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29th May 2024

James Vernor-Miles comments on leasehold reform in The Law Society Gazette

James Vernor-Miles comments on leasehold reform in The Law Society Gazette

James’ comments were posted in The Law Society Gazette, 24 May 2024, and can be seen here.

Keeping house

The low down

Conveyancing solicitors still talk of the satisfaction of securing a much-wanted home for clients whose life plans are heavily reliant on the transaction. It is a moment they need to savour. In 2023, 35% of transactions fell through. And for those deals that do get over the line, solicitors face enhanced personal risks, as they sign off on transactions where other professionals may have failed to play their part in providing reliable material information. In England, the Building Safety Act has made the sale and purchase of many flats ‘very, very difficult’. Solicitors find themselves ‘carrying’ people at conveyancing factories who may not even know how to exchange contracts. And the best thing that can be said about greater digitisation is that teething problems are to be expected.

Conveyancing has had a rocky ride post-pandemic. Rising interest rates and inflation have led to the number of property transactions falling year on year.

Data supplier Search Acumen noted in January that property law firms are handling 25% fewer cases than a year ago. The number of active property firms dropped below 3,900 for the first time in August 2023 and has remained there since.

Conveyancers cite burnout, stress and the fear of negligence claims as key reasons for leaving the profession.

Add into this mix the complexities of the post-Grenfell Building Safety Act (BSA), which applies in England, growing scrutiny of the home buying and selling process, and proposed leasehold reform, and it becomes clear why conveyancing as a profession is becoming a great deal more challenging.

‘Buying and selling leasehold in London has become very, very difficult,’ says James Vernor-Miles, partner at central London firm Hunters, by way of example. He notes that the BSA came with a lot of teething problems: ‘[Sales of] maisonettes in Victorian houses were stalling because of ignorance about fire safety regulations, and lenders and buyers were becoming very stringent because the BSA was an imperfect experiment.’

The lenders’ ‘part 2’ requirements, which require solicitors to provide confirmation of whether the act’s provisions have been complied with, became a major sticking point for many conveyancers. Some clarification has since been provided by UK Finance.

‘When the BSA was first passed, a lot of lawyers were saying that we are not going to act on these cases, because of how the lenders’ handbook interacts with the act. That vibe has passed now,’ Vernor-Miles says. ‘The BSA is like any legislation that’s put in place too quickly in reaction to an awful event. It is getting better now, as lenders, managing agents and councils come to terms with what the act was trying to do in the first place, which was to make everyone safer.’

Read the full article: Keeping house (The Law Society Gazette)