Conveyancers face ‘too many complaints’ about undertaking breaches

The Council for Licensed Conveyancers (CLC) has warned it is receiving “too many complaints” about breaches of undertakings by solicitors.

The regulator warns these breaches can mean property sales fail to complete as conveyancers don’t honour their promises such as transferring funds.

The issue was highlighted in the CLC’s 2023 Risk Agenda.The annual publication brings together a list of the biggest risks faced by the CLC’s regulated community, which emerge during its regular monitoring and inspection work throughout the year, along with advice to help practices stay on the right side of compliance.

Other areas covered include anti-money laundering (AML), conflicts of interest, sanctions, the Accounts Code and complaints handling.

Breaches of undertakings are a new addition this year. 

The CLC said: “This is of significant concern; the property transfer system will break if conveyancers do not adhere to undertakings,” it says. The CLC intends to run a webinar on the issue later in the year.

While neither the CLC nor its disciplinary committees has power to direct the specific performance of an undertaking or to direct the payment of compensation to a third party, the breach of an undertaking may lead to disciplinary proceedings, the CLC said.

The Risk Agenda warns: “The CLC is escalating its activity on this issue and tracking practices where we are seeing repeated or systemic breaches.”

Elsewhere, conflict of interest issues were also identified as CLC-regulated practices are allowed to act for more than one party to a transaction with informed written consent.

The CLC Adjudication Panel last year reprimanded and fined a licensed conveyancer who failed to inform clients in three matters that she had been asked to act for another party in the transaction. She was the sole conveyancer in the practice, meaning she would personally be undertaking the work.

She believed she was acting in both clients’ interests by doing so as the transactions would proceed more quickly. The panel found there was “no way” in which the potential conflict could be surmounted in such a situation.

On AML, the Risk Agenda also outlines concerns that conveyancers are often not undertaking matter-based risk assessments because they do not perceive a transaction to be risky. 

Sheila Kumar, chief executive of the CLC, said: “Conveyancers are at the frontline of the battle against economic crime and as a result the pressures on them are considerable. This latest iteration of our Risk Agenda looks to pinpoint the particular problems we are finding in this and other areas of practice and explain how best to resolve them.

“This is core to the CLC’s approach of assisted compliance: working with practices to identify and address risks before they crystallise as harms. This collaborative approach to achieving compliance is a unique strength of the CLC model and is successful in resolving the vast majority of issues that we find.”