When it comes to improving the home buying and selling process, momentum gained has to be momentum sustained, and the recent White Paper on Levelling Up appears to provide the industry with the opportunity to maintain our momentum. However, at the same time, it needs full transparency on what is required.
For instance, the Levelling Up Paper talks about Government and our industry working together “to ensure the critical material information buyers need to know…is available digitally wherever possible from trusted and authenticated sources, and provided only once”.
This is tacit agreement that the system is not working in this way. That the “critical material information” is not being supplied to potential buyers at the very earliest stage of engagement. That the information which is provided often comes with a number of caveats which often leads people not to trust it, and therefore to feel the need to secure that information multiple times.
We know the problems this engenders in our process, not least in terms of multiple workloads for practitioners who are forced to obtain the same information that the mortgage broker, lender and their valuer also need, but also the fact that consumers are already far down the road in terms of their purchase ambitions, having put in an offer, having it accepted, paying for searches and the like, before they actually get the information they require. Worse still, the information may needlessly throw a spanner in the works and cause delay because the conveyancer needs the lender to ask their valuer if they are okay with it.
There is also another point within the Levelling Up Paper and that is, “if necessary, the UK Government will legislate”. Given the situation within our market, I can understand why the Government might wish to see an industry-driven solution and industry-driven implementation.
The good news is that, with the likes of the BASPI, Logbooks, Property Pack, etc, the industry has come up with the necessary solutions. The Upfront Information Group within the HBSG published its BASPI dataset last year, which is intended to collate one source of truth for all the data required for all the stakeholders in the transaction, and upfront.
It includes the answers needed for the Law Society TA6 form – which collate the information needed by the solicitors – and the BASPI also collates all the material information necessary for a buyer, the lender, and their valuer, to work out if the property is suitable for them. The HBSG are currently updating this again to include questions around smart home systems – such as boilers, CCTV, burglar alarms, and entertainment systems – which are run through online apps, so that buyers can be assured they will gain access to them on completion.
The Group has also looked at what needs to be collected to provide the “material information” to buyers and has created a finite list, which is easily digestible, and if available would mean that estate agents could mark a property as being “Property Pack Available”. That “material information” would include details on the title, authority searches, and information from the seller’s knowledge.
The idea, of course, is to avoid all the traditional issues which come from that information only being made available further into the process. It means sellers, as well as buyers, are advised upfront on what the issues might be so they can be resolved much earlier. Sellers can maximise the value they achieve, and nobody wastes money on a transaction that falls through.
However, even with this all ready to go, I am afraid delivering this voluntarily is a no-go. We need mandates via Government legislation.
We cannot deliver voluntarily in the industry. Caveat emptor works against proactivity, and the conveyancing protocol does not reference Consumer Protection from Unfair Trading Regulations – it is a requirement of those marketing the property, not conveyancers. Because of caveat emptor, a seller’s conveyancer will not routinely check the title and identify issues resolved prior to a buyer raising them, so solicitors do not provide sellers with generic advice to resolve prevalent issues such as short leases, onerous lease terms, cladding, lack of building regulations, estate rent charges, etc.
Plus, buyer’s solicitors do not ask for the material information from the estate agent – some actually advise they will not even read the property particulars – so how can they know the basis the deal has been agreed on?
The issue is a mistaken fear of an increase in liability, but liability does not increase due to upfront information; if anything, it reduces because the buyer is aware of any issues and the seller can prove they have provided all the information material to the average consumer. So, less complaints and more evidence of compliance. The seller’s lawyers will only be advising on generic issues as they do not know what the buyer’s intended use and enjoyment is and, at the end of the day, caveat emptor still applies.
Thankfully, we appear to have Government support for the documentation/information provision and where they fit within the process. There is also a widespread acceptance that commercial barriers exist, and they will continue to be in place in a voluntary world, because it suits certain businesses to keep them there. In other words, the status quo works for big organisations who hold a competitive advantage, and they will push back against anything that changes that.
So, we will of course continue to work with the Government but, to deliver, we will need the Government to act. We may also look at the Law Commission’s 14th Programme of reform which has yet to be confirmed because, if we can include our measures, this gives further impetus.
Legislation, however, must be the end goal – it provides the right and proper foundations for us to deliver what is required, and ultimately bring about the changes the vast majority want to see – especially consumers.
Beth Rudolf is Director of Delivery at the Conveyancing Association (CA).