The Government’s reaction to its Call for Evidence into improving the home buying and selling process is commendable but will this impetus ever be put into practice?
At least the (latest) new housing minister appears intent on establishing agreements between buyers and sellers – something that my own firm, Gazeal, was actually established to do.
The Government seems all for providing as much information as up front as possible to ensure that the property is ‘exchange ready’.
It is calling for the speedy provision of searches and the voluntary use of reservation agreements wherever possible. Voluntary agreements would be where both parties contribute deposits to ‘tie them in’ after an offer is agreed.
However, there is as yet little detail on the Government’s proposals, and that will be key – specifically, how can a reservation agreement have any teeth, while the current legal position is that the buyer must satisfy themsevles as to the veracity of the property’s title?
So what will happen to the buyer’s deposit if he or she is not happy with title or if that title is faulty? Will buyers be entitled to their money back and if so does a reservation agreement provide any benefit to the seller?
If buyers are not entitled to a refund, then will they really hand over a deposit that one must assume to be many thousands of pounds before they have been fully advised on that title? One cannot imagine so.
Therefore, what are the benefits of reservation agreements?
One solution is to establish a process by which the title is insured against it being faulty, so that a transaction can proceed.
I do suggest that the Government implements reservation agreements but they must eventually become a regulated activity for them to work properly. At this stage the intention is that they should not be mandatory but, as I have said, must be backed by an insurance product to ensure the title is not faulty.
The Government is also suggesting estate agents need professional qualifications and continuing professional education. One assumes that the consequences of this have been thought through.
The Government does not seem to think so, but it must surely imply mandatory membership of a professional organisation– one that is competent to train, set examinations, mark them and license members.
This is a huge undertaking, and must surely be rolled out over time,
We also note the Government’s commitment to expand and provide greater funding for the National Trading Standards Agency Team.
Agents should by now getting used to the implications of the Money Laundering Regulations 2017 – however we have our doubts about this. One thing is certain: the future is a lot more regulation than currently exists, with a lot more oversight by regulators with a lot more teeth.
Comments (3)
TOZ4 – agree with you re: Gazeal. It hasn’t flown and won’t fly.
Re: Home Imformation Packs, the vendor survey never happened. Unfortunately, HIPS became very political, with lots of vested interests at stake, and Eric Pickles, on assuming office threw the baby out with the bath water, even though elements of the HIP were having a positive impact by then, eg: searches in place, registered title available, exchange ready packs being developed.
Pickles and co didn’t listen to feedback from an expert panel then – and if they are not going to mandate changes, its not going to be any different this time around ….
Why are people with absolutely no, or very liitle, experince with house conveyancing charged with introducing legislation to speed up the sale/purchase of property. The last attempt – The home information pack. What a load of rubbish! What buyer, in their right mind, would accept a vendor’s survey?
In my opinion, before a property is offered for sale, the onus should be on the vendor’s legal rep to provide: a current local search and the answers to the enquiries that the purchaser’s solicitor is going to ask for, particularly where a leasehold is involved, which could mean contacting the freeholder for a deed of variation or to confirm the cost of a lease extention/renewal or a right of way issue ect and freeholders are renown for being very slow to respond. The vendor should provide copies of any planning consents and or building regs certificates for improvements or building works completed during their ownership and any existing indemnity policies rather than being asked for them further down the road, which will highlight the need for any indemnity insurance. Mortgagors’ should be forced to fully administer an application for finance prior to the purchaser finding a suitable property and issue a formal mortgage offer subject to their valuation. Any documentation that expires whilst marketing or searching will simply have to be renewed.
With this change in procedure the purchaser’s legal rep will have everything for approval, including a contract, day one and can advise the purchaser accordingly. Exchange of contracts subject to survey takes place once a price has been agreed. The purchaser can then instruct a surveyor and the lender instruct a valuation. The price can be renegotiated to combat an adverse survey or valuation.
How does this cater for chains? It doesnt as chains are a big part of the problem. Useless solicitors will only delay properties being offered for sale and half hearted vendors will be weeded out.
When government ministers and their appointed agents wake up and begin to understand what actually delays the sale and purchace of property these changes will be implamented.
Just checked out Gazeal web site. Exchange on varification of title must be subject to all of the above. The transaction can still take forever with useless solicitors, mortgage application, slow freeholders, provision of documentation blah blah blah and the transaction can still fall out of bed over adverse information discovered further down the road. Gazeal won’t fly. Sorry.
Its all just words from the government just to appease a generation of voters. I highly doubt much of this “regulation” will ever take place, as there are many more pressing issues facing government over the next few years. As for mandatory membership of a professional organisation, what is the point of this? It is not mandatory but what benefit have member of the NAEA got over the last few years? Sweet FA that is what?