New bank powers will “raise conveyancing standards” say firm director

New powers enabling banks to delay transactions by up to four days to further investigate fraud should help combat fraud and could improve standards across the conveyancing profession says the director of Welsh conveyancing practice Convey Law. 

The new powers which will allow banks to delay payments for up to 72 hours where there are reasonable grounds to suspect a payment is fraudulent, come into effect from the end of October. Concerns have been raised about the potential delays to property transactions but the regulations do have an opt-out clause.

“These laws have been brought in to combat cybercrime and anything that works to protecting our clients and their money can only be a good thing. However, it appears unlikely that Banks will delay client account bank transfers from known and regulated Solicitors or Licensed Conveyancer practices and so delays between Conveyancers on the day of completion should not be affected. Perhaps we need to view this as a real opportunity to raise conveyancing standards?”

said Janine Wellington, Legal Director and Head of Conveyancing at Convey Law.

“Delays of this nature are usually and more likely to occur when Conveyancers have not accounted to their clients early enough in the transaction process and the funds coming from the client is delayed. All good Conveyancers are excellent project managers, and a key part of the conveyancing process is calling in funds well in advance of exchange of contracts and completion. The due diligence surrounding AML and money laundering, source of funds and wealth checks, need to be undertaken very early on in the transaction process to avoid last minute issues that this due diligence can cause. Any great conveyancer, ‘will know their client’ very early on in the matter and therefore issues of this nature, should not be a concern or the reason for any delay.”

Rather than tight timescales between exchange and completion, Janine advocates sending funds to the Conveyancer on the other side of the transaction in the days before completion to be held to order pending legal completion

“Perhaps all Conveyancers should be asking for all the funds due from their clients before exchange and not completion? We advocate the use of the ‘Conveyancers Code for Completion’ whenever possible in a transaction. The Code allows for a much better moving day experience for both us and most importantly our clients – and those that are helping them with the upheaval of moving house.”

The Conveyancer’s Code for Completion was launched by the Conveyancing Association in August 2017 detailing a 10 step process for a ‘better completion day experience for all parties by facilitating the transmission of the completion funds to the seller’s conveyancer the working day before legal completion to ensure that completion can take place on the Completion Date set out in the contract.’ Step Three of the code outlines

“When submitting their certificate of title and funds request, the buyer’s conveyancer should notify the mortgage lender of their intention to utilise the Conveyancer’s Code for Completion and will therefore require the mortgage funds to arrive in their client account the second working day before the Completion Date and confirm that the borrower has been made aware that interest may be charged for the period between release of funds from the mortgage lender to the conveyancer and the Completion Date. The lender should be advised that their submission of funds on this basis indicates the lender’s agreement to the funds be transmitted to the seller’s conveyancer the working day before completion to be held to the order of the buyer’s conveyancer for the purpose of completion on the next working day.”

Completion should then take place at the earliest opportunity on completion day.