Conveyancing: Backing for estate agent regulation
Seven out of 10 conveyancing solicitors do not want the government to introduce mandatory binding contracts for offers to buy homes, research has found.
The Law Society, which commissioned the research as part of its response to government plans to reform the home-buying process, said it would not support the move “in the current conveyancing system”.
Instead, the government should first reform the process “and then consider if the introduction of binding contracts would be beneficial”.
The society said it would not be possible to successfully introduce binding agreements until there was a “consistent high standard” of upfront material information across the whole market.
“If binding contracts are introduced before the other reforms proposed in the consultation, there is an increased risk of disputes.”
If the government went ahead anyway, the society said contracts should first be piloted and evaluated, while estate agents should not be in control of them. While estate agents did control them in Denmark, they were trained, registered and regulated there.
The society was responding to two Ministry of Housing, Communities and Local Government (MHCLG) consultations on conveyancing published in October – one dealing with the whole process and the other with material information for property listings.
We reported earlier this week that, in their responses, the Conveyancing Association opposed the introduction of binding offers, while CILEX said more work needed to be done on the “practicalities” in chains of transactions. The Council for Licensed Conveyancers supported the move if it allowed for “fair withdrawal”.
Some 69% of 210 solicitors surveyed by the Law Society were against binding contracts but there was “strong support” for government plans to regulate estate agents.
The MHCLG should prioritise this, it said, with mandatory training requirements and a code of practice for agents carrying out transactional tasks that affect consumer decisions.
The society supported the wider use of digital property logbooks and said the MHCLG’s proposed reforms “broadly align with our established position”.
Seven out of 10 conveyancers believed digitisation would “change their role in conveyancing”, but a third did not “feel ready”.
Three-quarters of conveyancers said they would be willing to accept instructions from a seller to prepare for a sale before a buyer was found.
The society said the proposed publication by the government of information about the services of property professionals would not “necessarily improve” the home-buying process.
Mark Evans, president of the society, commented: “We are pleased to see recognition that there is no silver bullet to improve the process, rather a need to streamline multiple parts of it without disrupting the property market in a negative way.
“The government’s consultation proposals lack detail and therefore make it difficult to comment on how valid and workable they are. It is vital that further consultations take place when these proposals are developed further.”
On material information, he added: “Delays and transaction failures are rarely caused by a lack of information at listing stage alone. They more commonly arise from late discovery of legal or financial issues, inconsistency of data, and a lack of early professional verification.
“Any reform should initially focus on limited, high-quality material information, improvements within the existing estate agent framework, and realistic lead-in periods that allow the market to adapt.”
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