We believe weâ€™ve reached a certain tipping point when it comes to the process we use, the pressures it places on practitioners and all stakeholders, and the ability of firms to make the most of this, especially working in a society which wants everything done yesterday Eddie Goldsmith
Conveyancing: Modernising to meet expectations
Conveyancing Supplement 2017
ENERGY & INFRASTRUCTURE
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Land Registry boundaries ensure highly accurate results Concise (approximately 10 pages) and easy to understand Passed searches for residential properties come with protection for Contaminated Land Remediation for 6 years and up to £100,000 Advice on next steps from a Chartered Environmental Surveyor Compliant with Law Society practice notes FCI is regulated by the RICS For more information, visit: www.futureclimateinfo.com, call: +44 1279 798 111 or email: firstname.lastname@example.org
WELCOME he speed and volume of conveyancing transactions makes conveyancing one of the most accessed legal services, yet it is also one of the most unique. The majority of people would hope to never need to hire a probate or criminal solicitor, and the nature of these services means they are likely to be needed by a client when they are at their most distressed. But getting a new home is a milestone moment for a person or family, and for many is the realisation of a dream.
Housing and Planning Minister Gavin Barwell said:
This means it’s important to try to make sure the conveyancing process provides a positive experience for the client. While there are bound to be mistakes and frustrations in high volume work, speaking to the many contributors in this supplement, including proud sponsor Future Climate Info, revealed several recurring themes in the grievances consumers have with the home buying process. These themes will be evident throughout these pages, but of course the housing market is only as good as the government regulating it. Modern Law asked Housing and Planning Minister Gavin Barwell for a statement on the government’s aims for the housing market to help introduce this Conveyancing Supplement, and I hope you will find the supplement informative and enjoyable.
Brendan Gurrie, Editor, Modern Law Magazine. 01765 600909 | @ModernBrendan | email@example.com
“This Government is setting out lasting reforms that will get more of the right homes built in the right places. Our Housing White Paper sets out that we need to do better, and that means tackling the failures at every point in the system. “We know there is more to do, and that’s why we’re investing more than £25bn in housing and have the largest affordable housing programme of any government since the 1970s. Our newly expanded affordable housing programme has been turbo-charged by more than £7bn to build around 225,000 affordable homes in this Parliament. This will allow housing associations to build more homes in places where they are most needed, particularly for those who are just about managing. “We’ve already helped more than 360,000 people buy through Government-backed homeownership schemes and we’re committed to help make the dream of home ownership a reality for everyone. The schemes have helped first time buyers through a range of measures – save for a deposit, buy with a smaller deposit, buy at 20% below the market price, buy the home they are renting from a social landlord, buy a share of a home or save a deposit while paying a below market rent. In April this year the new Lifetime ISA will offer support to younger adults to save flexibly for the long term, giving them a 25% bonus on up to £4,000 of savings a year towards the purchase of their first home. “We owe it to our children and our grandchildren to fix the broken housing market problems, and help them find a home of their own.“
06 Eddie Goldsmith
Following the Conveyancing Association’s publication of a White Paper on ‘Modernising the Home Moving Process’, Eddie Goldsmith talked to Modern Law about the evolving landscape of conveyancing and how conveyancers can prepare for the challenges and opportunities brought about by technological advancements.
10 Geoff Offen
Editorial Assistant Liam Lambert
Project Manager John Margett
Events Sales Kate McKittrick
Edward Donne of specialist Professional Indemnity Insurance (PII) broker Howden sets out his views regarding the current relationship between Conveyancers and the PII market. He examines the most common causes of claims and provides guidance on how to avoid them.
26 Are you ready to work smarter?
Editor Brendan Gurrie
Gareth Richards believes the next twelve months will bring exciting opportunities to the conveyancing market. He discusses what conveyancers need to do to make sure they can fully embrace these changes.
24 There won’t always be an ambulance at the bottom
Property is potentially a very profitable target for fraudsters, so stakeholders need to be vigilant in order to protect themselves. Alasdair Lewis discusses how the Land Registry defends against fraud and how technology will continue to play an important role in combating fraud.
Looking ahead to a post-Brexit climate, Patrick Lawler explains the dangers caused by poor air quality, how it can be combated and how poor air quality affects the conveyancing process.
22 The Conveyancing Industry 2017 – Is the glass half full?
Modern Law asked Geoff Offen, Managing Director of Future Climate Info (FCI), about the effects of technology on conveyancing and what conveyancers can do to improve their services for consumers in light of emerging risks and challenges.
14 Alasdair Lewis
20 Should Environmental Due Diligence Include Air Quality?
Andrew Lloyd explains why 2016 was a good year for the conveyancing market, and how it can keep up this momentum to make the next year even better.
28 Local Searches – What a transaction wants?
Stephen Murray, Business Development Director, PSG.
30 Case Study
That sinking feeling - The Ripon sinkhole
Conveyancing Supplement 03
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We believe weâ€™ve reached a certain tipping point when it comes to the process we use, the pressures it places on practitioners and all stakeholders, and the ability of firms to make the most of this, especially working in a society which wants everything done yesterday
Eddie Goldsmith Following the Conveyancing Association’s publication of a White Paper on ‘Modernising the Home Moving Process’, Eddie Goldsmith talked to Modern Law about the evolving landscape of conveyancing and how conveyancers can prepare for the challenges and opportunities brought about by technological advancements.
What are the biggest challenges currently facing conveyancers?
Where do you start? They are many and varied. Last year, the CA went on the record as saying this was a pivotal moment for the conveyancing sector simply because of the number of forces at play, and the fact that we believe we’ve reached a certain tipping point when it comes to the process we use, the pressures it places on practitioners and all stakeholders, and the ability of firms to make the most of this, especially working in a society that wants everything done yesterday. Now, this isn’t to say that conveyancers can’t work within such an environment, make the best of it and still deliver strong service levels and meet targets, but it’s certainly not ideal. We would much rather have a system and process which is much tighter, makes far better use of the technology available, allows us to work effectively from a running start rather than being slow off the blocks, cuts down on unnecessary duplication of work, has a much better communication process between all stakeholders, and so on. It’s important that conveyancers themselves recognise the shortcomings within that process, but perhaps also within their own firms. This, fundamentally, was the aim of our White Paper on ‘Modernising the Home Moving Process’. It was to look at what we currently have, to look at other jurisdictions to see how their process works, to see if we couldn’t come up with a series of tangible changes and actions that the CA could help implement in order to take away many of the problems we face. Having published that White Paper, and debated it at our Annual Conference, we’re about to go to our Management Committee with a suggested Action/Objectives Plan that picks up on many of the themes from the White Paper and outlines what we believe needs to change, and how we’re going to go about delivering on this. Some of our ambitions are not going to happen overnight; they are going to take time and will need a lot of support and engagement from our members, affiliates, organisations like the Land Registry, and of course the Government. However, just because the journey may take longer to get there, we didn’t want to simply leave them out as we feel they are worthwhile in pursuing. Conversely, we have a number of plans and actions that we believe can be delivered in a timely manner and we can and will prioritise those. As we speak, we’re about to present those strategic aims and plans to our Management Committee and from there we’ll be publishing them, outlining the priorities and timeline for delivery.
In terms of the housing market, we’ve seen a marked drop in transactions, particularly since the introduction of the additional homes stamp duty charge, and this is clearly having an impact on the instructions our members have received. Again, we’ve publically urged the Government to drop this additional 3% charge as we believe it’s negatively impacting on the sector, particularly in terms of landlords purchasing and adding to portfolios. Having said that, the latest figures appear to show increased revenue for the Treasury coffers from this and therefore, at least for now, we’re not anticipating a u-turn in this area. But this doesn’t mean it shouldn’t be scrapped. I think we would all be rather naive if we weren’t considering the impact of Brexit on our economy and in turn the housing market. There are still far too many unknowables and uncertainties around this, but it’s obviously on the horizon and we must plan and prepare for any eventuality.
How has the number of solicitors specialising in conveyancing changed in recent years, and to what do you attribute this?
We want members who are ‘serious about conveyancing’ and, if you look at our member firms, it would be obvious that they fit into this category. What we now have is a split between the large conveyancing specialists who are carrying out significant business numbers, the medium-sized operators and then a lot of firms who may only be doing a handful of cases. Over the years the number of firms within that latter grouping has been coming down and we are moving from a cottage industry to a much more specialist sector.
We’ve also pressed, for example, for better communication between conveyancers and lenders, in order to reduce post-offer queries that have historically taken up so much time and, to our mind, are not necessary in many cases Conveyancing Supplement 07
I think we would all be rather naive if we weren’t considering the impact of Brexit on our economy and in turn the housing market I think you have to attribute this change to the evolving nature of the conveyancing process, the experience and skills required, the needs of consumers who want to deal with specialists, and a move away from work if it’s not a major part of their service offering. All this points towards specialist operators.
How could communication between the parties involved in a property transaction be strengthened?
Communication and transparency of communication is a major part of our White Paper, and that extends to communication across all parties, not just between the conveyancer and their client. Traditionally, I think we’d have to hold our hands up and say that communication has not been a strength, and this has led to frustration amongst all parties. What we’ve tried to enshrine at the CA is a focus on keeping everyone informed and a commitment to doing this at regular points during the process. We’ve also pressed, for example, for better communication between conveyancers and lenders, in order to reduce post-offer queries that have historically taken up so much time and, to our mind, are not necessary in many cases. How much time do conveyancers spend on hold waiting to speak to lenders? Part of our drive is around getting rid of unnecessary queries that hold up the entire process and drive everyone to distraction. I’m pleased to say we’ve made some major progress with lenders in this regard, and we’ve seen those levels of enquiries drop significantly.
Are conveyancers doing enough to provide clients with the information they need, in a quick and transparent manner?
On the whole they are, but that’s not to say we couldn’t all be far better at this. Again, the White Paper is all about looking at ways and means; methods and technologies, for instance, that speed up the process but don’t leave us all open to fraud, or doesn’t mean that important information sits in an email account unread. There are systems available which can ‘nudge’ clients in terms of information they’ve not read, or signed, documents they’ve not sent through, and all other kinds of requirements, and we’re looking at adding all this into the process in order to speed things up.
Would a pre-contract document pack give clients the information they require at the speed they expect, and ultimately improve the home-buying process?
One key thing to come out of our Annual Conference at the end of 2016 was a pretty resounding belief that the upfront provision of information can only aid us in the process and can
In terms of the housing market, we’ve seen a marked drop in transactions, particularly since the introduction of the additional homes stamp duty charge, and this is clearly having an impact on the instructions our members have received 08 Conveyancing Supplement
certainly help consumers make their minds up about a property, ensure they know what is required of them and get the ball rolling far quicker. That upfront information has to be comprehensive though, and you’ll hear many people talk about the downfall of HIPs, mainly because the information within them wasn’t particularly helpful. Our preference is for an E-home report and utilising the technology available, having the necessary reports and documentation available at the start of the process so that the purchaser is exposed to any issues much earlier.
What issues do leasehold properties present to the conveyancing market?
Our session on this at the conference was entitled, ‘We all know leasehold is a nightmare...’ so you’ll get an idea of how conveyancers view leasehold. At present, there is a lot of press around leasehold, mainly focused on new-build leasehold, doubling of ground rents, and fees being charged by the freeholder for services either not provided or way out of kilter with what they actually cost. Our focus has been on the leasehold transaction itself, and reducing the cost and delay within it. We’ve been very vocal about the role of Lease Administrators in all of this. The fees they can charge for the provision of very simple documents can be extortionate, plus they can then take an absolute age to get them back to you. It’s no wonder that leasehold transactions take, on average, four to six weeks longer to complete than freehold. There’s really no need for this to be the case, and there is no register of lease administrators so it can take ages to even find out who they are. Then when they charge these fees, there’s no form of redress in terms of the client being able to say these fees are unwarranted and unjustifiable. In some parts of the country (notably London) there are more leaseholds than freeholds. The good news is that the Government appear to be fully behind change and fairness. The recently-published Housing White Paper gives a commitment to consult on fairer terms, etc. and there is a growing All-Party Parliamentary Group on leasehold and commonhold that has been incredibly effective, with the support and expertise of the CA feeding in to it.
How has electronic conveyancing evolved in the past few years, and how do you predict it will change in the future?
Again, without wishing to pre-empt what we’ll be announcing soon, there is clearly an opportunity to utilise technology to help speed up the process and to allow future transactions of the same property to start from a point much further towards exchange/ completion. We’re not wanting to create a Veyo here, but we do want to create a secure communications platform and we want to join up new and existing systems in order to create integrations, and have a much more digitally-focused, efficient system.
How can conveyancers mitigate the ever-growing risk of cybercrime and fraud?
This fits firmly into the ‘challenges’ bracket and is an ongoing one for all conveyancing firms, and one that has been a major focus for the CA for some time. We’ve recently published an updated version of our Cyberfraud and Fraud Protocol and it’s been pleasing to see more of our members achieving the ‘Cyber Safe Scheme’ accreditation, which shows they’re doing all they can to reduce their (and their clients’) exposure to fraud.
We’ve looked at Scotland, the USA, Australia and Denmark to review how things work there and how parts of their process might translate into the England and Wales system We obviously have to accept that the conveyancing process is going to be a target for fraudsters because of the sums involved. However, most of the attempts are pretty unsophisticated and involve the hacking of email accounts, with the fraudster passing themselves off as the client’s conveyancer, asking them to send money to a different bank account. That’s not the only method used, but it is perhaps the most common. We’re urging firms to educate their clients about this threat, telling them to be vigilant, telling them not to go on social media and ‘shout’ about their offer that’s been accepted and/or their impending exchange, and to also know that the firm will never change their bank account details. Plus of course to send the smallest amount of money first and checking it’s arrived, before sending the fuller amount. Taking these precautions would cut down on a lot of the ‘successful’ fraud attempts, and ensuring all virus and malware software is up to date, not using public WIFI, etc, can all help. We’ll continue to work and update our protocol and advice to firms and customers because one thing is certain: this threat is not going away.
Are there aspects of conveyancing practises outside of England and Wales that could be adopted to improve the UK conveyancing market?
Certainly, and within our White Paper we looked at those jurisdictions that are widely held to be successful and where perhaps we could learn a thing or two. So, we’ve looked at Scotland, the USA, Australia and Denmark to review how things work there and how parts of their process might translate into the England and Wales system. Our conclusion was that there were things to be learnt from those other jurisdictions - notably, delivering far greater certainty in the process earlier on, reducing stress, providing better upfront information, cost, transparency and the timing of mortgage finance, and that has certainly fed into our post-White Paper plans/objectives.
What are the aims of the Conveyancing Association in the year ahead?
Again, they are many and varied but clearly we’ll be focusing a lot on the White Paper objectives and our work on delivering those. This is tied up with our ongoing campaigns, which have been running for a number of years, such as our work on leasehold, combating fraud, consumer education, working with lenders, etc. The White Paper has been very warmly received and it’s allowing us to get our foot in the door with organisations, Government departments, MPs, etc, where previously we might not have.
Eddie Goldsmith Edward is a partner at Goldsmith Williams Solicitors based in Liverpool City Centre UK and founded Goldsmith Williams with Chris Williams in 1984. Goldsmith Williams is a partnership with a Board of Senior Management including the 3 proprietors, with currently 150 staff. The Firm is acknowledged as an expert in its chosen areas of service, providing specialist legal services nationwide to the mortgage broker and lending market. Edward was President of Liverpool Law Society in 2001, one of the largest Law Societies in England and Wales. His firm is a founder member of the Conveyancing Association and Edward is the current Chairman of the Association, which represents 50+ of the largest conveyancing firms in the country, who between them conduct over 20% of all conveyancing transactions in the UK. Goldsmith Williams are Founder Members of the Equity Release Solicitors Alliance, a specialist trade grouping for solicitors acting for Equity Release borrowers. Edward is married with 3 children with strong family ties to Australia. He is a long time supporter of Liverpool Football Club.
Of course, we also want to ensure we’re offering real value for our member firms and our Affiliate members, who are very supportive of the CA, and also provide considerable expertise and insight that we are drawing upon. As we mentioned earlier, this is a pivotal time for the CA. There is plenty to achieve and we’re just at the start of the journey. There’s a lot more to come from us in 2017 and beyond.
Conveyancing Supplement 09
Itâ€™s the information age. Consumers are used to getting more regularly available information, and theyâ€™re all increasingly aware that they need to have the right insight to make a well-informed purchase, with minimal delays and risks
Geoff Offen Modern Law asked Geoff Offen, Managing Director of Future Climate Info (FCI), about the effects of technology on conveyancing and what conveyancers can do to improve their services for consumers in light of emerging risks and challenges.
What challenges does the conveyancing sector face in 2017?
There is pressure on conveyancers through a number of areas. They’ve got increased oversight and new standards such as conveyancing quality schemes, and there’s more pressure on them to be reputable, trusted and qualified. At the same time, we have this very advanced technological age, with people wanting service faster and cheaper. For example, most of us use Amazon to do our shopping. Operationally, you can’t beat that. From the point of view of the customer, they’ve made it a positive shopping experience. In comparison, the conveyancing experience can be quite complex in certain situations. With so many different parties involved and lots of compliance boxes to tick, the level of risk quickly grows and can often lead to things that could go wrong. By meeting the customers’ growing demands for technological solutions, it is possible to move forward at a quicker pace, drive up standards, and provide more information in a precise, open and transparent way.
How do you feel that conveyancing is perceived by the public, and how can this image be improved?
Most people aren’t aware of what is involved in the process from the conveyancer’s perspective, and probably aren’t concerned with all of the things a lawyer does. For example, the homebuyer is making a largely emotional decision and they would value insight upfront to help them avoid the obvious pitfalls. It’s like buying anything else - you wouldn’t buy a product if you didn’t know whether there was a defect with it or not. With property, it could be the Title or an environmental search issue and identifying these early on will save time, money and disappointment.
use. They’re normally going on previous customer satisfaction, speed, whether they’re getting access to information quickly and transparently, whether it’s the best value in terms of better information and costs and whether it’s a user-friendly service. It is likely to become easier once technology is fully adopted and things get more streamlined through electronic conveyancing.
What can conveyancers do to help speed up the homebuying process for clients?
When you look at the whole process, and it’s a massive process, all parties involved need to work together to analyse and systematically cut any steps that don’t add value or replace them with a new refined process that works more efficiently and saves time. I think by introducing an earlier legal commitment in the process it will help to reduce or eliminate gazumping, strengthen the property chain, and introduce more certainty which will speed up the process. If I’m a buyer and I want to buy a house, and I make a decision at that point, I have to put my money where my mouth is. Buyers are reluctant to do that unless they’ve got good information to make that commitment on.
25% of properties on the market are leasehold properties, so if the government changed legislation in that area, they’d solve 25% of the problems
Since conveyancing is often a client’s first experience of legal services, do conveyancers do enough to help them understand the whole process?
They’re all trying. If you look through the legal services websites, they are very good at highlighting their competitive edge and outlining the processes involved in what they do. But none of the above things are points of measurement that consumers
Conveyancing Supplement 11
The effect of automating conveyancing will be to integrate and streamline the whole process, eliminating the many steps and blockages which just aren’t adding any value Whether it’s a residential or commercial property, if you are aware of the potential risks early on, like environmental risks, then you can make a well-informed decision on whether to continue with the transaction or not. It’s a case of finding the right mechanism so this useful information is available at the start of the transaction.
What should be the focus of the government in 2017 to improve the conveyancing market for conveyancers and their clients?
They’re already consulting with the legal professional bodies to improve the process. The government wants a more positive conveyancing process for the public, including banning ‘gazumping’, so their consultation should be widened to industry groups like the Conveyancing Association. Leasehold properties can cause real issues. I’ve had personal experience with this. My daughter bought a flat in London, got a mortgage offer back in February and completed in autumn. That’s because there was a delay with the lease administrator in negotiating an extension to the lease. Unreasonable delays like this can be big hurdles in the process. 25% of properties on the market are leasehold properties, so if the government changed legislation in that area, they’d solve up to 25% of the problems. That’s what they should focus on next year.
Are conveyancers utilising technology enough, and how could this be improved?
There is a growing number of companies advertising that they’re revolutionising the conveyancing experience, mostly by offering document handling technology and making information and process steps accessible on mobile and tablet devices. If conveyancers are able to use technology to offer secure platforms with password protection and anti-money laundering checks, then that’s going to benefit general business process for the conveyancers by making things more streamlined and cost effective. They’re starting to use cloud software platforms and mobile apps to show customer journeys, providing more transparency and giving the customer greater visibility so they can monitor the conveyancing process in real time. On the information side, you can now get searches with complete information and much easier to understand products. An obvious extension of that is to integrate different types of searches together and make them even more succinct, so that all of the information is contained within a single step. If you integrate that with your electronic conveyancing systems, the whole process becomes more efficient. In terms of electronic conveyancing, one of the immediate benefits is sharing information and avoiding duplication, in data input for example.
It has been suggested that conveyancing is going to be the first area of law to become fully automated. Do you agree with this, and what effect could automation have on conveyancing?
It’s going to happen, probably more than in any other part of the profession, but it’s not something that is instantly going to change.
12 Conveyancing Supplement
Conveyancing affects so many people at several different points in their lives and the current process can be convoluted, time consuming, expensive and stressful. Just by looking at simple economics, you can see there is a massive demand but a shortage of supply. The effect of automating conveyancing will be to integrate and streamline the whole process, eliminating the many steps and blockages which just aren’t adding any value. This will make things much better on the consumer in terms of speed, reliability, cost, transparency, and customer service. From a conveyancer point of view, it will eliminate the tedious and repetitive tasks, speed up the process, reduce the scope for errors and bring the focus back to customer service. The conveyancer is doing a good job under difficult circumstances, so the move to electronic conveyancing and digital information will create a happy, positive customer experience whilst increasing the value proposition for the conveyancer.
What are some of the current and emerging environmental risks that must be taken into consideration?
The current risks are addressed by the Law Society’s good practice guidance on contaminated land, flooding, and coal mining searches. These days every conveyancer is getting the environmental check done, following this guidance. There are good reasons for that; you’ve only got to look at flooding in 2015 in the winter period and the hardship caused. These things do have a big impact on value and the saleability of property. Those are the current risks to take into consideration. Emerging risks come on the energy and infrastructure side. If you look at Mexborough, for example, and the recent change to the route for HS2, where one moment you’ve got 200 houses being built and people having just completed on their house sale, then there’s an announcement that there’s going to be a high-speed railway built on their doorstep that they hadn’t bargained for. Having prior knowledge of those sorts of intentions would be very valuable. A lot of people are concerned about shale gas, and how that’s going to affect them. I wouldn’t say there were unfounded concerns about tremors and pollution from these operations, but the government wants gas to be extracted across the country; it’s good for the country from an economic and energy perspective, and the processes would be highly regulated. I think the risks compared to mining would be relatively small. But it’s something that consumers want to know – how are they going to find out about these things? These are all things that would be shown within an environmental report, highlighting the importance of carrying out a search on a property. Another one of the contemporary risks is air quality. You’ll have seen it in the national news recently; there is a strong association between poor air quality and health risks, which people are only just starting to wake up to. That data is starting to become available, so that’s one of the emerging issues.
What impact does fraud and cybercrime have on the conveyancing sector, and how can it be mitigated? It’s having a big impact. It’s on every agenda of every conference I go to. There are significant steps being taken by
The conveyancer is doing a good job under difficult circumstances, so the move to electronic conveyancing and digital information will create a happy, positive customer experience whilst increasing the value proposition for the conveyancer everybody, and they’re all taking it very seriously. The scope of fraud being committed throughout the various processes is quite large. It can be mitigated by having a properly integrated electronic conveyancing process, which is linking the Land Registry and SDLT with the conveyancers’ case management systems. If they’re all joined up and it’s secure and properly protected to the right standards, with verified identities, it’s bound to cut out the scope for fraud and cybercrime.
What’s next for Future Climate Info?
It’s the information age. Consumers are used to getting more regularly available information, and they’re all increasingly aware that they need to have the right insight to make a wellinformed purchase, with minimal delays and risks. Our whole focus, from launch, has been to provide information that is as complete as possible, in a clear, concise way that’s compliant with good practice guidance, with reliable risk assessments, constructive advice and fewer actions that cause delays to transactions. That’s not just to help conveyancers, but also to help their clients. In a short space of time, we’ve driven substantial changes in the market on how to present environmental risk information and unsurprisingly, throughout 2017 we’ll be focusing on more of the same.
Geoff Offen Geoff has 36 years’ experience innovating information publishing for conveyancing and re-engineering processes to make things faster, more refined and cost effective. He won a national award for his dedicated work to create the first automated coal mining searches, reducing turnaround times from 8 weeks to just seconds. Geoff also worked with the Law Society to standardise enquiries and create the coal mining search, CON29M. In 1998, Geoff became founding architect of the environmental searches used by conveyancers today. In 2014 he formed Future Climate Info, reinventing environmental searches to provide products suited to today’s conveyancers and their clients.
In December, we launched a new local amenity report called ‘What’s on My Doorstep’. It’s a way for conveyancers to add more value to attract clients, in addition to what they do normally. The report is designed to help the homebuyer gain a greater insight into a specific neighbourhood including local crime statistics, Ofsted school ratings and an array of useful information wrapped up in a handy report. It’s very cost effective, and it’s something that conveyancers can offer clients who haven’t checked that out beforehand. In January, we introduced a much more affordable range of contaminated land insurance products for FCI customers. If the environmental search discloses past land use that could leave a homeowner with the liability for cleaning up contaminated land, there’s an option of buying insurance to protect against that risk. And there’s still more to come.
Conveyancing Supplement 13
The opportunity to teach machines to do the work of humans will impact most industries and weâ€™re sure homebuying is no different
Alasdair Lewis Property is potentially a very profitable target for fraudsters, so stakeholders need to be vigilant in order to protect themselves. Alasdair Lewis discusses how the Land Registry defends against fraud and how technology will continue to play an important role in combating fraud.
What are the current forms of financial crime affecting the housing market?
Fraud is a huge problem and it’s getting bigger. According to the latest Annual Fraud Indicator, UK fraud losses last year could be £193 billion, equal to nearly £3,000 per head of population. The private sector is believed to have lost an estimated £144 billion and the public sector £37.5 billion. Mortgage fraud costs the lending industry an estimated £1 billion every year.
On average out of every 10,000 mortgage applications, 84 contain an element of attempted fraud; a typical mortgage fraud might involve the applicant misrepresenting their credit history or employment status. Attempted identity fraud too has been growing steadily over the past 10 years and is estimated to cost £5.4 billion. Land and property will always be an attractive target for fraudsters. A fraudster would need successfully to carry out a lot of credit card or benefit frauds to make a significant amount of money. However, when the average value of a property in the UK is more than £200,000, a fraudster does not need to “steal” many properties to generate a lot of cash. That is why we have such strong anti-fraud measures in place across the industry. At HM Land Registry, we normally only see those crimes that result in an application to change the land register that is based upon a forged deed. We receive millions of applications to change the register each year. We know the vast majority of these are entirely legitimate, but a tiny minority are made by fraudsters. They cause damage to HM Land Registry and distress to the victims and consequently we take the issue extremely seriously.
Are there particular kinds of home owners who are more vulnerable to fraud?
We have a dedicated counter-fraud team and have introduced new processes and technology in recent years. As a result of these actions, we have become more knowledgeable about the way fraudsters have targeted particular property groups. We have therefore been able to identify those groups where there can be an increased risk of fraud. As the case study below shows, property owners are more at risk if their property: • is rented out • is empty, for example if they are abroad or in a care home • is mortgage-free • is not registered with HM Land Registry.
Property owner, Minh To, received a call from his daughter asking why he was selling his house, as she’d seen it for sale on Rightmove. This surprised him as he had no intention of moving. It turned out the fraudsters had stolen post from his mailbox at the bottom of his drive in order to steal his identity. They forged his signature to transfer the house into their name before putting it on the market. They had targeted his home as he had no mortgage. Had Mr To been paying a mortgage, the fraudsters would have needed consent from his bank, making the fraud more complicated. Luckily, thanks to his daughter’s call, Mr To discovered the scam before the property was sold and contacted the police. The fraudsters have received a jail sentence.
What measures is HM Land Registry taking to combat fraud and crime in property transactions?
HM Land Registry is committed to combating fraud. Our counter-fraud strategy takes a multi-agency approach, which focuses on prevention, detection, protection and education. Our practice and policy is regularly reviewed and we utilise a range of measures to identify vulnerable properties and fraudulent applications to change the register. These include the development of our free Property Alert service, property restrictions, maximising data and digital capabilities, and continuing to develop external data sharing opportunities. The Land Register is open to public inspection to assist buying and selling of property and land. It helps combat fraud because of this transparency. If an innocent person is defrauded of their registered property, our state indemnity means they will usually be compensated for any resultant loss. Unlike an insurer, our liability is completely uncapped, and it is for this reason that we take registration fraud so seriously.
Government will consult on improving the transparency of contractual arrangements used to control land. Following consultation, any necessary legislation will be introduced at the earliest opportunity
Conveyancing Supplement 15
Our counter-fraud strategy takes a multi-agency approach, which focuses on prevention, detection, protection and education Nearly all of our larger indemnity claims and payments are the result of the registration of a fraudulent (forged) document. In 2015/16, we paid indemnity totalling just over £8 million. Nearly £6 million of that related to fraud.
How is HM Land Registry working with conveyancing and legal associations to tackle fraud?
The majority of property frauds are carried out before registration, which is why we work closely with stakeholders including the Law Society, Solicitors Regulation Authority, Council of Licensed Conveyancers, National Crime Agency and Financial Conduct Authority, as well as land registries in other countries to reduce the opportunities for fraud and identify and take corrective action when it has happened. For example: • we have enhanced our identity checks in cases where any party is unrepresented and we frequently remind solicitors that we rely on the checks they take to verify the identity of their clients • currently we are producing a new joint practice note for the Law Society following on from the 2010 issue which was well received by the conveyancing profession • we have delivered presentations to several law firms to increase their awareness of registered title fraud and will continue to work with conveyancing and legal associations to tackle fraud • we have a Memorandum of Understanding with the Solicitors Regulation Authority and work with other regulators in the financial and legal industries. While no system can eradicate fraud completely, since September 2009 we have prevented frauds on properties valued in excess of £92m.
What can be done to improve the education of consumers about fraud and financial crime, and where does this responsibility lie?
We all have a responsibility to fight fraud. HM Land Registry continually highlights the issue and how our customers can help themselves.
What advice do you offer to home owners? We actively promote the following advice to home owners:
• Ensure your property is registered with HM Land Registry so you can be compensated if you suffer financial loss from fraud. The vast majority of properties in England and Wales are registered. Those most likely to be unregistered are properties that have not changed ownership or been mortgaged since 1990. If your property isn’t registered then no compensation is payable. • Once registered, make sure your contact details are kept up-todate so HM Land Registry can contact you easily if we need to. You can have up to three addresses in the register, including an email address or an address abroad. • Sign up for HM Land Registry’s free Property Alert service, which helps owners to detect property fraud. HM Land Registry will send you an email alert when there is certain activity on the monitored property, such as if someone tries to take out a mortgage on it. If you receive an alert, you can judge whether the activity is suspicious and seek further advice – www.gov.uk/ property-alert. • Owners who feel their property might be at risk can have a restriction entered on their property which is designed to help prevent forgery by requiring a solicitor or conveyancer to certify
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they are satisfied that the person selling or mortgaging the property is the true owner. • There is no HM Land Registry fee for home owners to register this restriction as long as they do not live in the property they wish to protect https://www.gov.uk/government/publications/ restriction-by-owner-not-living-at-property-request-registrationrq. If you are living in your property and want to have a restriction on your property you can do so for a small fee of £40 https://www.gov.uk/government/publications/enter-arestriction-registration-rx1 • If you have property registered in a company name, you can request a free restriction. This is designed to help safeguard against forgery by requiring a conveyancer or solicitor to certify that they are satisfied the company transferring, leasing or mortgaging the property is the same company as the owner before any new sale, lease or mortgage is registered https:// www.gov.uk/government/publications/restriction-by-companyrequest-registration-rqco
Will digitisation of HM Land Registry lead to an increased risk of cybercrime, and how is this being mitigated?
As part of the national infrastructure, cyber security is high on our list of priorities and we ensure that all of our electronic services include the appropriate levels of security. We employ multiple layered security mechanisms that detect and defend attacks against our system.
How can the availability of data about wider interests in land be improved?
In the recently published Housing White Paper, Government proposes to improve the availability of data about wider interests in land. There are numerous ways of exercising control over land, short of ownership, such as through an option to purchase land or as a beneficiary of a restrictive covenant. There is a risk that because these agreements are not recorded in a way that is transparent to the public, local communities are unable to know who stands to benefit fully from a planning permission. They could also inhibit competition because small companies and other new entrants find it harder to acquire land. There is the additional risk that this land may sit in a ‘land bank’ once an option has been acquired without the prospect of development. Government will consult on improving the transparency of contractual arrangements used to control land. Following consultation, any necessary legislation will be introduced at the earliest opportunity. There will also be a consultation on how the land register can better reflect wider interests in land with the intention of providing a ‘clear line of sight’ across a piece of land setting out who owns, controls or has an interest in it. In support of Government’s intention to improve the availability of data about wider interests in land, we will be releasing, free of charge, our commercial and corporate ownership and overseas ownership data sets.
Unlike an insurer, our liability is completely uncapped, and it is for this reason that we take registration fraud so seriously February 2017
According to the latest Annual Fraud Indicator, UK fraud losses last year could be £193 billion, equal to nearly £3,000 per head of population
Which technologies will impact the home-buying process in the next five years?
Technology changes all the time and over the next five years there’s no doubt the industry will be disrupted. An example is Digital Signature Technology, which enables consumers to sign documents online in a quick, efficient and secure way, without the need for a witness. We’re already trialling digital signatures on our new Digital Mortgage service that goes live later this year. This will enable our elements of the re-mortgage process to take place entirely online. Users much prefer the convenience of signing their mortgage online and we’re sure we’ll see digital signatures applied to more aspects of the home buying process over the next few years. We’ve also seen a massive increase in the use of mobile apps and we are sure that’s a trend which will continue for both conveyancers and citizens. Searching for a house on a mobile app is now commonplace, so why not searching the Land Register, ordering official copies or running an official search? The advent of cloud computing and big data means Artificial Intelligence (AI) is starting to show real promise. The opportunity to teach machines to do the work of humans will impact most industries and we’re sure home-buying is no different. In fact the Conveyancing Association highlighted AI as an opportunity in their recent whitepaper and last year the world’s first artificially intelligent lawyer was hired by a leading national law firm in America. We’re also seeing a lot of discussion about Blockchain technology and how it can be used to create a distributed land register. There’s certainly some merit in that approach, particularly in the US and in some of the emerging economies. There’s no doubt some of the underpinning technologies are applicable to HM Land Registry, but we’re still exploring whether a Blockchain register solves a real problem for the industry. For us, the most important aspect in adopting new technology is being sure that it benefits all our users and makes the conveyancing process simpler, faster and cheaper. This is why we are planning a public pilot later this year to explore how some of these new technologies might benefit Land Registry and the wider industry.
Comprehensive registration – what next?
Land Registry is committed to becoming the world’s leading land registry for speed, simplicity and an open approach to data, and will aim to achieve comprehensive land registration by 2030. This will include all publicly-held land in the areas of greatest housing need being registered by 2020, with the rest to follow by 2025. It will aid better data sharing across government for the purposes of supporting development, ensuring financial stability, tax collection, law enforcement and the protection of national security.
Alasdair Lewis Alasdair Lewis joined Her Majesty’s Land Registry for England and Wales in 1984 and was promoted to Telford Land Registrar in 1998. In 2005 he moved into a Head Office role as Business Change Manager (effective Head of Strategy). In that role he produced the Organisational Blueprint and managed the Business Change and Business Transformation programmes. He was also responsible for the International Unit and was a member of the board of EULIS. Alasdair became Director of Legal Services in April 2010. The Director of Legal Services is the principal legal adviser to the Chief Land Registrar and to HM Land Registry. He leads the legal function in HMLR and is accountable for the integrity of the register of title. Alasdair is responsible for ensuring that the organisation has the legal services it requires. In particular his teams deal with indemnity claims and with litigation that arises as a result of casework decisions. Since 2013 Alasdair has been the President of the European Land Registry Association.
Currently, 83% of the land in England and Wales is registered with Land Registry. Our priority over the next 12 months will be to work initially with a small number of Local Authorities as part of a pilot that will support the identification and then registration of this priority land. This early work will inform the programme through to 2020.
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ARE YOU FUTURE PROOF? TUESDAY 23rd MAY 2017 08.30 - 09.15
Registration & Breakfast
09.15 - 09.30
Chairman’s Welcome Chris Harris, MD, Lawyer Checker Tony Piccirillo, Partner, AVRillo
09.30 - 10.15
Keynote Address - Where is the UK housing market heading? Mark Easton, Journalist and Broadcaster
10.15 - 11.00
PANEL 1 – Client Care: Breaking down barriers Mark Montgomery, Customer Strategy & Marketing Director, My HomeMove Andy Foster, Panel Member, Legal Services Consumer Panel (LSCP) Darren Cox, Ombudsman, Legal Ombudsman Graham Murphy, Product Manager at The Law Society
11.00 - 11.45
11.45 - 12.45
PANEL 2 – Managing your firm Paul Saunders, Managing Director, Legal Eye Mike Ockenden, Thornby Associates & SLC Sheila Kumar, Chief Executive, Council for Licensed Conveyancers (CLC) Beth Rudolph, Director of Delivery, The Conveyancing Association Edward Donne, Director, Professional Indemnity, Howden UK Group Limited
12.45 - 13.30
PANEL 3 – Identity theft cases Rob Hailstone, Founder, Bold Legal Group David Knowles, Head of Financial Crime, Paycasso Tim Prior, Director, PNCR Legal Edward Powell, Director, BE Consultancy Edward Donne, Director, Professional Indemnity, Howden UK Group Limited
13.30 - 14.30
14.30 - 15.30
PANEL 4 – Best Practice in Conveyancing Sarah Tucker, Head of Conveyancing, LSL Estate Agency Division Stephen Murray, Business Development Director, PSG Justin Parkinson, Managing Director, Decision First Tom Barry, Director of Sales & Lettings at Keller Williams
15.30 - 16.20
PANEL 5 - Leading the Field Tom Bridge, Director of Conveyancing, Keoghs David Parton, Partner, Shoosmiths LLP Dawn Tew, Legal Services Director, Shakespeare Martineau Paul Hajek, Solicitor, Clutton Cox Sara Hutton, Head of Professionals Sector North West, Commercial Banking Royal Bank of Scotland
16.20 - 16.30
Closing Remarks - Chris Harris & Tony Piccirillo
Tickets priced at £125 ex.vat Book now at www.mlconveyancingevents.co.uk Sponsorship enquiries please contact Kate McKittrick | email@example.com | 01765 600909 Event enquiries please contact Ellie Campbell | firstname.lastname@example.org | 01765 600909
*programme subject to change
Etihad Stadium, Manchester
Should Environmental Due Diligence Include Air Quality? Looking ahead to a post-Brexit climate, Patrick Lawler explains the dangers caused by poor air quality, how it can be combated and how poor air quality affects the conveyancing process. ir pollution has been heavily documented in the media and it is quickly emerging as a major environmental risk. From diesel car emissions to the government breaching air pollution laws, the effects of poor air quality if drastic action isn’t taken are heading towards a “public health emergency”1.
During the first week of January, Brixton Road in Lambeth breached its air pollution limit for 2017 in just five days2, and during the same week scientists revealed that one in 10 cases of Alzheimer’s disease in people living near busy roads could be linked to air pollution, based on a study in Ontario. Poor air quality has been a lingering issue for quite some time, with London experiencing the worst cases of pollution over 60 years ago, commonly known as the ‘Great Smog of London’. The ‘smog’ of 1952 was a combination of soot laden air and droplets of sulphuric acid, which brought the capital to a standstill, with an estimated 4,000 people killed as a result of the smoky conditions. Although today’s pollution is significantly less viable compared to the Great Smog, the pollution levels are still dangerously high. The concerning statistics from the Department for Environment, Food and Rural Affairs (DEFRA) shows that poor air quality has been linked to more than 40,000 premature deaths in the UK every year3, of which 9,400 are in London alone4. The average adult at rest inhales and exhales around 7 litres of air per minute5, roughly over 10,000 litres of air each day, highlighting how fundamental good air quality is to our well-being. So, how is air quality being monitored and should we be considering the risks of poor air quality in the due diligence searches we perform for clients as part of the conveyancing process?
The 2008 EU Ambient Air Quality Directive is the current legislation in place for the management and improvement of air quality. The directive states legally binding limits and target values for major pollutants. To ensure these targets are being met, widespread monitoring of pollutants takes place via the Automatic Urban and Rural Network (AURN), with responsibility for meeting these limits and target values devolved to the national administrations in Scotland, England, Wales and Northern Ireland. DEFRA manages the air quality plans for the UK, preparing and submitting an action plan with the aid of models and assessments to the EU each autumn for the previous year. If the air quality objectives are unlikely to be met, an Air Quality Management Area (AQMA) is declared. However, because of the result of the referendum, once the UK officially exits the EU this might be a different story. An analysis by Energydesk (June, 2016) found that up to 4,200 more people could be at risk of premature death from air pollution in 2030 if the UK fails to sign up to a new legislation. It is still not clear exactly how much of the current EU policies will be carried over and what new legislations will take effect once
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It is becoming increasingly more obvious that poor air quality has the potential to seriously affect public health; triggering asthma, causing severe illnesses and even shortening of life the UK exits the EU. It appears to be a waiting game for all, as many hoped the government would release a statement on what the future looks like post-Brexit and what the case will be when it comes to monitoring and improving the UK’s air quality. There are several factors which contribute to air pollution. One of these is the weather, which can often have an important impact on pollution levels, with windy weather allowing pollution to disperse and still weather causing pollution levels to build up. Other factors include the time of day; high levels of pollution tend to be in line with rush hour traffic and congestion. Typical pollutants also occur through industrial or domestic actions and through a build-up of traffic emissions. Petrol and especially diesel engine motor vehicles emit high levels of pollutants such as carbon monoxide and oxides of nitrogen, with NO2 pollution believed to result in 5,900 early deaths every year in London alone6.
A government spokesperson has stated “We are firmly committed to improving the UK’s air quality and cutting harmful emissions. We will update our air quality plans in the spring to further improve the nation’s air quality.”2 Among the measures currently proposed by the government is an additional pollution charge, which older diesel vehicles will face to enter certain main city centres across Britain from 2017. DEFRA must now review and put in place a new action plan to cut street levels of nitrogen dioxide (NO2), including a levy of £12.50 on diesel vehicles emitting dangerously high levels in “clean air zones”. The Mayor of London Sadiq Khan has promised to double funding to £875m over the next five years. Alongside introducing an ultra-low emission zone a year ahead of plans, the mayor plans to direct the funding towards measures including the improvement of Transport for London’s 9,300-strong bus fleet. He is also working on plans to help replace London’s older black cabs with those capable of zero emissions, as well as funding for local neighbourhood schemes. From an environmental due diligence perspective, awareness and monitoring of new developments and emerging environmental considerations is key in order to provide the information that is
There are several factors which contribute to air pollution. One of these is the weather, which can often have an important impact on pollution levels, with windy weather allowing pollution to disperse and still weather causing pollution levels to build up important to homebuyers. Future Climate Info (FCI) recognises this and is currently inviting feedback from solicitors and conveyancers as to whether air quality data is a component which should be included in a standard environmental search. The government data for air quality provided by DEFRA enables an authoritative screening, giving a good initial indication of potential risks from Air Pollutants affecting the location being searched. Using the data, it is possible to identify whether a property is in an Air Quality Management Area (AQMA), exactly which pollutants were declared, together with the local authority. Providing links to recommendations and advice on how to mitigate any impact on health associated with living in an AQMA would also be a helpful addition. Including the data within environmental searches has the potential both to assist the conveyancer in keeping pace with the issues that concern the public, and to help homebuyers understand the air quality risks and how to manage them in order to make betterinformed decisions. For developers, investors and landowners, the consideration of air quality and the associated risks will play a greater role as the government clamps down on pollution in 2017. Planning applications within an AQMA must already meet certain guidelines, and may be reviewed on a greater, stricter scale, so creating awareness and giving clients more knowledge upfront will allow them to make the necessary actions in order to avoid plans going awry. Geoff Offen, Managing Director of FCI highlighted the importance of monitoring these new developments; “Most consumers and property professionals are not experts in air quality and the impact pollution can have on health. As more monitoring takes place, the vital element is how to access the information and properly interpret its impact. As public awareness of the risk increases, there is an emerging need for a consistent national approach to reporting the available data, and doing so in a balanced way. One way to do that is in environmental searches,
giving conveyancers the opportunity to help their customers make an even better informed decision on their property transaction.” It is becoming increasingly more obvious that poor air quality has the potential to seriously affect public health; triggering asthma, causing severe illnesses and even shortening of life. It is essential that the government makes improving air quality a priority within sectors such as transport, industry, energy and agriculture. Following the High Court ruling, DEFRA were given eight months to produce an air quality plan compliant with EU laws, which means further details should be released around July 2017. In terms of what the Brexit impact will be on the EU air quality legislation, it is still unknown and very dependent on what shape Brexit finally takes, especially when it comes to the UK’s relationship with countries in the European Union. Patrick Lawler is a Geology Data Specialist at Future Climate Info. If you would like to send us your views on adding Air Quality data to environmental searches, please email email@example.com. 1 - Carrington, D. (2016) MPs: UK air pollution is a ‘public health emergency’. Available at: https://www.theguardian.com/environment/2016/apr/27/uk-air-pollution-public-healthemergency-crisis-diesel-cars (Accessed: 9 January 2017) 2 –Carrington, D. (2017) London breaches annual air pollution limit for 2017 in just five days. Available at: https://www.theguardian.com/environment/2017/jan/06/londonbreaches-toxic-air-pollution-limit-for-2017-in-just-five-days (Accessed: 6 January 2017) 3 – NHS (2016) Air pollution ‘kills 40,000 a year’ in the UK, says report. Available at: http://www.nhs.uk/news/2016/02February/Pages/Air-pollution-kills-40000-a-year-inthe-UK-says-report.aspx (Accessed 4 January 2016) 4 –BBC News (2015) London’s air pollutions ‘cost 9,400 lives’ Available at: http://www. bbc.co.uk/news/uk-england-london-33536989 (Accessed: 4 January 2017) 5 –Health, How Stuff Works (2016) How much oxygen does a person consume in a day? Available at: http://health.howstuffworks.com/human-body/systems/respiratory/ question98.htm (Accessed 3 January 2017) 6 –Devlin, H. (2017) Living near heavy traffic increases risk of dementia, says scientists. Available at: https://www.theguardian.com/society/2017/jan/04/living-near-heavy-trafficincreases-dementia-risk-say-scientists(Accessed: 6 January 2017)
The average adult at rest inhales and exhales around 7 litres of air per minute, roughly over 10,000 litres of air each day, highlighting how fundamental good air quality is to our well-being February 2017
Conveyancing Supplement 21
The Conveyancing Industry 2017 – Is the glass half full? Gareth Richards believes the next twelve months will bring exciting opportunities to the conveyancing market. He discusses what conveyancers need to do to make sure they can fully embrace these changes. 016 was very much a year of two halves for the conveyancing industry. The Stamp Duty Land Tax changes imposed for additional properties created an unprecedented upsurge in transaction volumes prior to the 31st March 2016 deadline, with the majority of companies recording record numbers of completions during March 2016. This was counteracted by a cautious summer and end to the year as notwithstanding the subsequent affect that the Stamp Duty Land Tax changes had on the Buy to Let market, the European Football Championships and the Olympics dominated the thoughts of many consumers and, coupled with the EU Referendum and the US Presidential Vote, led to a disappointing end to 2016 for most companies. Although, that said, the decision to shelve the privatisation of the Land Registry was seen by many as a welcome highlight at the end of the year.
The number of people buying homes is expected to fall in 2017. The continued Stamp Duty Land Tax increases on additional properties, the embargoes on landlord’s tax relief and the reduction in buy to let mortgage interest relief has had a negative impact on the conveyancing industry, with Landlords, Buy to Let and cash purchasers representing approximately one third of property transactions in the UK. It was hoped that the government would have helped redress the balance in this respect in the Autumn Statement, but unfortunately the hopes of many Conveyancers were dashed, and although hopes remain that the government will reconsider their position to boost the industry in 2017, it is believed that the demands of Brexit will be too consuming.
Lessons from 2016
So, we are left to wonder what is in store for the industry in 2017, and if 2016 taught us nothing else, we should expect the unexpected and embrace change. That said, it is not all doom and gloom and there are encouraging signs for 2017. During December 2016, NAEA research confirmed that sales for both first time and home buyers went against the usual seasonal trends. Key points from the Housing Market Report include: • During December, the number of prospective buyers registered per branch was the highest in 13 years • Sales to first time buyers being the highest recorded since 2001 • The number of houses available to purchase marginally increased • The number of people looking to buy a home in December rose to the highest level observed since 2003, with branches registering a 12% increase on November average figures
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It is not all doom and gloom, and there are encouraging signs for 2017 Consumer confidence would appear to have grown towards the end of 2016. Interest rates are low and employment levels are high, which is an ideal situation for a healthy housing market, and the buy to let market’s loss has been the owner-occupier’s gain as first time buyers and those looking to ‘move up the housing ladder’ are left with less competition for the properties they want to buy.
For first time buyers
According to new research, 2016 saw more first time buyers than at any point since the recession. This increase has been attributed to low mortgage rates and high employment levels. In addition, Government schemes such as Help to Buy have improved affordability, enabling more first time buyers to buy their first homes with over 180,000 first time buyer households having been helped on to the housing ladder using the Help to Buy Scheme. The Government has stated that thousands of first time buyer homes will be built this year. Throughout England, thirty areas are due to receive funding from the £1.2 billion ‘Starter Homes Land Fund’ for the new brownfield site developments. Buyers will receive a minimum discount of 20% below market value and must be aged between 23 and 40 in order to be eligible. The properties are predicted to go on sale in 2018. Data from the Council of Mortgage Lenders indicated that lending grew during November and December 2016, with £11 billion being borrowed by home owners for the purpose of buying a house during November. This represents a monthly rise of 5% when compared with October 2016 and an annual increase of 2%. For first time buyers, the amount borrowed increased by 4% since October, with an annual rise of 9% showing that first time buyers benefitted as the value and volume of loans rose annually, despite the political and economic uncertainty. Rightmove have recently reported that since Boxing Day there has been an increase in traffic of 5%, providing an early indicator that housing demand seems robust. The current search activity growth is interesting to note, as that which occurred in 2016 may have been unusually high due to the second home Stamp Duty Land Tax amendments announced in November 2015.
Conveyancers should look to 2017 with optimism and take the opportunity to review their business’ practices, processes and products to meet the ever-increasing demands of the consumer client Conveyancers should look to 2017 with optimism and take the opportunity to review their business’ practices, processes and products to meet the ever-increasing demands of the consumer client.
Modernising the home moving process
In an age where you can now buy your weekly shop from the comfort of your bed at 3:00am (if you wish) and have your goods delivered within a few hours, clients expect the same level of commitment from their lawyer when making the biggest financial commitment of their lives. Conveyancers need to look at how they are communicating with their clients in order to enhance the home buying experience and create positivity. If not, the ease of social media will mean that the world and their dog will hear of a client’s ‘negative’ experience. Communication is key in order to manage the expectations of our clients, and the use of technology is essential in order to elevate the standard. Whilst online case tracking tools represent an industry staple, developed over the last few years, conveyancers should look to embrace technology and social media as an exciting opportunity to innovate and to bring them closer to their clients. There is a firm commitment within the industry, by the key stakeholders, to improve the home buying process. The Society for Licensed Conveyancers together with the Conveyancing Association are driving the necessary changes in this respect, with the support of the Council for Licensed Conveyancers, the Law Society, mortgage lenders and estate agents who are committed to modernising the conveyancing process. The Conveyancing Association’s White Paper ‘Modernising the Home Moving Process’ outlines how a future, more certain and transparent conveyancing process could operate. The White Paper focuses particularly on the benefits to be gained from creating greater certainty far earlier in the home moving process. It suggests a number of ways in which this can be achieved, including: • Centralising the identity verification of the parties to reduce the risk of fraud and money laundering • Collating the Property Information and Title Information on the marketing of a property • Requiring a legal commitment on offer to reduce transaction failures • Requiring completion monies to be sent through the day before completion • Amending the Commonhold & Leasehold Reform Act 2002 to resolve the unreasonable cost and delay now associated with the leasehold sales process • Providing a reliable lending decision-in-principle based on a ‘hard’ credit report without impacting on the applicant’s credit score • Reviewing the CML Handbook to remove anomalies and ambiguous entries which generate post-valuation enquiries
Crime in conveyancing
Cyber Crime is seen by many as the most dangerous risk to Conveyancers that there has ever been and again, companies need to ensure that they are doing all they can to protect themselves and their clients against the risk of Cyber Crime and ‘Friday Afternoon Fraud’. Research shows that one in ten people will be affected by Cyber Crime, and over the last two years over £10.5 million was lost by homeowners through Cyber Fraud. In addition, Law Society research shows that one in five law firms were targeted by fraudsters in the past year. We are all aware of the horror stories of unsuspecting purchasers losing many thousands of pounds from Phishing, Spear Phishing and Vishing scams, which emphasise the need for us to educate our clients of the very real risk of Cyber Fraud to ensure that they protect themselves and their assets in a robust manner. Clients need to be assured that when they are transferring huge deposit sums, they are doing so safely and do not make themselves an easy target for fraudsters, i.e. registering for the Land Registry’s free Property Alert Service, not using free Wi-Fi facilities to make online banking payments or posting updates about what colour curtains they will be putting in their new bedroom on Facebook or Twitter! In addition to the education of clients, it is vital to ensure that conveyancers implement and maintain robust systems and procedures for their internal protection, e.g. the Cyber Essentials Scheme, and by verifying the identity of the other lawyer. In addition, staff should be appropriately trained biannually to ensure the maximum level of protection. In conclusion, whilst 2017 may be a challenging year for Conveyancers, we must embrace change as there are exciting times ahead – the glass is most definitely half full! Gareth Richards is a Board Member of The Society of Licensed Conveyancers.
Conveyancing Supplement 23
There won’t always be an ambulance at the bottom Edward Donne of specialist Professional Indemnity Insurance (PII) broker Howden sets out his views regarding the current relationship between Conveyancers and the PII market. He examines the most common causes of claims and provides guidance on how to avoid them. “We like to build a fence around the top of a cliff, rather than station an Ambulance at the bottom” Professor Richard Susskind OBE, speaking at the 2016 Conveyancing Association Conference. According to the SRA’s analysis of PII trends, 26% of claims notified to insurers from SRA regulated firms arose from Residential Conveyancing, 14% from Commercial Conveyancing and a further 11% from “unspecified” Conveyancing. These figures vindicate the decision by some insurers to steer clear of underwriting firms with a conveyancing exposure. They also explain why those insurers who continue to participate battle year after year to make a profit.
The good times won’t last forever
Capital is currently flooding into the insurance market as investors try to generate profit at a time of historically low interest rates. This has led to an increase in competition amongst insurers and a noticeable reduction in PII rates for most professional services firms. Conveyancers are no exception and many firms will be breathing a sigh of financial relief after the costly years of 2009-2012. However, this will not continue if interest rates rise, as capital will be diverted from the insurance market into more lucrative sectors. Combine a precarious economic backdrop and slim, if not nonexistent, underwriting profits with the fact that insurers face an increased exposure to loss, as property values continue to rise, and it’s easy to understand why competitive PII premiums cannot last forever. A wise conveyancing firm should, therefore, be trying to protect themselves from a future shock rise in premiums by ensuring they are managing their PII responsibly and are in the best position to differentiate themselves from firms with a poor approach to risk management. Developing strong risk management is partially predicated on an understanding of where claims commonly arise. It’s also important to note that whilst claim volumes increase significantly following a downturn, these issues continue to arise irrespective of the prevailing economic conditions. While this list is not exhaustive, the following points highlight where conveyancers commonly go wrong: • Whilst a report was obtained on the possible effects of HS2 on a property, it was not shared with the client • A failure to ensure that the correct Title was transferred • Proper checks were not carried out to establish that the client was indeed the property owner, and entitled to the sale proceeds • The conveyancer wrongly advised that a lease was 99 years, when in fact it was 15 years shorter • It is erroneously stated that correct planning permission is in place when it is not
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Capital is currently flooding into the insurance market as investors try to generate profit at a time of historically low interest rates • The client’s email was hacked. The fraudsters supplied alternative bank details for the transfer of the sale proceeds • Failure to address or advise on Rights of Way • Failure to include parking spaces • Acting without client authority • Failing to remove a charge or mortgage • Failing to obtain consent on ‘change of use’ • Acting in a conflict of interest • Requisitions and lender requirements
• Ensure business culture engenders, rather than discourages, a good approach to risk management • Invest in technology that wherever possible forces the adoption of a standard process. This should improve efficiency, minimise the risk of claims and enhance customer service • Make sure links to databases, such as the Local Authority, Land Registry etc. are up to date • “Peer Review” complicated or unusual transactions, especially where the property is located in an area outside of your usual geographic focus • Make sure there are robust systems in place to establish client identity • Never accept a change in a client’s bank details during the execution of the transaction, without comprehensively checking the request to alter the bank details • Remember that one of the best defenses to a claim is to be able to evidence that you followed the correct methodology
2017 and beyond
In addition to the above litany of exposures, no commentary on this sector and the insurance market can be complete without reference to Cyber Liability. There is a common misconception that, owing to the breadth of the SRA or the CLC PII wording, the policies will respond to all possible claims arising from the conduct of professional business, whether first party or third party. However, when the approach to Solicitors PII was first formulated the world was a very different place, and losses arising in relation to data and/or IT were not considered a sufficient threat to warrant specific coverage.
Combine a precarious economic backdrop and slim, if not nonexistent, underwriting profits with the fact that insurers face an increased exposure to loss, as property values continue to rise, and it’s easy to understand why competitive PII premiums cannot last forever Whilst you should continue to look to your PII policy for indemnification from breaches of professional or fiduciary duty, a Cyber Liability policy is a useful addition to your insurance portfolio, providing immediate access to the specialist expertise you will need to minimise the impact of a systems or data breach. Furthermore, PI policies will not respond to first party losses as result of, for example, an interruption to your systems which severely impacts your business. Defined by criminals threatening to “freeze”, or indeed actually “freezing” a firm’s computer system, Ransomware attacks increased by 35% in 2015. Hackers will offer to “free up” the system in return for a cash payment; interestingly the amount demanded is relatively small, it’s only once you have made the mistake of paying the ransom demand that your details are shared throughout the “Dark Web”, leading to further problems. A cyber policy will provide you with emergency access to specialist incident response teams that will handle both the hackers’ demands and the requirement to get your system back up and running as quickly as possible.
From an Insurer’s standpoint, fraud is the most frustrating loss, given that the risk has been highlighted constantly across the media and by regulators. Yet month after month, very sophisticated criminals target the conveyancing industry. They will try to approach everyone in an attempt to remove funds from the conveyancing chain, from the managing partner to the reception team. Security experts believe that the conveyancing industry must make interfering in a transaction so difficult that fraudsters move on to another source of easy money. This will only be achieved if all the stakeholders involved in a property transaction collaborate.
Continuing competition for conveyancing instructions has lead to, in some case, firms cutting fees to seemingly non viable levels. This means that there is little or no money left to invest in staff training and systems. This will inevitably lead to an increase in the likelihood of a negligence allegation arising as a result of both individual errors and, more worryingly, systemic problems.
A glance at the web will bring up a tranche of seemingly attractive offers. However, to an informed external commentator, it appears that an offer to carry out a conveyance for under It is anticipated that the increase in these incidents will lead to £100 and the further attraction of perhaps not having to Cyber Liability insurance costing a great deal more in the future, produce original verification of ID, is a sign that not all firms are with policy cover constantly being restricted rather than extended. offering a professional service supported by a robust approach to risk management. According to information provided by the Insurer, QBE, and based on research with their own Insureds, 2015 saw 150 According to the SRA PII analysis, underinvestment in a firm leads to: successful “Friday Afternoon” frauds and astonishingly 10 times that number of unsuccessful attempts. In order to re emphasize • Work carried out by unqualified staff without suitable supervision the scale of the problem, over 25% of firms have experienced a • Inadequate risk practice client attempting to use a conveyancing transaction to commit a • Pressures to complete large volumes of work under severe financial crime. time pressures
Good risk management facilitates growth
From an Insurer’s standpoint, fraud is the most frustrating loss, given that the risk has been highlighted constantly across the media and by regulators
The British obsession with property is unlikely to abate and values will continue to rise if our housing stock remains at its current level. Even in the current quieter market, there were approximately 1,200,000 conveyancing transactions in 2015. Inevitably, some transactions will go wrong because that is life, and that is why we buy insurance to protect our clients and our firms. However, there are risks that can be addressed by investing in your firm, training your staff and by maintaining awareness of risk and in turn, responding to it. Good risk management does not need to be counter-productive. Done well, it will benefit your business and your bottom line and it will ensure that you remain insured. Edward Donne is Director at Howden Professional Indemnity.
Conveyancing Supplement 25
Are you ready to work smarter? Andrew Lloyd explains why 2016 was a good year for the conveyancing market, and how it can keep up this momentum to make the next year even better. s the final votes were counted and the nation prepared itself for one of the largest political events since the Second World War, June 2016’s referendum on EU membership, many anticipated that our housing market would be the first to show its vulnerabilities. So came the Brexit decision and down came the Great British Pound, but the housing market was unperturbed. House prices increased by a steady 4.5% in 2016, the same rate as 2015; the Council of Mortgage Lenders said gross lending in the 12 months to November rose by 3%; and by September, RICS had already announced the housing market had ‘settled down since Brexit’1.
While the dust settles and the future of our economy becomes ever so slightly clearer, the heat is on in the property sector to keep up the momentum that saw us surviving 2016’s uncertainty and to ensure we are well-equipped for the times ahead. Given the circumstances, yes, we can be thankful for the state our industry is in as we enter the New Year, but there are many challenges ahead and for conveyancers, the pressure is on. We can take away something key from the year behind us, to learn to live with unpredictability and rather than planning for the long term, to make strategic decisions which have no shelf life. As Theresa May delivered her Industrial Strategy this month, she introduced the Green Paper with productivity in the UK at the forefront. The following quote really resonated with me, and for our business, as we plan ahead; “improving productivity does not mean making people work harder. It means helping them to work smarter.”2 In support of this, the document outlined that the newly announced Productivity Council aims to provide strong, sustained leadership and business-to-business advice to raise productivity across the business community. Such support is welcomed, but small changes to the way we work can make an immediate, sustainable impact on the quality of service we provide to our customers, which can be supported by government assistance as they draw up their plans. The opportunity for sustainable productivity is clear if we embrace an attitude change in the conveyancing sector.
Quantity and quality
Our industry saw the average conveyancer completing one transaction every 2.4 working days in 2015, compared with 3.5 working days in 2012, and as year-on-year transaction volumes continue to grow, the industry average of completed transactions per conveyancer has risen by 55% in three years3. This is undeniably an impressive result in terms of improved productivity, but we must not ignore how this has come about – both the good and the bad. Since 2012, conveyancers are successfully completing record numbers of transactions to keep up with the intensified demand in the housing market. However, this comes with a price. Many conveyancers will be feeling the strain of the extra workload and firms are likely to be working flat out to meet the growing
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Often, proactively providing updates on a transaction automatically, such as by text or email, can save you time answering chase calls and emails demand for their services. A good problem to have, some may say, but if the quality of service is compromised to meet such high volumes, then change is needed in your firm. Productivity must be the focus for all if our market is to gain momentum in 2017, and it is something that is now being highlighted on a national level.
Are you ready to improve?
Conveyancers are very much ‘traditional’ professionals who work on the basis of their legal acumen and well established experience on previous cases. As complimentary as these qualities can be, the conservative instinct that they breed can often cause an unwillingness to modernise. Tech can bring endless amounts of opportunity to the unproductive firm, but the first question you must ask is: are you ready to improve? Firms are not regularly looking at their productivity levels and key processes, and therefore do not recognise the need for IT upgrades. Of course there are many reasons why conveyancers may not wish to invest in the latest technology; some deem it expensive whilst others think it adds unnecessary frills. The truth though, is that the traditional conveyancing industry is due to be challenged by the modern day firm, much like the rise of the online agent in the estate agent space. Those who embrace new technology are already reaping the rewards in regards to their productivity levels and ultimately, customer satisfaction. On a monthly basis, the industry average, as calculated by the Conveyancing Productivity Index, which measures the industry average for completed transactions per conveyancer on a monthly and yearly basis, shows conveyancers completed three more cases each month in 2015 than three years earlier: rising from six transactions per conveyancer per month in 2012 to nine last year4. Our jobs are getting no easier, but there is opportunity for more efficient case management, faster payment methods and more informative, reassuring customer interaction, all through the means of technology and simple steps such as up to date IT infrastructure. The services our businesses can provide can be revolutionised as our time is more effectively deployed to the job at hand, rather than to administrative work that can, in many cases, be automated by a computer. The searches sector of the conveyancing industry is certainly no
The truth though, is that the traditional conveyancing industry is due to be challenged by the modern day firm, much like the rise of the online agent in the estate agent space exception to these challenges and, like the traditional conveyancer, the technological advancements of the past twenty years have brought the opportunity for new products and services. Innovation in residential searches has been boosted by greater access to big data due to Land Registry’s transparency, for example, which has allowed Search Acumen to introduce an increasing amount of new data streams to improve our offering and provide a more integrated system that works in real time. This has been followed by the arrival of a new-and-improved service for the commercial market - the natural next step in the market. Big data has allowed for a transformation of the due diligence process in the commercial market for real estate lawyers, especially as the requirement for higher volumes of searches continues to grow. Like in the residential market, it allows access to property data sets, at a more in depth level, and has the ability to conduct and manage searches in a revolutionary way. But the benefits of modernisation do not stop there.
Communication in conveyancing
Be they be a client or customer, transparency is amongst the most important factors to consider for those providing a service. Polls have found that almost a quarter of UK consumers blame poor communication between lawyers, lenders and estate agents for collapsed house sales5. Often, proactively providing updates on a transaction automatically, such as by text or email, can save you time answering chase calls and emails. This being said, effective communication isn’t just about picking up the phone; big data and new tech has the ability to enhance engagement on both sides of the customer-conveyancer equation, easing the entire process and ensuring a positive outcome.
turnaround the UK’s historically low productivity levels. There are many challenges ahead of us and we cannot predict the future, but a total awareness of how we can become more productive will place the conveyancing sector in a position of strength and adaptability. It is all very well wishing for an energised property market, but could your firm keep up with an upturn in activity? To be truly productive, the gains must be sustainable. Firms must be able to deliver more cases per person without detrimentally effecting the wider business. Company-wide commitment to innovation is essential, along with openness to external help, and a wholehearted embrace of technology. Investing in secure and effective tech should not be seen as a ‘recommended expense’, it has no best before date and will put firms strides ahead of the rest in today’s highly competitive landscape. 1 http://www.bbc.co.uk/news/business-36956418 2https://www.gov.uk/government/uploads/system/uploads/attachment_data/ file/585273/building-our-industrial-strategy-green-paper.pdf 3 http://www.search-acumen.co.uk/News/Read?Ref=PSf7XQ 4 http://www.search-acumen.co.uk/News/Read?Ref=PSf7XQ 5 http://www.lawgazette.co.uk/practice/poor-communications-blamed-forconveyancing-delays-finds-poll/5039081.fullarticle 6 https://www.theguardian.com/money/2017/jan/14/lost-67000-conveyancing-scamfriday-afternoon-fraud-legal-sector-email-hacker
Andrew Lloyd is Managing Director of Search Acumen.
By seizing the opportunity we have to modernise our infrastructure, we can protect our businesses and customers from the increasing amount of security threats in our industry. The latest reports on ‘Friday afternoon fraud’ speak of a charity worker buying his first home and having £67,000 of life savings stolen after fraudsters hacked into emails sent between him and his conveyancing solicitor6. This is completely avoidable. “Conveyancing theft”, which involves hacked emails, is now the most common cybercrime in legal circles, and these stories will no doubt dampen consumer confidence. Cybercrime is no new phenomena for conveyancers and it is time that every single firm acted in the interests of all transaction stakeholders’ protection. Firms must act and get their guard up for good against these threats; invest in quality tech and keep your software up to date. If you are not an expert in IT, accountancy, process management or marketing, ‘buy in’ help from those who have the acumen.
Productivity is clearly on the government’s radar; Phillip Hammond made it a key focus of his Autumn Statement and the recent industrial strategy seeks to tackle the budget deficit and
Conveyancing Supplement 27
Local Searches – What a transaction wants? 1. Accuracy 2. Speed 3. Warranty With digitisation commencing and the centralisation of the Local Land Charges Register set to become a reality (if on a phased basis) later this year, I thought it time to look again at the choice a conveyancer has in the local search to offer their client. As you know, a Local Search is required in the majority of property transactions for value, particularly where a purchaser is borrowing the money from a mortgage provider, although occasionally insurance is used in lieu of a Search. There are two types of Local Searches:
I have seen financial charges in excess of £20,000 on residential searches, which, if not settled by the seller prior to the transaction, would become the liability of the new owner. The Con29 or Enquiries of the Local Authority
The Council Local Search produced by the local council contains two elements; the Local Land Charges Certificate of Search (The LLC1) and Enquiries of the Local Authority (the CON29).
The CON29 has been in existence for over 50 years and contains a standard set of questions agreed by central government, the Law Society and the Local Government Association. This has been updated over the years with the latest changes to questions implemented in July 2016.
The Regulated (Personal) Local Search produced by private search companies (PSCs), which combines information from the Local Land Charges Register and all the information included in the CON29 into a single report. PSCs may also cross reference against previous searches on and, in the vicinity of, the property and often use additional data sets and research where any anomalies are revealed in the council data.
The rights for individuals to inspect other relevant registers containing information detailed in the CON29 and which is required to complete the Regulated Search appears in various other pieces of legislation and/or is available via requests using the Environmental Information Regulations 2004. Private search companies use these laws and regulations to access the data needed to complete the Regulated Local Search.
The Local Land Charges Register Search (LLC1 Search)
Common entries revealed in the Enquiries of Local Authority include such information as planning and building control histories, nearby Road and Rail Schemes, whether the council maintains the roads and footpaths and some pending information that has not made it on to the Land Charges Register yet.
Local Land Charges were established in 1925 to provide applicants with details of entries on the LLC Register in respect of the property(s) being searched. An LLC1 search can be carried out in respect of 12 parts of the Register or just single parts. The principal regulations which govern the Local Land Charges Register are contained in the Local Land Charges Act 1975 and the Rules of 1977. The Local Land Charges Registers held at each individual Council will be moving to a centralised single register held by the Land Registry. This is due to commence from the end of 2017 and aims to be completed by 2022/3. The government is expected to issue the new Local Land Charges Rules 2017 later this year. The right for any individual to inspect the register (a personal search) is contained within the Act and the Rules and this will remain in the new legislation. Amongst a number of issues which can be revealed in the Land Charges Register, one of the most important are any financial charges, which stay with the property and not the owner. I have seen financial charges in excess of £20,000 on residential searches, which, if not settled by the seller prior to the transaction, would become the liability of the new owner.
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HMRC has now ruled the production of CON29 by Councils is a commercial activity and from January 2017 councils are required to apply VAT to the CON29 element (although some councils have obtained an exemption which allows them to delay implementation of VAT until April). The private sector has always had to apply VAT to its searches.
Whilst the LLC1 and the CON29 provides a “standard” set of questions, the format of how this information is delivered back can vary quite dramatically, with some councils providing a logically and well-presented response whilst others appear to be little better than scraps of paper, photocopied, scribbled on and assembled in no particular order. The PSC’s versions are standardised in format and response, and are arguably more user friendly to a busy conveyancer dealing with searches from a variety of administrative districts.
The digital age has seen a whole host of other associated searches evolve from the ever-increasing availability and digitisation of data and information, and we expect this to continue. Costs
Councils set their own fees for both the LLC1 and the CON29, creating a post code lottery for the price paid by the consumer for the Council produced product. Current prices range from £44 at Wakefield Council to a whopping £351.80 including VAT at Tonbridge and Malling Borough Council. Private Search Companies normally offer their customers a standard or fixed pricing structure for the Regulated Local Search ranging from around £75 to £120 including VAT.
Again, this is a bit of a postcode lottery for both the Council Search and the Regulated Search. The best local Authority is again Wakefield at around 4 hours, or if you are unlucky enough to be buying a property in West Dorset you can expect to wait anywhere between 10 and 20 weeks! As private search companies often rely on accessing or obtaining data from councils, there are wide variations in how easily accessible the information is, and turnarounds tend to vary from 24 hours to several weeks, although the average turnaround time is around 10 days. The centralisation of the Land Charges register by Land Registry should improve access to the register and the turnaround of the LLC1/Land Charge data.
Liability and Warranty
The Council LLC1 & CON29 is backed by Local Authority Insurance, though this varies from council to council. Regulated Search providers are signatories to the Search Code (the industry code of practice owned by the Council of Property Search Organisations, CoPSO). Compliance with the code is monitored and enforced by The Property Codes Compliance Board, an independent compliance and consumer interest body. The Code requires signatories to have a minimum level of Professional Indemnity Insurance for searches of £2million, although many CoPSO members operate in commercial and residential real estate sectors and have £10million PII. In addition, signatories must provide additional insurance cover referred to as Specialist Search Insurance, which provides cover for errors and omissions in the source data obtained from the council; providing a belt and braces approach to consumer protection.
Recent independent research conducted by Ipsos MORI on behalf of the Land Registry revealed that 82% of firms rated the accuracy of information provided by Personal Search companies (PSC’s) as excellent or very good, compared to 76% of those that go direct to the council. It also revealed that 23% of firms ordered their searches direct from the local council, 39% from PSC’s and 35% from search intermediaries (this would be a mixture of council and regulated searches).
What may the future hold?
Over the last 20 years, competition, innovation and technological advancements have brought, and continue to bring, many benefits to conveyancers in accessing Local Search information. The digital age has seen a whole host of other associated searches evolve from the ever-increasing availability and digitisation of data and information, and we expect this to continue. Exception reporting is becoming more common in how issues are revealed; we are being asked to provide data feeds rather than reports, and this will alert a conveyancer as to whether they need to look at something or not. The debate on Artificial Intelligence in Conveyancing and other legal processes is gaining pace again and lends itself well to this kind of process. Whilst it would be true to say that at present it is very rare that search delays hold up a transaction, it will be the case that as other bottlenecks are removed this will become more of an issue. I very much welcome the white paper, “Modernising The Home Moving Process”, produced by the Conveyancing Association, and I look forward to working with all stakeholders to improve the availability of relevant information to not only improve the overall speed of a transaction, but also to ensure home owners have enough knowledge to make truly informed decisions. Caveat Emptor! Stephen Murray is Business Development Director at PSG.
Conveyancer Preference – The Ipsos MORI Poll 2016
The majority of mortgage lenders accept both types of search, making specific reference to the Search Code in part 2 of the Lenders Handbook (a list of instructions to the conveyancer from the Lender) and there is a fairly even split between conveyancers who choose the council search and the Regulated Local Search.
Conveyancing Supplement 29
That sinking feeling – The Ripon sinkhole inkholes are becoming a nuisance, and can even be devastating for some. The number of cases of ground collapsing through natural causes is possibly a result of changing rainfall and ground water conditions.
Large areas of the country are underlain by rock formations such as limestone, chalk, salt and gypsum, which can be eroded or readily dissolved by water action over different timescales. While dissolution processes acting upon limestone and chalk take tens of thousands of years to form solution features, similar features can be formed in shorter periods in the more soluble rocks containing gypsum and salt. Climatic conditions producing surface flooding and heavy rainfall can trigger destabilisation of pre-existing solution features, and in the case of salt and gypsum cause renewed intensification of dissolution activity to produce new features. By contrast, water levels decline during drought conditions, leading to removal of the support of water in underground cavities which can lead to instability. However, there are other man-made factors which could affect ground stability such as historical mining sites, dewatering, drilling and construction. Ripon in North Yorkshire is no stranger to sinkholes, with a recent hole appearing in November 2016 and previously in 2014, 1980 and 1979. According to the British Geological Survey (BGS) (Nov, 2016), the geology of Ripon comprises of Marls, Limestone and Gypsum and common triggering mechanisms include: • Enlargement of the caves due to subsurface dissolution • Infiltration of water from the surface washing down fine materials from the covering deposits • Fluctuations in the groundwater levels; rising groundwater wets covering materials and falling groundwater leaves the cover the saturated and without hydraulic support The most recent Ripon sinkhole meant twelve homes had to be evacuated after a 20 metre by 10 metre hole appeared. In 2014, a 100-year-old detached house in an adjoining street to Magdalen’s Road in Ripon was demolished after a 25ft-wide sinkhole appeared. Ripon is one of the more susceptible areas of the UK to experience sinkholes due to “Permian gypsum deposits” that are present in Permian rocks of eastern and northern England. This was in fact the cause of the Ripon ground collapses, where gypsum is present beneath the surface and, being a highly soluble rock, it can dissolve very quickly. It has led to cave formations, which will eventually
Although it is not possible to plan for the timing and the exact location of sinkholes and any subsidence caused by natural causes, it is advised that ground stability reports are carried out if the area poses a risk 30 Conveyancing Supplement
collapse and cause severe subsidence, however, gypsum at depth tends to dissolve slower than if it was in rivers, partly because of the generally slower water flow and partly because the water gets saturated with dissolved gypsum (Klimchouk et al., 1996). It is fast becoming a common geological hazard. The combination of gypsum and water can cause several problems for developers and engineers such as ground and structural failures. Subsidence caused by gypsum dissolution can often be complicated to repair and little can be done to mitigate the problem. The best approach if you think gypsum is present is to conduct a thorough site investigation and hazard avoidance, followed by a carefully thought out design plan so the construction can cope with any expected subsidence. Findings from Anthony H.Cooper (2006) during a field trip to Ripon found that there is special planning control in place where buildings are now constructed on reinforced raft foundations providing additional strength and protection. Although it is not possible to plan for the timing and the exact location of sinkholes and any subsidence caused by natural causes, it is advised that ground stability reports are carried out if the area poses a risk and relevant measures are in place to reduce any damage that may occur. Dr Clive Edmonds, a specialist in Geotechnics and Geohazards and a partner at Peter Brett Associates LLP, which provides risk area data to FCI environmental reports, provides comments on the Ripon sinkhole. He said, “predicting subsidence across areas underlain by gypsum is complex, though it is possible that following the appearance of one sinkhole, the next sinkholes to form may produce a cluster in the local vicinity. It rather depends upon the pattern of water flow and solution widened joints in the gypsum and how the water flow might be diverted following collapse of a cave roof. Developers should therefore obtain specialist foundation and drainage design advice when constructing in such hazardous terrains.” FCI’s environmental data considers different factors such as ground stability, environmental issues, flood risk and energy & infrastructure as well as using relevant datasets such as the BGS Geosure Soluble Rocks, which enables us to identify and highlight areas of greater risk. This allows FCI to provide an early indication of the specific risks associated with the property and therefore provide clients with crucial expert knowledge for the homebuyer to make well-informed decisions. Patrick Lawler is Geology Data Specialist at Future Climate Info. 2016, N. (2016) Sinkhole at Magdalen’s close, Ripon. Available at: http://www.bgs.ac.uk/ research/engineeringGeology/shallowGeohazardsAndRisks/sinkholes/riponFeb2014.html (Accessed: 20 December 2016). 2016, N. (2016) Caves, subsidence and soluble rocks. Available at: http://www.bgs.ac.uk/ research/engineeringGeology/shallowGeohazardsAndRisks/sinkHoles/riponNov2016.html (Accessed: 20 December 2016). BBC (2016) Ripon sinkhole: British geological survey says area susceptible to holes. Available at: http://www.bbc.co.uk/news/uk-england-york-north-yorkshire-37962446 (Accessed: 19 December 2016). H.Cooper, A. (no date) Available at: http://nora.nerc.ac.uk/1479/1/iaeg2006_Cooper_ tripUK2a.pdf (Accessed: 20 December 2016).
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