Conveyancing: price transparency and legal advice

Continued concerns in relation to price transparency in property transactions, and the legal advice purchasers receive during a transaction, have been highlighted by the SRA in its thematic review. We look at the headlines of the review and the implications for conveyancing practitioners.

What led to the SRA review?

Out of all complaints handled by the Legal Ombudsman in the past three years, nearly a quarter related to residential conveyancing. Last year, the SRA itself carried out research with consumers and found that a quarter of recent house buyers were not satisfied with the service they received from their solicitor. A particular concern related to “an apparent failure to fully explain the detail and implications of contractual commitments”.

This research was followed by a ‘thematic review’, which involved the SRA visiting 40 residential conveyancing firms and conducting a detailed review of 80 case files.

What did the SRA find?

It found a number of areas of concern, notably:


  • In 34% of case, the initial quotes did not include fees for additional work which should have been reasonably anticipated at the outset, eg. fees for bank transfers and accessing online portals and electronic ID checks. A significant amount of these additions could have been anticipated at the outset, so firms could potentially be providing unrealistic initial quotes in order to win business
  • 37% of firms failed to be transparent about the mark-ups they added to the bank’s telegraphic transfer fee (some clients were charged as much as 10 times the fee set by the bank)
  • Some solicitors failed to properly explain the long-term implications of complex contractual clauses, with solicitors in 23% of leasehold purchases not explaining the difference between freehold and leasehold ownership
  • Fee earners failed to routinely keep telephone notes of key conversations held with clients throughout the conveyancing
  • 91% of firms said they had received requisitions from Land Registry that could have been avoided


Is it all ‘bad’?

No, the SRA commended all the firms it visited for “proactively communicated with clients at key stages”. It also noted that firms are increasingly innovative technology in their communications with clients, such as text and social media. All firms also had appropriate structures, training and supervision arrangements in place to help maintain competency.

Also, there was no evidence of firms inflating their fees after the initial quote - without explaining the reason for the extra costs.

What does this mean?

The SRA noted that the review, though limited to a small number of firms, “clearly found that in the majority of cases conveyancing firms do actively engage with their clients and have processes in place designed to fulfil their obligations”. However, it cannot ignore those cases where “the public feel let down by their solicitor or lack the information they need to make informed decisions”.

The SRA says it will now be monitoring firms’ websites more closely as to how they are publishing their conveyancing prices, services information and online complaints procedures. The SRA has referred six law firms to its internal disciplinary processes as a direct result of its review.

You can read the full SRA report here.

 

 

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