Welcome back– sorry for the short delay but that’s conveyancing. Following on from my last article, there are a few more issues that can lead to delays in the conveyancing process that need to be addressed.
Deeds delays
An issue that has to be contended with when dealing with conveyancing is that of deeds. Deeds are received relatively quickly from most lenders. However, some aren’t that quick and some don’t or won’t send the deeds to the seller’s solicitors but will only give a title number for the Land Registry – not really satisfactory but just about workable.
However, we now come face-to-face with the ogre of ‘dematerialisation’. This is not a pretty word but it means that more and more lenders are not willing to store deeds. They don’t even want to keep the Charge Certificate itself. This is now causing problems and delays as important documents such as leases and all sorts of other title documentation are being sent to the sellers to keep safe. This is okay in theory, but if your clients are anything like me they won’t necessarily remember where they keep all their papers and even if they do, they certainly won’t understand their significance. It’s a grand idea of lenders not to take up expensive storage space with thousands of deeds and staff to archive and recover them and certainly it is in the spirit of e-conveyancing that the whole process should be a paperless transaction, but we are not virtual yet and there are problems occuring now where no one is sure where certain documents are.
At this stage of the transaction (two to four weeks in) we may not have even got off the starting block then. The buyer’s solicitors, who clearly have a responsibility to their lay and lender clients to investigate title may be waiting for the local search and contract from the seller’s solicitors. Assume, however, that contract and search are in – what then?
Title delays
This is a real humdinger of a delay factor and it’s all totally legitimate and therefore even more frustrating for the parties because they can’t really blame the lawyers.
It sounds very grand to say that the buyer’s solicitor must investigate title. Of course they must to protect their client borrower and also their client lender. But what does it mean?
The vast majority of property in this country now is registered land. As time goes by, all property will be registered although we’re not quite there yet. The fundamentals of investigating registered title is quite simple. You need to check the property is owned by the sellers by checking they are named as registered proprietors.
That is quite simple, but here’s the rub. Unfortunately the title to any land normally refers either to some earlier document in which various rights or obligations are set out or the title itself sets out those rights or obligations. These can vary enormously from permission to enter neighbouring property through to setting out what you cannot do with the property. The buyer’s solicitors have to read any provisions and make sure that the seller’s existing use of the property is not in breach and ensure these provisions are pointed out to their own clients. Sometimes it is simple to be satisfied on these counts, but more often than not the answers cannot be found from the title itself and enquiries about matter of title have to be raised with the seller’s solicitors. For example, the deeds may say that the owner is required to make a contribution towards the upkeep of common boundaries or party walls. The only way in which the buyer’s solicitors can find out if any contribution has been paid is to ask the seller through their solicitors. The result of any investigation of title is therefore likely to lead to a number of questions being raised by the buyer’s solicitors with the seller’s solicitors.
It is not uncommon for 20 or more routine questions to be asked. Some can be answered by a yes or no but others require documentation. So despite the property being registered, it is invariably the case that enquiries will be raised with the seller which could delay the transaction.
Investigation of title has in fact become more difficult as a result of some perverse decisions of the courts – there used to be a common convention that if building work was carried out on a property more than four years ago then the local authority couldn’t take enforcement proceedings and therefore the legal profession was quite relaxed about the lack of building regulation approval.
Then a case came to court and the court pointed out that any council could take injunction proceedings at any time for any infringement (not that they were likely to) and suddenly all the solicitors in the land are having to enquire back to the year dot about building approval for the extension.
In practice very few people keep all documentation at home particularly if they inherited the extension rather than built it themselves and so either a lot of time and money is spent in applying to the local council for a copy of the approval or in practice the sellers have to take out some form of insurance to cover the lack. In reality the courts have not only gifted the insurance industry a nice little earner but have created yet another little piece in the delay process.
So despite all the vaunting about the simplicity of registered land, because of investigations needed to be made by the buyer’s solicitors as a result of custom and court cases, it really isn’t that simple.
But it is much simpler than dealing with a leasehold property – step up delay number five next month...
