Conveyancing has been in the property news a lot lately. It seems likely that thousands of transactions will have failed to meet the Stamp Duty holiday deadline at the end of last month.
While not entirely the fault of the conveyancing process – the Stamp Duty holiday has created unprecedented demand to buy houses – it does raise an important issue which has been around for years. Just why does conveyancing in English law take so long and what, if anything, can be done to speed it up?
Let’s take in a few thoughts on what are the big problems with conveyancing:
* Conveyancing doesn’t really start until a sale is agreed, or even some weeks after a sale has been agreed.
* The basic legal principles of conveyancing are much the same today as they were decades ago, if not longer.
* Conveyancing is a complex chain, even more complex than a buying and selling chain itself. There are so many different tasks and different parties – buyers, sellers, lawyers, lenders and public bodies. This creates so much potential for delays and things to go wrong.
* Conveyancing is a competitive business. Solicitors and conveyancers compete on price and sometimes that means the process isn’t as well resourced as it might be. (A lack of local authority resources to conduct local searches has also been an issue in recent years.)
* Consumers generally don’t know how conveyancing works. So they’re not well prepared to work with the process. (There is possibly a matter of perception too. People assume that a big, important purchase should take a long time to complete. Yet it has been possible to handle high value share transactions quickly for decades.)
So how might the conveyancing process be speeded up?
* More of the necessary work could be done before a sale is agreed. Home Information Packs or HIPs were an attempt to do this but were dropped in 2010 after only a year.
That doesn’t mean, however, that the basic principle of providing and concluding much more information before a sale is agreed rather than after couldn’t work.
* Measures to minimise the things that can go wrong. As things stand, anybody can agree to buy or sell a house and then seek to change the terms of the deal, or back out, on the day it is due to go through.
Some kind of legally binding pre-contract agreement might help here. (Although these are legally possible already but there does not seem much willingness to use them more widely.)
* More use of online technology. Much has been done in recent years to move conveyancing processes online in the hope of making them quicker. But conveyancing is still basically a paper-based system that has been adapted for online .... and there is still a lot of paper! An online conveyancing system that is designed for online might help.
Making use of online technology, however, has legal and other implications which are much wider than just conveyancing alone. For example there are issues over ID, online documents and online signatures, money laundering and fraud prevention measures.
* Conveyancing should perhaps be more expensive! This is an issue that has been overlooked by most. But it would mean that solicitors, conveyancers and others would then be able to devote more time and resources to it.
Speeding up the conveyancing process, or even complete reform, has been something that has been suggested for many years. But it’s fair to say with not all that much progress. (Scotland’s conveyancing system is often thought to be much more efficient but there seems to be no interest in adopting it for England and Wales.)
In 2017 the Ministry of Housing, Communities and Local Government issued a so-called call for evidence which sought the views of industry and public on how the home buying and selling process could be improved and which partly considered conveyancing. The broad outcome, however, was that the Government felt conveyancing could be improved by a series of tweaks rather than wholesale reform.
Recently, a number of organisations in conveyancing (The Law Society, The Society of Licensed Conveyancers, The Conveyancing Association, CILEX and the Bold Legal Group) have agreed to work together as a Conveyancing Task Force to discuss reform and enhancement of the conveyancing process. (The body has taken two years to agree terms of reference, however!)
The issues the Conveyancing Task Force will be considering include: Proof of identity, universal protocols, buyers’ and sellers’ property information forms, codes of practice, electronic signatures, lenders handbook requirement and review, property log books, fraud prevention, property search, vendor disclosure and client communication and guidance.
Also very recently the Law Commission has suggested that it might look at the home buying process as part of its upcoming 14th Programme of Law Reform.
Most people would agree that there are lots of possible advantages of speeding the conveyancing process up. The less time conveyancing takes the less likely a sale is to fall through. The whole process would be less stressful for everyone. It might even mean people are more likely to buy or sell a property. At the moment, however, it seems that it could be some time before there are any significant changes to the conveyancing process.