Law Society faces no confidence vote over changes to ‘Material Information’ forms

The row between the Property Lawyers Action Group (PLAG) and the Law Society over property information forms which have been redesigned to support NTS guidance on ‘Material Information’ in property sale listings intensified this week.

PLAG is disappointed with The Law Society’s decision to release a new TA6 property information form in March that supports National Trading Standards material information guidance to third-party suppliers.

PLAG insists that the changes, which had been made by the Law Society without consultation, should have been discussed with licenced conveyancers.

In accordance with The Law Society Bye-Laws, the PLAG has now initiated the procedure for a Special General Meeting (SGM) for the purposes of holding a vote of no confidence in the Law Society CEO Ian Jeffery, and President Nick Emmerson.

Some 100 signatures are required from solicitors to call for the SGM. Thereafter, there will be a further vote to determine the motion as set out in Appendix B of the requisition.

The updated form includes the information the National Trading Standards Estate and Letting Agency Team (NTSELAT) says should be disclosed on property listings in its material information in property listings (sales) guidance.

This guidance was designed to help estate agents comply with the Consumer Protection from Unfair Trading Regulations 2008 by putting key information about a property in marketing materials, so consumers can make better informed decisions when looking for a property to buy.

It stated:

NTSELAT guidance advises sellers to contact their solicitor at an early stage.

They may therefore ask for help to complete a TA6 Property Information Form earlier in the process, so more information about the property can be used for marketing.

The aim is to make sure buyers know more about what they are buying. It is hoped this will reduce the likelihood of the sale and purchase falling through at a later stage.

About the changes

The fifth edition of the TA6 Property Information Form is published as a single form in two parts:

Part 1 provides the material information needed by estate agents to market a property. Some of this information will also be used by solicitors and conveyancers in the conveyancing process

Part 2 asks supplementary questions, providing additional information that may be required for the conveyancing process

The TA6 Property Information Form changes include:

property details: including the unique property reference number (UPRN) and council tax band of the property
tenure, ownership and charges: whether the property is freehold, leasehold, shared ownership or commonhold; and details of the costs, such as ground rent and service charges
parking: including the cost of parking permits and whether the property has electric vehicle (EV) charging

+ building safety: providing details of any defects or hazards at the property and whether essential works have been recommended and carried out

+ restrictive covenants that affect the use of the property

+ flood risk and coastal erosion: to establish what the flood risk is for the area around the property, whether any defences have been installed,

+ and if the property is near the coast, whether there is any known risk of coastal erosion

+ accessibility: the adaptations or features that have been made to provide easier access to, and within, the property coalfield or mining area: identifying if the property is impacted by any past or present mining activity

+ solar panels: providing details about the installation that a buyer or lender will need to know

+ Services connected: these now include air and ground heat pumps

+ drainage and sewerage: additional questions about where the sewerage system discharges to and whether it has an infiltration system

+ Japanese knotweed: refinement of the question to incorporate the area adjacent to or abutting the property

+ The TA6 explanatory notes for sellers and buyers and the TA7 Leasehold Information Form have also been updated.

As the TA6 now includes enquiries about the type of leasehold property and the ground rent that is payable as part of the disclosure of material information, these questions have been omitted from the updated TA7 Leasehold Information Form.

Earlier contact between sellers and their solicitors may provide an opportunity to address any issues (such as title or lease length) that may create delays with the sale.

We hope that the TA6 will help facilitate the flow of information from marketing a property through to the legal process.

The aim is that having better informed buyers could help reduce both the time the process takes and the number of sales that fall through.

Using the updated forms
The forms have only been released to our suppliers, who will be updating their systems in the next few weeks.

They may not be available to use until the work to implement them has been completed.

See a list of licensed and authorised suppliers

The updated TA6 and TA7 forms may be used from whenever your supplier can make them available to you.

Conveyancing Quality Scheme (CQS) firms need to start using the new forms by Tuesday 25 June 2024 at the latest.

 

A statement supporting the requisition has also been prepared and is available for review. See below:

 

Statement in support of the Requisition of even date for a Special General Meeting

Definitions

Requisition the requisition issued by the Member of even date.

Statement this statement made by the Member in support of the Requisition.

PLAG The Property Lawyers Action Group.

HBSC Home Buying & Selling Council

DPMSG Digital Property Market Steering Group

Interpretation

Words commencing with a capital letter shall have the meaning ascribed to them in the Requisition.

Statement in Support of Requisition

The Member makes the Statement.

Standing of Solicitors

Since the Legal Services 2007 Act (Act) an emasculated Society has stood back, as successive governments have run down the various branches of once respected civil and criminal legal systems, thereby diminishing both the rule of law and the role played by solicitors.

PLAG

PLAG, a values-based organisation, came into existence last year because of the failure by the Society to defend the vital role of solicitors in conveyancing. At the heart of PLAG’s concerns was the idea, blindly accepted by the Society, of sellers being required to provide ‘Material Information” (MI) before a property was listed for sale.

MI

There are significant doubts concerning the lawfulness of the guidance issued by National Trading  Standards (NTS) regarding MI because of a lack of legal capacity on the part of the NTS.

MI is a bundle of data, a legal title, searches, and other material, including answers to a questionnaire, which masquerades as a ‘single source of truth’.

Some MI Flashpoints

+ Companies are already emerging to provide MI. Are such companies exposing the public to unnecessary liabilities?

+ It is naïve to suppose that because of MI potential sellers will necessarily go to their solicitors first, to get help on the TA6.

+ Complex litigation could arise if an agent was sued for negligence and sought an indemnity from a solicitor, especially if the data was fragmented, because of the different ‘actors’ in the process.

+ The conveyancing system under MI changes fundamentally. Instead of interrogation by a buyer’s lawyer of carefully verified replies given by the seller/seller’s lawyers to enquiries, there would be a single pack of potentially flawed data.

+ The TA6 will significantly increase the risk of claims for ‘innocent’ misrepresentation.

+ MI means that a seller, would find it much more difficult to defend a claim under The Misrepresentation Act 1967, if the buyer was claiming the seller had made a misrepresentation, even if made innocently.

+ MI represents in its effect, a re-engineering of conveyancing ‘by the back door.’

+ Because of MI there will be more claims for ‘contractual’ misrepresentation because a buyer does not have to prove ‘reliance’

Criminalisation of replies to enquiries

Current consumer protection laws (CPRs) make estate agents, solicitors, and sellers criminally liable for an ‘unfair commercial practice,’ a ‘misleading action,’ or a misleading omission, a point made by the Society itself in its ‘Practice Note’ on CPRs (Practice Note). Curiously, however, many solicitors are not aware of the existence of the Practice Note.

Despite strict liability for such criminal offences, astonishingly the Law Society appears to have accepted the principle of even higher levels of criminal liability being imposed on solicitors and some sellers merely by giving incorrect replies in the poorly drafted and over-long TA6 form.

Even non-solicitors see this form as part of a ‘reincarnation’ of the infamous ‘HIPS’ that discouraged sellers from marketing their properties and was rightly repealed by the Minister, Eric Pickles, in May 2010 to protect the property market.

Recent Actions by the Society

PLAG considers that the Society has many questions to answer including:

1/ Who authorised the Society to enter membership of HBSG?

2/ Who authorised the Society to enter membership of the DPMSG?

3/ Did the Society take appropriate external advice on whether NTS had the ‘vires’ to issue its MI guidance to estate agents?

4/ In light of comments made by other members of HBSG by what authority did the Society agree to an apparent dilution of the future role of property solicitors in conveyancing?

5/ When did the Practice Note on CPRs first appear on the Law Society website?

6/ When was the Practice Note published in the LSG?

Criticisms of the Society

The Society received warnings of the vastly increased  risk of criminal offences being committed because of MI but despite such advice, it gave no advance warning to the profession, so that solicitors could put in place appropriate safeguards, to protect themselves. Furthermore, the Society has, to quote the vernacular, ‘doubled down on its belief in MI, despite being advised of the increase in criminal liability for its members. This is extraordinary.

The ‘criminalisation’ of conveyancing undertaken by solicitors could be the start of the criminalisation of other areas of legal practice if the Society fails to change course.

PLAG is aware of other non-solicitor groups taking legal action in respect of MI, which makes the Society’s failure to protect solicitors even more difficult to comprehend.

The Director of Strategy of the CLC has recently written that in effect, solicitors must in the future share ‘sovereignty’ over conveyancing. He also claimed that:

“DPMSG is best placed to identify what information is needed throughout the process.”

Why did the Society concur as a member of such a group that undermining  the solicitors’ historic leading role in conveyancing was consistent with its core duty to support those of its members practising property law?

Solicitors and their predecessors have been at the forefront of conveyancing for centuries based on principles first mentioned in Magna Carta. The recent actions of the Society in the context of conveyancing represent a betrayal of its obligations to property solicitors. So, the confidence which ought to be there in the leadership of the Society no longer exists amongst its members.

This is why the Member calls on the Council to consider the Motion.

 

Material information included in new property form

 

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One Comment

  1. ColinMcWilliams

    A slight correction to the article, the main objection here is that TLS did not consult with their own members i.e solicitors on the 5th edition of the TA6 before implementing it. They now admit that they ought to have done so.

    We (PLAG) did make the point about lack of consultation with licensed conveyancers, and for some reason this is the objection that the Gazette focused on, but it was really a secondary criticism.

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