The Law Society of England and Wales has set out the changes it sees as necessary with regards to the UK Finance Handbook and building safety legislation.
Conveyancers have been battling new rules – chiefly the “car crash” Building Safety Act – which were introduced in response to the 2017 Grenfell Tower disaster.
The impact of the new regulations has been significant, with many conveyancers pausing leasehold transactions on affected leasehold properties entirely.
One key reason for this is that Part 1 and Part 2 of the UK Finance Handbook contain provisions that are impossible to satisfy without taking on an “unacceptable level of risk” and “confirming information that conveyancers are not capable of checking”, noted the Law Society, with the rules also having “potential implications on professional indemnity insurance (PII) availability and cost”.
As such, the Society said it has met with UK Finance to discuss conveyancers’ concerns and as such the handbook was amended on 21st July. The new wording makes it clear that the provision only applies where the flat is in a “relevant building” – more than five storeys or 11 metres.
The Law Society is asking for further change. Alongside concerns regarding individual lenders in Part 2 of the handbook, these include:
- Building safety provisions to apply only where the lender advises in the “instructions to solicitors” that the flat is in a “relevant building” – more than five storeys or more than 11 metres
- The lender to satisfy itself that the flat is in a “relevant building” without requiring the conveyancer to verify this
- The lender’s valuer to see and take account of the leaseholder deed of certificate and the landlord’s certificate when valuing the flat
- The lender to confirm it is not looking to the conveyancer to warrant or verify the validity or status of the leaseholder deed of certificate or the landlord’s certificate
The Society has also called for technical amendments to building safety legislation, including:
- Correction of the definitions used in the amendment regulations
- Clarification on the status and protection for long leaseholders who have enfranchised since February 2022
- Introduction of a fixed time limit during which landlords can challenge the validity of leaseholder deeds of certificate
It has also been noted that he burden of explaining building safety issues to consumers sits with the conveyancer, with conveyancers concerned about the risks involved in explaining likely service charges and financial liability. The Society said:
“We are in discussions with DLUHC and the Home Buying and Selling Group about creating consistent guidance for consumers on building safety issues.
We have also published information on building safety for flat buyers for you to share with your clients.
This guidance was issued before the act became law, but it sets out some of the practical issues that clients will need to consider.”
