A survey conducted by Bold Legal Group reveals the disparity in leasehold advice from conveyancers.
The leasehold scandal has been prevalent news over the last couple of years, as stories of onerous terms and depreciating leases have rendered some homes worthless. Some news organisations, including The Guardian and Which?, suggest part of the blame rests with conveyancers failing to advise prospective leaseholders adequately on their liabilities.
A survey conducted by Bold Legal Group (BLG) certainly gives credence to the notion that not all conveyancers are adequately informing prospective leaseholders. Surveying 65 firms, BLG sought to provide “an insight into the extent at which firms explain the content of a lease and how this impacts the transaction”.
It transpires that 100% all of the firms surveyed “explain the contents of a lease before exchange”, with only 8% providing this explanation through a medium other than writing.
Although almost all the firms stated that they provide an explanation, the survey highlighted an inconsistency in the point at which this explanation is provided. Whilst 42% of respondents stated they provide an explanation within the Report on Title, 28% stated they do it after receiving the contract pack. The remainder stated that this point varies from case to case.
When BLG asked conveyancers about the details of these explanations, “all respondent firms stated that they now cover how the rent will increase”. Despite 94% stating that they always explain rent increases, 6% admitted to only recently including this information.
Most significantly, there was a disparity between firms that explained “the impact of rent increases on the value and saleability of property in the future”. Although 60% said that they informed the buyer about the future saleability of the property, 15% stated that they did not. In addition, 17% “claimed that whilst they previously hadn’t, they would do so going forward”.
The majority of respondents that claimed they informed buyers about future saleability “felt that this information should always be given”. On the other hand, the minority of respondents felt that imparting this information was not their remit.
There is clearly a worrying inconsistency in the level of advice that conveyancers are communicating to prospective leaseholders, particularly regarding the future saleability of leasehold properties. To this extent, news organisations are right to suggest that part of the blame for the leasehold scandal rests with conveyancers. It appears some conveyancers could be doing more to inform leaseholders of their potential liabilities.
If you are considering purchasing your home leasehold, it is highly recommended that you speak to a specialist leasehold valuer beforehand. Nick Plotnek Associates can offer preliminary advice, free of charge, regarding your leasehold purchase.
From: Today’s Conveyancer
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