can log into and where all of the relevant documents were uploaded onto it, as per standard project management tech out there for team working, and when someone needs that doc, they simply log in and download it – no need for asking one conveyancer to email it to another (oh I can’t my Secretary is off and I am too precious to do so).This is not rocket science – the new proposals asking for more upfront information is sticking a plaster on an arterial bleed – useless.Everyone should have one standard system they log into as a Project and it will fly through.And yes, I am a trained Project Manager.
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The answer is to communicate more and have a sense of urgency.
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I also agree with this – in progressing any goal, a target date is required and although we often place one on the Memorandum of Sale, it is ignored. It only works when target dates such as stamp duty deadlines are set and look how everyone worked then! As soon as the deadline goes, so does the urgency – we should all place our Clients at the centre of everything we do, and work as if there is a stamp duty deadline / clearing our desk before a holiday – in this way, people will move quicker – service levels will rise and then Clients will be happy to pay more for quality service. Less fall throughs and all save so much more money – 30 to 40% fall through rate is totally unacceptable in this day and age – the longer the process takes, the more likely it falls through.
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I couldn’t agree more. There are some fundamental floors in the process. Firstly, very little information is available up front, in particular, leasehold properties. Why oh why do we 7 weeks into a transaction hear ‘I’m still waiting for the management pack’. Managing agents are typically slow, unresponsive and unaccountable during a transaction. This pack, unavailable during a viewing or offer stage process, 9/10 times throws up several clauses no one knew about and either results in the sale aborting, or, you guessed it, a deed of variation. Deed of variation then needs to be agreed by both solicitors, by the managing agent and their 3rd party solicitor (who doesn’t want to look at it) Furthermore, try and put an agreed exchange date on a memo of sale – solicitor response ‘I couldn’t possibly give an expected exchange this early’. The combination of lack of up front information and the sort of fumbling through the dark and dealing with information as we get it is the catalyst to slow and unpredictable transactions. I don’t necessarily blame solicitors for their lack of commitment to dates, because the whole process is floored and I can see why they wouldn’t want to give a date when they have no idea what’s about to happen or be thrown up Serious shake up required in agency and conveyancing
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Sorry to be the one to point out that it is the agent who is responsible, prior to marketing, for bringing to the attention of any prospective buyer much of the information that is provided by a leasehold management pack, as well as anything else in the lease or on the title which might be relevant to any prospective buyer. Agents who fail to do this ARE the flaw in the process.
Paragraph 7k of the TPO Code of Practice:
In accordance with paragraph 5e, where the title is registered at HM Land Registry, you should seek to obtain title information to verify the tenure of the property.
• In regard to leasehold properties, in accordance with paragraph 4e, you must provide material information to the consumer so they can make an informed transactional decision. Material information in respect of the lease includes, but is not limited to, the following:
• Number of years remaining on the lease;
• Amount of ground rent and when payable, together with details of how this will increase over time, if applicable;
• Rent payable in the case of a shared ownership arrangement;
For leasehold, commonhold and freehold properties where the owner has a legal obligation to contribute towards the maintenance costs of a shared amenity, material information would include, but is not limited to the following:
• Amount of service charge, and when payable;
• Amount of any event fees, and when payable;
• Amount of reserve fund contribution and when payable (if not already included in other charges);
• Approximate total amount of reserve fund;
• Details of any event-related fees and charges payable under the lease that are triggered by certain circumstances or events;
• Details of any other fees / charges contained in the lease,commonhold community statement or title deeds.
For all properties, material information would include, but is not limited to the following;
• Details of any unusual restrictions or covenants affecting the use and enjoyment of the property.
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You forgot to include an important part of 7k:
“You must take all reasonable precautions and exercise all due diligence by asking the seller to declare such information in writing (see paragraph 4e and/or via the completion of a property information questionnaire signed by the seller). Where you have doubt or information is missing you should ask further relevant questions of the seller. If all reasonable enquiries with the seller have been carried out and certain information is still unavailable, the fact that the information is unknown should be clearly disclosed to buyers, to enable them to make an informed transactional decision.” [emphasis added]
It is not for the agent to obtain a management pack, or to have the technical knowledge to interpret and advise on the contents of a lease, including any covenants, etc. That is the job of a conveyancer.
However, I wholeheartedly agree that sellers should be encouraged to be ‘sale ready’ at the point they come to market.
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I don’t disagree with your sentiment, however the reality is very different. Prior to marketing we obtain all lease information from land registry, aim to speak to the managing agent for information alongside any information the vendor has from their purchase. However, if a ‘pre-sales’ pack was available, which it isn’t, or if it was a requirement for leasehold sales for the management pack to be ordered prior to marketing, that would help endlessly. The majority of points you have raised are easy to obtain and are now legally required on marketing (lease length, service charge, ground rent etc), however there are elements of the lease and management pack that go above and beyond the several points you listed, that are pertinent to a transaction. And to clarify, a management pack is not available prior to marketing so it is not solely the responsibly of the agent, however I wouldn’t be against the idea. I would welcome a change in the law where sales packs of sorts are required for sale, much like an EPC which would undoubtedly help both agents and conveyancers post memorandum and increase both efficiency and success rates.
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There are things that can improve this.
1. Get Contract pack inc info to answer 99% of enquiries done before launching to market. (The Government recommend this in their how to sell guides)
2. Stop buyers viewing that do not have a strict MAIP with proof of all funds.
3. Make Reservation Agreements law (The Government recommend this in their how to sell guides)
4. Reduce conveyancing time by regulation (Conveyancer’s receive an email and respond a week later)
5. No chains like the Australian way. In Australia the exchange is 30 days on average after sale agreed – the draft contract pack is available before viewings.
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We do numbers 1,2 & 3 already
any agent can
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Good Article Peter. The drive for upfront information is a step in the right direction, but is hamstrung by the fact that to be truly effective it needs a conveyancer to actually review them. If that takes 2 months then no-one is better off.
The examples cited above demonstrate there are more systemic behavioural issues which need addressing.
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