Conveyancers have considered whether the long-standing ‘caveat emptor’ or buyer beware principle in a property purchase should be replaced by ‘vendor disclosure’ with the emphasis on the seller.
At a roundtable of conveyancers and other players in the transaction process, it was discussed whether the emphasis should switch to the seller to keep some form of logbook and disclose it to a would-be purchaser - with failure to do so allowing the buyer to withdraw from the deal without penalty.
A report from the Council for Licensed Conveyancers, which hosted the roundtable, reveals the discussions that were held.
The pandemic has seen HM Land Registry progress rapidly with electronic signatures, and 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 is committed to ensuring that regulation supports innovation that improves client service and protection, and conveyancers’ ways of working. We will continue our close collaboration with those who took part in the roundtable, the firms we regulate and other innovators as well as the Home Buying and Selling Group to ensure our regulation is proportionate and risk-based.”
This is a summary of the discussions produced by the Council for Licensed Conveyancers; a more detailed write-up of the roundtable can be found here.
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As we estate agents well know, Caveat Emptor flew out of the window years ago, the first inroads into it being the PMA and more recently CPRs which mean that non-disclosure of anything that may effect a buyer's transactional decision - and that's a great deal of things - when purchasing a property is a criminal offence. A bit weird that some senior conveyancers/solicitors are only just picking this up; "I think we have to CONSIDER moving towards a vendor disclosure process". Very worrying, actually!
Well they have always been late to the party, interesting that as they say it took a 'global pandemic' to get things moving OMG.
We have been banging this drum for some time. Not many Estate Agents have been in a rush to make a change to get Vendors better prepared for a move, so lets not start throwing stones :-)
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