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Conveyancing bill would impose minimum standards

By Monidipa Fouzder  >>

MPs have presented a bill to parliament that would impose minimum standards on conveyancers to protect homebuyers from ‘unscrupulous’ developers.

The Conveyancing Standards Bill is a private members bill introduced to the Commons last week under the Ten Minute Rule. While it is unlikely to become law, it could indicate the appetite for reform of the conveyancing process in England and Wales.

Marco Longhi, Conservative MP for Dudley North, said he was proposing the bill because homebuyers were being ‘financially exposed’ by a system ‘being gamed by unscrupulous developers and contractors, because it is not transparent enough to shine a light on the potential risks to people when they are buying a property’.

Longhi said: ‘People might feel that the very fact that a solicitor is handling the conveyance means that they are sufficiently protected. They employ a solicitor not just to carry out due diligence for them, but to highlight any potential downsides. That is not happening with enough robustness, and that is why I propose the bill.’

The Dudley North MP gave two examples. One was a developer who purchased land and applied for planning permission, which was granted subject to conditions. The developer set up a limited company for the sole purpose of development and marketing the site almost immediately. When the final plot was sold, the developer immediately liquidated the company. However, several planning conditions were not met and the homebuyers were unaware that any regulatory liabilities relating to the properties transferred to them at point of sale.

A second ‘more widespread’ example was issues in relation to the ‘small print’ of a maintenance contract. The contract owners could increase the annual price but there is no recourse within the contract for poor workmanship. The contract states that a charge will be placed against the property, so it cannot be sold without payment. ‘Furthermore, homeowners cannot complain to anybody, because an unresponsive contractor is virtually unaccountable and has plenty of legal cover, while homeowners are usually bounced around from contractor to subcontractor to developer in a neverending merry-go-round,’ Longhi said.

‘Those two scenarios are real. The same thing has happened in Dudley and to other people from the Black Country whom I have met.’

The bill was presented by Conservative MPs Longhi, Nicola Richards (West Bromwich East), Gareth Bacon (Orpington), Sir John Hayes (South Holland and The Deepings), Peter Gibson (Darlington), Sir David Amess (Southend West), Lee Anderson (Ashfield), Paul Howell (Sedgfield), Ian Levy (Blyth Valley), Sally-Ann Hart (Hastings and Rye), Liberal Democrats Jamie Stone (Caithness, Sutherland and Easter Ross), and the Democratic Unionist Party’s Jim Shannon (Strangford).

It will have a second reading on 27 November.

(Courtesy: The Law Society Gazette)