Time for vendor disclosure to replace caveat emptor?

Kumar: Change is inevitable

The longstanding principle of caveat emptor could be displaced by vendor disclosure because of the rapid adoption of technology due to lockdown, experts have suggested.

This would put the onus on the seller to ensure that they have provided all the information required – and keep it updated – with failure to do so allowing the buyer to withdraw from the deal without penalty.

The Council for Licensed Conveyancers (CLC) organised a roundtable to consider how Covid-19 had impacted the predictions in its Conveyancing 2030 discussion paper, published in January. This said the role of the conveyancer was undoubtedly going to change as much of the administrative side of the job becomes automated over the coming years.

Participants in the roundtable indicated that this process was speeding up, with HM Land Registry progressing rapidly with electronic signatures.

Deputy Chief Land Registrar Mike Harlow said it was also promoting digital ID checking as part of efforts to “galvanise” the market.

“You would never have wished the pandemic, obviously, but in some respects, it has given us a shot in the arm to actually get on with some of these things rather than talking about them and waiting for the perfect moment to introduce them.”

Mark Montgomery, chief strategy officer at Simplify, one of the country’s largest conveyancing businesses, said the main drag on adoption at the moment was firms simply being too busy to contemplate it, given how the property market has rebounded since it reopened in May.

But he suggested too that there was “two-speed industry”, with some firms recognising the need to change the way they operate – including home working – and others not. “It’s tough to see where the second group will be in six or 12 months’ time,” he said.

Scottish solicitor and professor Stewart Brymer said technology was changing the conveyancing process. “The way I was taught to examine a title was that you worked on the basis of caveat emptor, all the information is thrown at the purchasing solicitor who wades through it, raises queries, some of which will be answered, some of which won’t.

“But now this information comes faster and is more accurate, so I think we have to consider moving towards a vendor disclosure process instead. Giving people more information will speed up the process – without it, we can have all the little digital bits, but they’re not connected and they will be used in the old-fashioned way.”

Beth Rudolf, director of delivery at the Conveyancing Association, asked: “Should we think about the idea of vendor disclosure meaning that, actually, you provide what the buyer needs to see anyway, and caveat emptor is really just that tick at the end to say, ‘I got everything that I need to look at to answer the questions of my client’?

“I think we have the opportunity now to start taking stock and saying, ‘What should we be doing as a professional to provide the best possible comfort for the consumer? Should we be asking all the questions that we ask and just telling them that information, or should we be asking them what questions they want us to ask?’”

Participants were clear that conveyancers would still have a central role in shepherding consumer through the process.

Stuart Young, managing director of Etive Technologies – which creates online property log books – said that, because of the need to interpret the data, he considered that “the role of the conveyancer has actually never more important”.

CLC chief executive Sheila Kumar says: “Covid-19 has made many conveyancers realise that they need to embrace new ways of serving their clients. Immediate pressures from the current activity in the property market should not detract from practice engagement in the new developments as the roundtable has served to confirm the findings of our discussion paper that change is inevitable.”

The CLC website features a longer report of the roundtable.

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