Property transactions in England and Wales got more complicated in 2013 as lenders more frequently introduced complex changes for conveyancers participating in their panels of approved lawyers, a year-end review of The Council of Mortgage Lenders Handbook by Lexsure Ltd. shows. The London-based company helps solicitors better manage their firm’s risk.
The CML Handbook provides comprehensive instructions for conveyancers acting on behalf of lenders in residential conveyancing transactions. The Lenders’ Handbook is divided into two parts. Part I sets out the main instructions. Part II details each lender’s specific requirements relating to those instructions.
“Just as the U.K. housing market rebounds, mortgage lenders are being more cautious in their policies, regularly introducing changes that make it all the more important that solicitors are aware of particularly onerous terms that an individual lender may impose,” said Simon Seaton, CEO and founder of Lexsure.
According to Lexsure’s review, 91% of CML lenders amended their Part II policies last year, with over 1,793 sections changed. This represents a 68% rise in policy change activity compared to 2012. Some of the more frequent changes focused on what documents the lender needs to send on completion and whether a lender accepts personal searches. The majority of lenders made changes in terms of obligations to make disclosures relating to properties where a Green Deal exists or where there are solar panels on the property.
Seaton points out that claims by lenders have accounted for around a quarter of all claims against the profession in the last four years with the majority of these emanating from residential conveyancing. “Conversations with professional indemnity insurers reveal real concerns that conveyancing claims are not set to fall away. The increased complexity and frequency of changes is only going to boost the possibility of claims,” he said.
The Handbook was introduced in July 1999 and was proclaimed as a welcome consolidation of lender requirements, “but instructions don’t stand still; they are constantly changing,” Seaton said. “Experienced conveyancers may take it for granted; some new conveyancers may not have studied the handbook carefully, both options are dangerous. Solicitors should not assume they know what the lender’s requirements are from one transaction