Conveyancing proposals could delay transactions, warns law firm

A leading legal firm has given broad approval to proposals from the Law Commission aimed at improving the conveyancing process and attempting to further combat property fraud. 

But the firm, Irwin Mitchell, is warning that one of the proposals - to subject conveyancers to new sets of standards - could backfire and lead to delays in transactions, rather than more efficiency.

Last week we reported that the Law Commission was issuing proposals in the light of the Land Registry being obliged to pay almost £60m in indemnity payments because of fraud over the past decade.

Its measures includes: 

- Enabling the Land Registry to set the reasonable steps that conveyancers must undertake to verify the identity of their clients, to help root out fraudsters;

- Imposing a duty of care on conveyancers with respect to identity checks, based on the directions issued by the Land Registry;

- Giving the Land Registry a right to recover costs from a conveyancer if that conveyancer fails to meet appropriate identify-checking responsibilities

- Creating a new power to introduce electronic conveyancing that does not require completion and registration to happen simultaneously;

- Beefing up the powers of Land Registration Division of the First-tier Tribunal (Property Chamber) – including an express statutory power to determine where a boundary lies, so that parties do not have to re-litigate the same issue.

Now Jeremy Raj, national head of residential at Irwin Mitchell, has generally welcomed the proposals but is warning that there have been “over-ambitious” goals for how electronic and online conveyancing would provide an instantaneous, digital and easy land registration system.

“The Law Commission’s latest recommendations are more grounded and limited in scope, focusing heavily on the fear of ever-increasing property fraud, and various other practical changes” he says in support. 

But he cautions: “The suggestion of another set of standards for conveyancers to adhere to however, is likely to increase administration and delays in the conveyancing process, and divert attention from the real objective of combatting fraudsters.

“Modern conveyancers have many masters, all of whom wish to set new agendas, whilst claiming to make things simpler and cheaper. The government should be wary of allowing the regulatory burden to increase without forcing all the interested parties to sign up to what is proposed.”