The conveyancing system needs streamlining, not legislative tinkering through the seller’s pack, argues Stuart Goldenberg
The DETR has issued new research extolling the virtues of the seller’s pack and the success of its Bristol experiment with the pack. But is it the right approach to the task of accelerating the conveyancing process?
The idea behind the seller’s pack – the seller provides interested parties with a survey of defects – runs against the principle of “let the buyer beware”.
No one knows when a private treaty sale might take place and searches, surveys and replies to precontract enquiries have a life of three months or so.
So not only are sellers liable for the additional cost of hundreds of pounds for a seller’s pack, but if they do not find a buyer within a short time, they must stump up the same money again. And again.
Alternatively they can wait until an offer is received and accepted, but then the deal will be exposed to a significant delay before a contract can be issued. And if the buyer backs out, the seller is back to square one.
Lenders require a valuation report
The lending institutions are not about to accept a vendor’s survey; what they require is a valuation report, in which the condition of the property is probably expressed in little more than the answer to a multiple-choice question: good, bad or average.
Land Registry searches are available online and local authority searches are following suit. So why do conveyances take so long? Because conveyancers are not placed under time constraints. On the contrary, they are being so squeezed, in order to minimise fees, that they may be unable or unwilling to provide an efficient service.
The time it takes to prepare, read and turn around the paperwork is crucial to a transaction, yet it is not being addressed.
Certainly the seller’s solicitor should provide service charge details and replies to pre-contract enquiries with the deeds and contract. However, their counterpart is more than likely to come up with a further batch of “additional enquiries” anyway.
Generally, only first-time buyers are not in a chain and a seller’s pack will not fix a chain with a broken link. The government’s plan to encourage “chain-breaking loans” is just bridging finance with a different name, and a recipe for financial disaster.
The uncertainty of a sale is only extinguished when a binding contract is exchanged, and there are only two ways to achieve this more quickly.
The first is for conveyancers to make full use of technology:scanning, e-mail documentation and correspondence and online searches of Land Registry and local authority records. The documentation they use, including contracts and pre-contract enquiries, needs to be standardised to a form accepted by the lending institutions, which should work to structured timetables.
The second involves an overhaul of the registration of land and of the conveyancing process. For example, in the US an offer is made in writing, and if it is accepted a contract exists immediately, conditional on title, funding and surveys of condition and services. They do not know about gazumpers, gazunderers or time-wasters.
The seller’s pack is an ill-conceived headline-grabber, which, far from speeding up conveyancing, will actually slow it down and add to the seller’s costs.
Stuart Goldenberg FRICS IRRV FRSH is a chartered surveyor and the senior partner of Goldenberg & Co