The truth about conveyancing

Feb 17 | 2015

Following her article in The Mover in January, Bethany de Montjoie Rudolf CFILEx Soc Legal Services Consultant at De Montjoie Consulting Ltd tries to explain why conveyancing lawyers are not complete idiots.

It quickly became clear to me, during the ‘Moving Day Mayhem’ debate at the Movers and Storers Show, that there are huge misconceptions on both sides as to why so many difficulties are created for moving companies, by the current conveyancing market conditions.

It was obvious that the movers in the hall believed the lawyers to be lazy idiots, after all, only a complete idiot would tell their client that they had to move on the same day as exchanging contracts and only the laziest old fashion lawyer would go to lunch on the day their client is moving. 

So I thought it worth explaining a bit about why things appear as they do and try to convince you that we are not all complete idiots!

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From the moment a customer accepts an offer on their property, they are treading a tightrope.  Booking removals before exchange means that they may lose money if it falls through; yet leaving it until the last minute may mean that they will not be able to get removals at all. 

Until 18 months ago this wasn’t a huge issue because chains of transactions were short and conveyancers’ caseloads manageable.  Contracts could be exchanged within 6 to 8 weeks with completion 5 to 10 working days after to suit the people in the chain (long gone are the days of 28 day completions). 

Then came the upturn in the market and all of that went out of the window.  Suddenly, the media frenzy over rising prices, mortgage affordability and lack of available houses created panic; panic that estate agents tried to quell with regular updates yet were unable to get through to the conveyancers for progress reports due to the high volumes of calls. 

So what do the law firms do when overwhelmed with work?  They go to lunch!  Well not exactly, they ask their receptionist to say that they are at lunch, or put their voicemail on, so that they can catch up on the legal work uninterrupted by the phone, safe in the knowledge that they have instructed their cashiers to send out completion monies as soon as the incoming money arrives so that their completions are not held up.  This extra hour’s work in the day can be vital to reducing further delays in the process and is often on top of significant extra hours outside of 9-5.30 which many conveyancers do to keep on top of their workload. 

So in answer to some ‘Frequently Asked Questions’ at the debate …

1.   Why do conveyancers agree to exchange and complete transactions on the same day? 

This often happens where someone in the chain wants a completion date less than 5 days from when everyone is ready to exchange. 

Whilst Lenders can usually deliver mortgage monies on 48-hours notice, they will not confirm that mortgage money will arrive with the conveyancer on a specific date without 5 working day’s notice. Due to the risk of legal action against them, a conveyancer cannot bind a client into a contract which they cannot guarantee to be able to complete, e.g. if the mortgage monies are not guaranteed to arrive in time.

Parties in chains will therefore agree that they will request their mortgage monies for the agreed date but not exchange contracts until everyone has received their money. 

Conveyancers do try to avoid short completion dates.  It makes it very difficult to get all of the legal work done in time and puts unnecessary pressure on their cashiers. 

However, they are compelled to agree with their client’s wishes particularly if the transaction has been delayed or the chain are threatening to pull out. 

If all of the people in the chain are able to move, physically, legally and financially then the conveyancers are at risk of a complaint to the Legal Ombudsman if they refuse to agree to their client’s wishes. When you realise that a complaint to the Ombudsman, whether it is upheld or not, will cost the law firm £400 you can understand why the conveyancer feels caught between a rock and a hard place.

Why do lawyers delay the release of monies on the day of completion?

20 years ago, I could often been seen racing across the fairway at Broome Manor Golf Course on a Friday, clutching a money release request, chasing down the Senior Partner who had snuck off for a round of golf without signing a vital piece of paperwork.

Thankfully with the advent of online banking those days are gone and, due to the impact on their client’s and the conveyancer’s day if a completion is delayed, conveyancers treat completions as priority and will ensure that the completion paperwork is prepared the day before completion wherever possible. 

A delayed completion can take hours to manage and resolve which, with lawyers working on fixed fees for conveyancing cases, is money down the drain. Their cashiers are instructed to automatically release funds where everything is ready for a completion and constantly check to see whether money coming from below them in the chain has been received so that they can send it on as quickly as possible.

The difficulty is either with the length of the chain or delays at the bank.  If there are 7 houses in a chain the monies have to start moving pretty early to ensure that everyone moves that day but you can guarantee that the keys for the final property are unlikely to be available before 3pm and we know how frustrating that is when you have a road train of furniture to unload before it gets dark. 

Delays at the bank are often unfathomable for all concerned.  I have been witness to situations where my firm instructed the Bank to send monies at 8.30am in the morning, which the bank then described as ‘lost in the systems’ for 4 hours with no explanation and no recourse.  Other times monies are delayed because the bank has identified something that triggers their anti fraud procedures, despite the fact that as lawyers we have already identified our customers and established the source of their funds. The difficulty with these processes is that they are, by law, not allowed to tell us that they are verifying the payment as it would be ‘tipping off’. 

3.   Why do lawyers go to lunch when they have completions?

Well in fact, most lawyers rarely leave the office at lunchtime. If your customer is told that their lawyer is at lunch, the next best question to ask is “Can I speak to the person in charge of my completion?” as any conveyancer worth their salt would not even pretend to be on lunch without passing responsibility for completions to someone else. If you do have a local lawyer who actually shuts their reception at lunchtime then recommend to your customer when you take the booking that they ask their conveyancer for a direct dial phone number to the person who will be managing their completion on the day.

4.  Why do my customers tell me that their lawyer has ‘told them’ the Completion Date even if it is not convenient for them?

This is definitely a misunderstanding.  Whilst a lawyer will advise a client on completion dates, the date has to be agreed by everyone in the chain and the conveyancer is duty bound to act in the best interests and on the instructions of their client.

Completion dates are usually agreed either based on someone having a specific date in mind or the most convenient date for everyone in the chain. Unfortunately these aspirations do not always match up and often compromise is required. You occasionally get someone who refuses to compromise or an immoveable date and the chain is told ‘You move on my date or the chain collapses’.  It is then up to the client to decide whether they call their bluff or go along with this unreasonable individual just to get the deal through.  Then they would certainly feel like they have been ‘told the completion date’.

So, I hope this has helped explain why conveyancing lawyers are not lazy idiots, and that actually they are in the main hardworking, practical and highly professional individuals doing the best job they can with the system they have got. And this is where we can work together to change the system, to understand the constraints each party is under and come to some common ground that will make the house moving experience a positive one for everyone.

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