Wilsons Solicitors

First, a bit of a history lesson.

Conveyancing is by law more or less the sole legal preserve of qualified solicitors. A few years ago a completely new profession of Licensed Conveyancers was created and they too now share in this monopoly, but they are very very few of them about compared to the number of solicitors.

There are also legal powers for the Government to allow other people to do conveyancing, but they have not as yet got round to it. The Government does however have plans to enable this to happen, but then again these plans have been talked about for many many years and nothing ever seems to happen.

The reason why solicitors have a monopoly on conveyancing services, is not one of great principle. Historically it came about over tax. Some 200 years ago the Government introduced a tax change, and the legal profession of the day did not like it much and objected to it vociferously. The lawyers were jumping up and down, hopping mad so much that the Government said to them something along the lines of 'there chaps, why don't we just to come to some sort of arrangement. Let's say for the sake of argument, we give you a legal monopoly on conveyancing services. If we were to do that, would you then shut up and stop objecting to our new tax plans'? And the lawyers responded that they would, and so the deal was done. And that is how solicitors got their legal monopoly on the provision of conveyancing services.

That has remained the case right up to the present day, that it is illegal for anybody other than a solicitor to undertake conveyancing services for a fee. You can do it for nothing if you want to and you can do it for yourself, but you cannot employ anybody else to do it for you for money, or they would be committing a criminal offence.

Well first of all, let us strip the problem down to its bear essentials.

If you want to buy a house then in essence you have in your possession a big bag of money and the other party has in their possession a big pile of bricks and mortar, and all you want to do is to swap one for the other, or if you want to sell the house, it's the same thing the other way round.

In principle, it's not really any different from buying a bag of sprouts. You have the money, they have the sprouts, or vice versa. You swap one for the other and then you both go on your respective ways and everybody is happy.

But there is no law that says that only state sponsored highly qualified sprout sellers are allowed to sell sprouts. So what's all the fuss about then with selling houses? Well it is of course true to a degree that buying and selling houses is a far more significant and important thing than buying and selling veg. You might buy bags of sprouts a thousand times in your life, and if something goes wrong with any one particular sale or purchase you're probably not going to be bothered all that much. But you might only buy one house in your life, and if it ever goes wrong that could ruin you for life, so it's a far more serious endeavour.

So maybe it's not entirely a bad idea to have an expert on the legalities of buying and selling houses, looking after the process for you. Whereas nobody would for a moment worry about buying a bag of sprouts until they had an expert on sprouts standing by to oversee the process.

So, what do lawyers do in conveyancing then?

Another point that makes buying houses very different from buying sprouts is that when you buy your sprouts they are handed over to you and you take them and you carry them away. You cannot do that with a house. It's stays exactly where it is and it isn't going to budge an inch just because you have given the former owner your money in return for the house.

So how do you know that that supposed former owner is actually the real former owner and isn't just a conman? How do you know they are not going to walk off with the money, only for you to find somebody else coming along and saying that that wasn't their house at all, it was somebody else's house, so you've just been conned.

In a nutshell, what lawyers do is make sure that the seller owns the house that they are purporting to sell so that they can sell it on to the buyer.

To look at the thing the other way round, if you are the seller how do you know you are not going to hand over the deeds to your house and then discover afterwards that the money has never arrived?

Of course in theory you might think you could solve that problem by insisting that it's handed over in banknotes. But the amounts involved usually prohibit that, and even if it was handed over in banknotes how do you know they are real genuine banknotes? You would probably take the risk for a bag of sprouts, but not for your house.

In practical terms these things are done nowadays by way of bank transfers electronically and you have to have some way of making sure that the transferring of the money and the handing over of the title deeds happens as close to the same time as is humanly possible, or otherwise there is always a risk that something will go wrong and one or other of the parties is going to find themselves seriously out of pocket.

Now of course all this is rather scaremongery, in the sense that it very rarely happens that any problems arise in practice. However maybe that is because lawyers are always involved so that these things could never happen. Certainly it would take a very brave person to test that question by engaging in a house buying transaction without a lawyer.

So a lawyer, as well as making sure that the seller owns the house that they are purporting to sell, also ensures that the buyer really has got the money and the money really is going to turn up with the seller at round about the same time as the seller hands over the title deeds.

Now bear in mind that money transfers are not that easy to arrange, and that title deeds are also very complicated things. That's where the expertise comes in, making sure it all comes together at the right time in the right place so that everything goes through as smoothly as possible.

What on earth are covenants & easements?

In brief terms, a covenant is usually the obligation on the homeowner to do or (more usually) refrain from doing something in their house. An easement, on the other hand, is the right of somebody else (usually a neighbour) to do something, or have a say in what happens, with a house that is not their own.

Let's go back to sprouts again. If you buy a bag of sprouts then they are your sprouts and that's that. Nobody is going to come along and assert that your ownership of the sprouts is subject to the right of your neighbours to stop you doing certain things with your sprouts, or to insist that you share the enjoyment of your sprouts with them. But that's exactly what happens with property ownership. So the job of the lawyers is to make sure that you get what you've paid for, and either there are no such rights of anybody else to interfere with your enjoyment of the house, or alternatively if there is, it's something that you're not bothered about anyway.

For example a lot of houses built in Victorian times are subject to a covenant that you are not allowed to burn bricks on the premises. In point of fact there are not many brick burners about nowadays, but the fact that these things are so common gives us an interesting glimpse into what our Victorian ancestors used to get up to in their spare time. Nowadays you would probably not be put off buying a house by any such restriction, and would the neighbours care in any event if your favourite hobby was burning bricks?

The important thing is not what these covenants are about, but that you know about them so you can make the decision whether you are happy with them or you are not.

Another thing about sprouts is they don't come with mortgages. Nobody ever takes out a mortgage to buy a bag of sprouts, therefore if they wish to sell the sprouts you can confidently buy it off them without worrying about whether somebody else has a charge on the sprouts.

It isn't so with houses. Lots of people have mortgages, therefore if you buy the house you need to know about that. If there is a mortgage there, you need to ensure that it gets paid off before you buy the house. Either that or it is immediately paid off out of the sale proceeds. Either way you then get the house free of the seller's mortgage which is how it should be. It's the lawyer's job to sort all this out for you.

The lawyer also needs to check for you that you can actually get to your house. This sounds fairly obvious, but isn't necessarily always so.

If your house faces onto the road then the chances are you're not going to have any problems in this respect. But are you absolutely certain that that road is a public highway or that you have private rights of way along it, and what if your house doesn't front precisely onto the road? Do you have proper rights of way from the road to your house? Do they cover driving your car as well as walking to your house?

The same issues also apply to the various services to which the house will presumably be connected. Does, for example, your house have the right to dispose of its sewage into the public sewer system? To get electricity and water supplies in and so on.

It may well be that the seller of the house has lived there happily never having a problem with any of these things, but that's not the same as saying that they have the legal right to them. Absence of a legal right means that it could in theory be stopped at anytime on somebody's whim, so the point needs to be checked out.

Furthermore, there's all sorts of other information that its possible to find out about houses by what lawyers call searches. Searches are just searches of various government etc registers of all sorts of things about houses. There are dozens and dozens of these, covering everything from whether the government intends to build a motorway outside your front door, to whether there is any radon gas under the house, or any old coal mines or brine workings, or former rubbish dumps, etc.

Most lawyers will have a selection of favourite searches that they think is sensible to make, but at the end of the day whatever that choice is it's simply a choice and one person's choice might differ from somebody else's. If you're happy to accept the lawyer's judgement on this then so be it, but if there is something you are particularly interested in make sure the lawyer knows because there might be a specific search that might fit the bill.

Remember though that there is never any guarantee that you've covered absolutely everything. In theory you could do absolutely all of the searches that are possible, but even then it's still possible that you might miss something. Choosing which searches to use is often much more of an art not a science. The lawyer is the artist, you can either leave them to get on with it or else make suggestions, its up to you.

Hand in hand with the searches, lawyers also make enquiries of the seller of the property, though the seller's lawyer, whose job it is to guide the seller in answering them.

The need for enquiries arises because of the 'caveat emptor' rule, Latin for 'buyer beware'. A seller is under no legal obligation to tell a buyer anything adverse about the property, but then again if he is asked he is not entitled to tell lies either. So lawyers ask. The enquiries are the questions, and they are designed to flag up any problem areas.

Most enquiries are in a fairly standard form, but specific ones can be added if required to fit the specific circumstances of the case.

So, that is what lawyers do. What is it that lawyers do not do?

First of all the lawyer's efforts relate to the specific property that is in question.

It may be for example that one reason why you're buying the house is because of its lovely views, and it maybe that your searches and enquiries come back with the information that the government does not intend to build a motorway outside your front door, so you breath a sigh of relief.

But what you don't know is that perhaps the government is planning to build a motorway through those nice fields that you enjoy looking out over from the nice view that you think you're buying. Normal searches and enquiries wouldn't cover that, they would only cover this particular house.

Lawyers do not generally nowadays actually physically inspect the property. This is because their primary interest is in who owns it, not what it is, and looking at it doesn't really assist them in that process.

In very rare cases, looking at a house might come up with something that might be relevant to a lawyer, like for example, if there is evidence of some sort of footpath crossing the land that could raise a legal issue, but in the vast majority of cases a lawyer is not going to be assisted in dealing with the conveyancing of a house by looking at it.

Another thing a lawyer cannot do is give you any advice about whether the house is structurally sound or needs damp proofing or draft proofing or extra loft installation, or whatever it maybe. That is the job of a surveyor, and there are plenty of them around who offer various different sorts of services for the house buyer.

If you do get some sort of survey or valuation then you can certainly discuss the report with your lawyer, but that doesn't mean that your lawyer is in any position to pass any comment on the contents of the report as such. Its use to the lawyer is simply in so far as it helps him to do his job as a lawyer rather than so that he can tell you whether the survey report is any good as such. That is solely down the surveyor.

Lawyers don't advise on this either unless specifically asked.

The reason for this is that environmental liabilities don't tend to be very obvious, or if they are you can see for yourself (eg if the place is a mess and polluting the environment).

It is possible for the place to be built on a toxic dump, for example, but that would not be obvious from the surface. There are environmental searches available, but they are not perfect either. They tend to produce a broad summary of the history of the site. You are then left to reach your own conclusions from that, and there is no more expertise a lawyer has in interpreting these results than you have.

Ask your lawyer specifically if you would like advice on a search about this.

Most people who are buying houses nowadays buy their house with a mortgage.

All the explanation given above so far has assumed that you are just buying it for cash without a mortgage, so let's add in the mortgage angle, and see how that effects matters.

Primarily your mortgage lender wants exactly the same as what you want, i.e., they want good title to this house in return for their money, because the house is the thing that they will have to repossess from you and sell if you fail to pay them their money back. So, so far so good.

But from thereon it does tend to get a bit complicated. For example, your lawyer is there to offer you advice about the house buying process, and might be inclined to say, for example, that this is an extremely expensive mortgage you've got yourself fitted up with, why don't you consider going somewhere else and getting a better deal. That might be excellent advice to give a home buyer, but the mortgage lender would probably not be too pleased about it.

In reality mortgage brokering is not really within a lawyer's sphere of expertise, so he would not feel able to comment. But if he felt strongly enough about it he might suggest it.

Another problem is that the above description of how the conveyancing process works, more or less assumes that you have the freedom to make all the decisions about what sort of searches and enquiries, for example, you want the lawyer to make.

In practice however if you're buying the house with a mortgage lender, the mortgage lender will almost invariably have their own views on such things and will insist that certain searches and enquiries are made whether you like it or not, and at your expense.

Mortgage lenders also like to have all their own paperwork dealt with exactly as they like it to be and no two of them are ever the same, so this adds to the expense in terms of lawyers fees, because mortgage lenders always insist that you pay their legal fees.