Copy article

Rise in conveyancers refusing high-rise cases

ended 22. May 2023

Brokers have revealed a growing number of solicitors and conveyancers, due to the new building regulations on cladding, are refusing to work on high-rise property transactions. “Several law firms are refusing to accept new clients where the building is above 5 stories or 11 meters”, confirmed Chris Barry of Thomas Legal. UK newswire, Newspage, asked brokers and conveyancers for their thoughts on this, below.

9 responses from the Newspage community

Copy all

Star Quote
Copy

Editor
Chris Barry
Director at Thomas Legal
Several law firms are refusing to accept new clients where the building is above 5 stories or 11 meters. This is because the law firm has to satisfy building eligibility, qualifying leases and work around growing lender requirements. Professional Indemnity Insurance providers will be asking law firms how many properties they are transacting that are subject to the building safety act upon renewal. However, I don't think insurance and extended timescales are the only reason for withdrawing from the market. There seems to be a real lack of clarity around what happens in certain scenarios and it is this uncertainty that is encouraging a "wait and see" approach. As a firm, Thomas Legal has been very much on the front foot with the building safety act and has helped dozens of clients every week who are struggling to find a firm that can help them with what, in most cases, is their first purchase.
Star Quote
Copy

Hannah Bashford
Director at Model Financial Solutions
We have been advised that, due to the buildings act, there are now a lot of conveyancing firms that are no longer acting when a property is above 4 storeys, while those that are, are charging an extra fee. Luckily, having most of our clients in leafy Surrey and sunny Devon, this doesn't come up much but for the handful we do have it is going to be costly for them to remortgage. My concern with this is twofold: one, conveyancing firms are already stretched so how are they going to deliver decent service levels and not delay remortgages and purchases? And two, as an adviser it is going to become more difficult to recommend a remortgage over a product transfer as once you add in a further charge for this work it may be cheaper for them to simply product transfer.
Copy

Editor
Justin Moy
Managing Director at EHF Mortgages
We have seen a number of local firms refusing to take new cases, not just those instructions with cladding issues. Many firms are struggling to recruit sufficient conveyancers to keep up with even a muted level of enquiries, so we are utilising a number of trusted solicitors and conveyancer firms to help our clients with both remortgages and purchases. It's so important for buyers to check with their broker for a recommended conveyancer, not only to check on the building regulations situation but also to ensure the firm is on the lender's approved panel, too.
Copy

Editor
Emma Jones
Managing Director at Whenthebanksaysno.co.uk
This is frustrating and change needs to happen within the conveyancing and Land Registry process as it stands. Huge delays could be resolved by some smart tech. To refuse properties due to construction seems like a cop-out and those same clients that have been stuck due to cladded properties are once again being impacted.
Copy

Editor
Bob Singh
Founder at Chess Mortgages
Grenfell was a tragic incident and hopefully we won’t see a recurrence ever again. Quite rightly, it precipitated a review of all high-rise blocks to make them safer. However, the condemnation of all high-rise blocks with cladding could have been handled better. Knee-jerk reactions from lenders and surveyors blighted many homes. The situation has eased somewhat for certain blocks but the legal profession has been left to bear the responsibility to confirm compliance, and why not? Who better to confirm this? It’s their job after all. With stratospheric PI costs in the legal profession, I’m not surprised that firms are turning away this business or indeed charging more for their services. The competitive nature of the work has already trimmed costs and margins to the bone. For remortgages I prefer to use lender legals as they’re free but dealing with a decent law firm pays dividends. Maybe the aggregators can compile a list of law firms who want this type of business?
Copy

Jamie Lennox
Director at Dimora Mortgages
One of our clients experienced exactly this recently. A local law firm refused to act on a small block of flats and have a set rule that they are not currently dealing with leasehold properties. The reason given was that their compliance officer made the decision that they are not qualified to confirm if the property complies with the Building Safety Act 2022.
Copy

Rhys Schofield
Brand Director at Peak Mortgages and Protection
As ever, our government enacted a whole load of new legislation without thinking about how to implement it and it's causing a real headache with conveyancers. It's not surprising, then, if you're a conveyancer already at capacity working for peanuts, that you'll stop taking on work that could be a minefield. There are conveyancers who will take the work but that's where having a top-notch conveyancing panel manager for brokers comes in handy so that you can allocate the case to the right firm for your client.
Copy

Scott Taylor-Barr
Principal Adviser at Barnsdale Financial Management
The rumblings I have heard on many of the conveyancing forums suggest conveyancers feel overly exposed, with lenders seeming to have passed the responsibility of ensuring a clad property complies with current rules to them, which many conveyancers feel uncomfortable about. It is not their area of expertise and many feel the surveyors and lenders have sidestepped making the decision and simply passed it "down the line", in this case right into the lap of conveyancers who are left to explain to the customer the whole sorry mess. I'm not at all surprised to hear of some conveyancers turning this sort of work away, or charging a higher fee for the extra risk they are then carrying by doing it. While the cladding omnishambles is now being painted as "all sorted" by various government ministers, for those on the ground, and the poor folks still living in these properties, it is anything but.
Copy

Amit Patel
Adviser at Trinity Finance
Property transactions are getting increasingly complex and the regulations are becoming more burdensome. The fiasco with the EWS1 form is a great example. You now have some solicitor firms that will not represent a client if the building has cladding, as they do not want to open themselves up to a potential claim further down the road. Some firms even charge a premium if the cladding is involved. The blame for this whole fiasco lies at the feet of successive housing ministers as they keep sending mixed messages on the exact requirements.