Research by the Consumer Panel - which advises the Legal Services Board, the regulator of lawyers - finds that "consumers assume all lawyers are technically competent and are subject to more regulatory controls than is the case. This means that quality considerations do not strongly influence consumers' choice of lawyers and people erroneously consider that all legal services are of proven standard."
Apparently, despite a proliferation of quality badges for lawyers, consumers do not use or want quality marks in legal services.
The LSB's reaction to this seems to be to propose yet another layer of regulation for an already heavily regulated sector.
Seems to me it would be better to educate the public that all lawyers are *not* the same - some are better than others, and it is better to make a choice based on experience or a genuine informed recommendation - rather than taking up the referral from the estate agent who is paid by the lawyer to make that referral
Still, I know I am a voice crying in the wilderness. Why on earth should a regulatory body resist the urge to gather more work to itself? It makes one wonder, though ...
Sunday, 21 November 2010
Tuesday, 8 June 2010
Another HomeMove forum query
In case it is of general interest, here is another query, and my reply, on the homemove.co.uk legal forum
The query:
Please help! conversion of house to flats and existing mortgage lender rules
Hello,
I'm tied in for 2 years into existing 230k mortgage on a house valued at 500k. Repayment penalty of 5%. That I've come to terms with.
I am getting planning permission to make into two flats to sell flat 1 and live in flat 2. Flat 1 worth 280k on sale and flat 2 worth 350k.
Therefore I pay off my mortgage or keep or take out a small one. I have a loan from my parents for the conversion.
Problem is I've found out I should tell my mortgage company. It says any building work have to tell. When should I and Will they say no? Presumably on making a lease the mortgage company finds out anyway on release of title deeds. I won't have the capital to pay off existing loan till sale and also very wary of idea of bridging loan at high interest rates.
Worried if I go ahead and build then the mortgage company might cause me problems. Is there any negotiation I can do? When I speak to my conveyancing solicitor what should he do? He suggested writing to my company but I'm worried it'll write off my plans completely.
The whole idea is on sale of the flat I'll pay off mortgage anyway and already face a big redemption penalty anyway. They will make 10k from me on redemption penalty.
What do I do? Any advice???
Please help.
My reply:
There are two aspects here -
1: It is likely that, if the lender does agree to you carrying out the work, it will convert your loan to a commercial (higher) interest rate and may charge an arrangement fee and re-valuation fee; it really depends on the lender
2: The lender will be worried at the risk that, partway through the conversion, you run out of money and leave the job incomplete, devaluing the property as a whole - that is the usual reason for a blank refusal. The lender is more likely to agree to the project if you can demonstrate that you have planned and costed it professionally and that the work will be supervised properly. You will need inspections under the Building Regulations anyway. I suggest that, rather than get the local council to do these inspections, you employ an "approved inspector" to oversee the project as a whole as well as dealing with the Building Regs inspections.
Before you do anything, though, try to speak to someone sufficiently high up at your lender's to explain your plans and find out whether they might agree and, if they migght, what information, paperwork, etc, they want to be able to consider it properly
The query:
Please help! conversion of house to flats and existing mortgage lender rules
Hello,
I'm tied in for 2 years into existing 230k mortgage on a house valued at 500k. Repayment penalty of 5%. That I've come to terms with.
I am getting planning permission to make into two flats to sell flat 1 and live in flat 2. Flat 1 worth 280k on sale and flat 2 worth 350k.
Therefore I pay off my mortgage or keep or take out a small one. I have a loan from my parents for the conversion.
Problem is I've found out I should tell my mortgage company. It says any building work have to tell. When should I and Will they say no? Presumably on making a lease the mortgage company finds out anyway on release of title deeds. I won't have the capital to pay off existing loan till sale and also very wary of idea of bridging loan at high interest rates.
Worried if I go ahead and build then the mortgage company might cause me problems. Is there any negotiation I can do? When I speak to my conveyancing solicitor what should he do? He suggested writing to my company but I'm worried it'll write off my plans completely.
The whole idea is on sale of the flat I'll pay off mortgage anyway and already face a big redemption penalty anyway. They will make 10k from me on redemption penalty.
What do I do? Any advice???
Please help.
My reply:
There are two aspects here -
1: It is likely that, if the lender does agree to you carrying out the work, it will convert your loan to a commercial (higher) interest rate and may charge an arrangement fee and re-valuation fee; it really depends on the lender
2: The lender will be worried at the risk that, partway through the conversion, you run out of money and leave the job incomplete, devaluing the property as a whole - that is the usual reason for a blank refusal. The lender is more likely to agree to the project if you can demonstrate that you have planned and costed it professionally and that the work will be supervised properly. You will need inspections under the Building Regulations anyway. I suggest that, rather than get the local council to do these inspections, you employ an "approved inspector" to oversee the project as a whole as well as dealing with the Building Regs inspections.
Before you do anything, though, try to speak to someone sufficiently high up at your lender's to explain your plans and find out whether they might agree and, if they migght, what information, paperwork, etc, they want to be able to consider it properly
Friday, 4 June 2010
Online advice
I contribute to an online advice forum at http://www.homemove.co.uk
A query that (to me, at least) was quite interesting cropped up today, regarding a breach of a restrictive covenant.
The query itself was:
"We purchased a converted barn 2 years ago and the developer (who also lived next door) suggested that we get a garden room extension when I said I wouldn't buy it as I wanted more room! We decided to do just that and got the necessary planning permission but have uncovered in the past few weeks that there is a restrictive covenant on the property for 5 years. Unfortunately, the developer has since moved away leaving no forwarding addresses (as we believe she is in debt) however she was the one to initally mention the extension PLUS she phoned to congratulate us on getting the permission AND she even wanted to quote for the business! Our solicitor made it out that it would be best to try to contact her which we have done via her solicitor. We know she has the letter but has not bothered to respond either way! She is reknowned for her lack of business acumen! We have just been told by our solicitor that we cannot even get an indemnity now because (we did what we were originally told was the "right thing") we have made contact with her. Is there anyway out of this mess? Surely, we must have recourse in some way that she cannot simply abstain from an answer? And given that we have verbal confirmation from her, can we rely on anything here? It would be greatly appreciated if anyone can help!! Thanks."
My reply was:
"I assume that it is the developer who has the benefit of the restrictive covenant, and the problem you have is that you are now trying to sell the property and the buyer is seeking evidence of compliance with the covenant in the form of a consent/release from the developer
"If so, I suggest you make a "statutory declaration", detailing exactly what happened, and detailiung the various ways in which the developer encouraged you to build the extension, knew of it and did not object and has failed to respond to correspondence.
"The point is that a court will not enforce a restrictive covenant if the person entitled to enforce it has connived in its breach, nor if they have simply sat back and done nothing in the knowledge that it is about to be or has been breached - the person with the benefit of the right musdt act reasonable promptly to enforce it - this is under the equitable doctrine of "laches" - the Wikipedia entery on this is very useful: Laches (equity) - Wikipedia, the free encyclopedia
"A sufficiently clear statutory declaration should be sufficient comfort to a buyer to enable them to proceed despite the apparent breach of covenant"
Whether my suggested solution will succeed or not, I cannot say, but at least it offers somed light at the end of the tunnel
A query that (to me, at least) was quite interesting cropped up today, regarding a breach of a restrictive covenant.
The query itself was:
"We purchased a converted barn 2 years ago and the developer (who also lived next door) suggested that we get a garden room extension when I said I wouldn't buy it as I wanted more room! We decided to do just that and got the necessary planning permission but have uncovered in the past few weeks that there is a restrictive covenant on the property for 5 years. Unfortunately, the developer has since moved away leaving no forwarding addresses (as we believe she is in debt) however she was the one to initally mention the extension PLUS she phoned to congratulate us on getting the permission AND she even wanted to quote for the business! Our solicitor made it out that it would be best to try to contact her which we have done via her solicitor. We know she has the letter but has not bothered to respond either way! She is reknowned for her lack of business acumen! We have just been told by our solicitor that we cannot even get an indemnity now because (we did what we were originally told was the "right thing") we have made contact with her. Is there anyway out of this mess? Surely, we must have recourse in some way that she cannot simply abstain from an answer? And given that we have verbal confirmation from her, can we rely on anything here? It would be greatly appreciated if anyone can help!! Thanks."
My reply was:
"I assume that it is the developer who has the benefit of the restrictive covenant, and the problem you have is that you are now trying to sell the property and the buyer is seeking evidence of compliance with the covenant in the form of a consent/release from the developer
"If so, I suggest you make a "statutory declaration", detailing exactly what happened, and detailiung the various ways in which the developer encouraged you to build the extension, knew of it and did not object and has failed to respond to correspondence.
"The point is that a court will not enforce a restrictive covenant if the person entitled to enforce it has connived in its breach, nor if they have simply sat back and done nothing in the knowledge that it is about to be or has been breached - the person with the benefit of the right musdt act reasonable promptly to enforce it - this is under the equitable doctrine of "laches" - the Wikipedia entery on this is very useful: Laches (equity) - Wikipedia, the free encyclopedia
"A sufficiently clear statutory declaration should be sufficient comfort to a buyer to enable them to proceed despite the apparent breach of covenant"
Whether my suggested solution will succeed or not, I cannot say, but at least it offers somed light at the end of the tunnel
Wednesday, 2 June 2010
Let us Tentertain you
Tentertainment is back! On Friday (evening) 2 July plus (all day) Saturday 3 and Sunday 4 July at the recreation ground in Tenterden, Kent (TN30)
It's Tenterden's free festival weekend with (new this year) a jazz orchestra on the Friday evening
Full details at www.tentertainment.org
It's Tenterden's free festival weekend with (new this year) a jazz orchestra on the Friday evening
Full details at www.tentertainment.org
Thursday, 20 May 2010
We was wrong!
Despite earlier confident predictions, Home Information Packs have been suspended with immediate effect - see here
Saturday, 15 May 2010
Home Information Packs - the latest
Thanks to Rob Hailstone of the Bold Group for this:
What is the Current Position?
HIPs have not been scrapped by the Election result. The law still requires a HIP to be in place to market a property. The penalties for non-compliance still apply.
Grant Shapps (the new Housing Minister), has said he will not condone non-compliance by Estate Agents who fail to order HIPs
Grant Shapps has committed to a full industry consultation before scrapping HIPs
The Coalition Agreement refers to scrapping HIPs in the Environment section suggesting more consideration has been given to this topic
Unless a suspension order for the scrapping of HIPs is announced HIPs will remain in place for the foreseeable future. Legislation to adapt or replace them will take some time to pass in Parliament
What Happens Next?
* The new Parliament will be sworn in next week from 18th May. The first Queen’s Speech setting out the initial legislative programme is expected to be held on 25th May. An Emergency Budget will be presented to the House in the first 50 days of the new Parliament and debates on its contents will dominate the initial period before the Summer recess
* The first parliamentary session will run from the end of May to November 2011 (which is the date of the next Queen’s Speech). This means that the Coalition Government has a longer time than normal to get legislation through the Houses of Parliament. This will allow a larger volume of legislation to be passed, particularly as there is a Parliamentary convention that the Lords will not oppose legislation based on a Manifesto Commitment. Ministers are likely to exploit these two factors to pass the complicated and potentially controversial legislation they believe to be necessary.
* We are unlikely to get significantly more detail on how the pledge to scrap HIPs will be taken forward when the Queen’s Speech is published – if indeed it does form part of the initial legislative package. The Speech itself is often little more than a statement of intent and many of the Bills listed in it may not be published until after the summer recess.
* The Conservatives have pledged a consultation on transition and any successive legal framework. It is unlikely that this will be reversed, especially as David Cameron and Nick Clegg have pledged to restore the public’s faith in politicians.
* The pledge on HIPs is unsurprising – it was a commitment delivered in both Parties’ Election Manifestos. The Agreement provides no additional detail on how this will be achieved or delivered. The inclusion of it in the Environment section rather than under deregulation is perhaps significant. It suggests that there is an understanding that scrapping HIPs cannot be undertaken in isolation. It has also been decoupled from the Great Repeal Bill – which has already been flagged as being a very early Bill to be introduced to Parliament ahead of the summer recess.
* The Conservatives have pledged a consultation on transition and any successive legal framework. As David Cameron and Nick Clegg have pledged to restore the public’s trust in politicians it would be a breach of faith if this was reversed.
Rob Hailstone
The Bold Group
www.theboldgroup.co.uk
What is the Current Position?
HIPs have not been scrapped by the Election result. The law still requires a HIP to be in place to market a property. The penalties for non-compliance still apply.
Grant Shapps (the new Housing Minister), has said he will not condone non-compliance by Estate Agents who fail to order HIPs
Grant Shapps has committed to a full industry consultation before scrapping HIPs
The Coalition Agreement refers to scrapping HIPs in the Environment section suggesting more consideration has been given to this topic
Unless a suspension order for the scrapping of HIPs is announced HIPs will remain in place for the foreseeable future. Legislation to adapt or replace them will take some time to pass in Parliament
What Happens Next?
* The new Parliament will be sworn in next week from 18th May. The first Queen’s Speech setting out the initial legislative programme is expected to be held on 25th May. An Emergency Budget will be presented to the House in the first 50 days of the new Parliament and debates on its contents will dominate the initial period before the Summer recess
* The first parliamentary session will run from the end of May to November 2011 (which is the date of the next Queen’s Speech). This means that the Coalition Government has a longer time than normal to get legislation through the Houses of Parliament. This will allow a larger volume of legislation to be passed, particularly as there is a Parliamentary convention that the Lords will not oppose legislation based on a Manifesto Commitment. Ministers are likely to exploit these two factors to pass the complicated and potentially controversial legislation they believe to be necessary.
* We are unlikely to get significantly more detail on how the pledge to scrap HIPs will be taken forward when the Queen’s Speech is published – if indeed it does form part of the initial legislative package. The Speech itself is often little more than a statement of intent and many of the Bills listed in it may not be published until after the summer recess.
* The Conservatives have pledged a consultation on transition and any successive legal framework. It is unlikely that this will be reversed, especially as David Cameron and Nick Clegg have pledged to restore the public’s faith in politicians.
* The pledge on HIPs is unsurprising – it was a commitment delivered in both Parties’ Election Manifestos. The Agreement provides no additional detail on how this will be achieved or delivered. The inclusion of it in the Environment section rather than under deregulation is perhaps significant. It suggests that there is an understanding that scrapping HIPs cannot be undertaken in isolation. It has also been decoupled from the Great Repeal Bill – which has already been flagged as being a very early Bill to be introduced to Parliament ahead of the summer recess.
* The Conservatives have pledged a consultation on transition and any successive legal framework. As David Cameron and Nick Clegg have pledged to restore the public’s trust in politicians it would be a breach of faith if this was reversed.
Rob Hailstone
The Bold Group
www.theboldgroup.co.uk
Friday, 7 May 2010
Home Information Packs - again
With the Conservatives and Liberal Democrats "promising" to abolish HIPs, it may instead be worth considering whether they can be improved to make them good value for money.
The recurrent problem we are experiencing at present is the delay in getting searches. We get sent a lot of incomplete HIPs, then have to keep checking to see whether searches are added. This seems to be because of the same old problem: selling down to a price, rather than up to a standard, and getting personal searches (as cheaper) rather than official ones. To my mind, this makes no sense: on the one hand, people get what they pay for and a cheap personal search is likely to be full of errors and omissions; on the other hand, most official searches are (a) speedy - speedier than cheap personal ones, certainly - and usually not very expensive. On the rare occasions we get asked to prepare a HIP, we always recommend official searches, in an effort to make them as exchange-ready as possible
The recurrent problem we are experiencing at present is the delay in getting searches. We get sent a lot of incomplete HIPs, then have to keep checking to see whether searches are added. This seems to be because of the same old problem: selling down to a price, rather than up to a standard, and getting personal searches (as cheaper) rather than official ones. To my mind, this makes no sense: on the one hand, people get what they pay for and a cheap personal search is likely to be full of errors and omissions; on the other hand, most official searches are (a) speedy - speedier than cheap personal ones, certainly - and usually not very expensive. On the rare occasions we get asked to prepare a HIP, we always recommend official searches, in an effort to make them as exchange-ready as possible
On a related aspect, many properties have more than one registered title, yet this seems to astonish amateurish HIP providers - I was having great difficulty explaining to one such earlier this week that my client's access and courtyard was in a different title to the house and, yes, both titles were essential
The single best thing that could be done to improve HIPs would be to require them to include a draft contract (omitting the price and buyer's details, of course) and a full property details questionnaire. This would make them virtually exchange-ready and would have the extra benefit of removing the need for the sale statement and the almost-useless property information questionnaire.
This will not happen yet, of course, as it would mean only solicitors and licensed conveyancers could prepare the contract part, though this should change next year, and there will never be agreement on what the PDQ should contain - unless the government actually thinks it worthwhile consulting the people who know: property professionals
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