Jennifer Veitch: Why the art of conveyancing just can't be a commodity

Published on Sunday 7 December 2008 20:29

FROM last Monday, anyone selling a house in Scotland now has to put it on the market along with a home report – a pack containing an energy report, a property questionnaire and, of course, the controversial single survey.

Following concerns from many that the cost of single surveys will deter potential sellers, damaging the ailing residential property market still further, the Law Society is pushing for an "early review" of the scheme.

While the society has supported home reports, as far as many solicitors are concerned, their introduction could not have come at a worse time. With the economy now in recession, firms are being squeezed by greater competition; moves towards outsourcing and volume work in conveyancing look set to increase the pressure still further.

But now, residential property solicitors are stepping up efforts to warn that clients could also suffer from further moves towards commoditisation of conveyancing.

According to Marjorie Townsend, an Edinburgh residential property lawyer who will become a partner in Leslie Deans & Co in May, consumers may not yet realise the pitfalls attached to volume conveyancing.

"While this business model has worked for mortgage lenders for high-volume remortgage transactions, outsourcing of conveyancing is inappropriate for the public and not in line with the aims of the Clementi report to provide high quality and equal value legal services for all," she says.

"When buying a house we want an experienced professional with in-depth knowledge of the market and strong professional relationships with surveyors, banks, specialists and contractors. We want someone we can trust who is independent and acting solely in our interest with integrity. Anyone has to know exactly what he or she is buying and have full, detailed information regarding the title and conditions of ownership."

She adds: "In England, where estate agents control the market, conveyancing has become more of an add-on commodity. However, there is no reason for this to happen in Scotland, where the role of the solicitor is completely different. He or she is involved with the transaction from the start when the offer is made, negotiates the price and date of entry, and acts with your surveyor to ensure any aspects of concern are reflected in the negotiation and the contract."

Townsend points out that solicitors advise on an array of issues ranging from property defects, such as damp or dry rot, to unauthorised alterations and planning, access rights, factoring charges, servitudes, matrimonial occupancy rights, deeds registration, community burdens, and prescription of title.

She contends there is no evidence that the public want conveyancing dealt with separately, or "at a lower level, outsourced to another firm" and warns there are limits to how much transactions can be standardised.

"Speeding up the form-filling process does not remove the need for legal advice and property expertise," she says. "Mistakes in property transactions can be extremely costly and risks are high. However, a few bad dentists do not mean that we should all go to Asda to get our teeth fixed.

"The profession has over-reacted to the Clementi review which I don't believe ever intended that Scottish conveyancing should be outsourced to volume providers."

Leslie Deans, senior partner at Leslie Deans and Co, agrees residential property is too complex and important to clients to be dealt with through volume work.

"Property law is not just a case of ticking a few boxes and filling in a few forms – there is more to it," he says. "There is often litigation in the courts about cases of a conveyancing nature. I have been a property solicitor for 35 years and I can see the complexities.

"We have had legislation such as the Tenement (Scotland) Act, which has been of considerable benefit in clarifying certain areas of the law. But there will always be disputes between people which could lead to litigation, and if someone has been advised in an amateurish fashion they are perhaps at a greater degree of risk."

Deans adds that moves to deregulate the market may not produce the cost-savings consumers might want to see. "There is a fallacy that commoditisation would lead to a reduction in costs – I don't believe that will happen," he says.

"Solicitors active in the property market have to be competitive and make sure their costs are fair. In Edinburgh there are 230 member firms of the ESPC and these firms are competing with each other. Anyone who's not competitive will just not survive."

However, Deans suggests that solicitors should shout louder about the benefits of the conveyancing service. "The profession could do more to explain to the public what it does – there must be, I believe, an awful lot of the public who don't know what solicitors do."

There are firms now trying to reduce the costs of conveyancing without outsourcing. In Edinburgh, Warners and Neilsons recently carried out their first paperless property transaction using the new Automated Registration of Title to Land (ARTL) scheme.

This enables solicitors to carry out land transfers online, rather than having to apply in writing to the Registers of Scotland – and will speed up the process and reduce costs.

Jason Scott, partner at Warners who oversaw her firm's first ARTL purchase, says: "With the scheme, the whole thing is done in 24 hours, so it's a major change to the process. Not only will it mean that a transaction can be done quicker than before, but it is also cheaper for the client. That must be welcome news for buyers and sellers everywhere."

Steve Spence, senior partner at Neilsons, adds: "It makes sense to have a situation where two solicitors doing the necessary work to make a property registration themselves and not waiting for paperwork to be sent back and forth.

"It is only a matter of time before solicit-ors across the country start embracing this technology and using it in all their transactions. It could revolutionise the handling of property transactions in Scotland."