Article contributed Ian Quayle

Ian Quayle presents a comprehensive review of the past year, exploring the key developments and trends that have shaped the landscape of residential conveyancing. 

I have had a little time over the last few weeks to reflect on what has been a very busy year and have considered some of the key developments within the realm of residential conveyancing over that period. While I intend to steer clear of exhaustive discussions on the Building Safety Act, recognising the saturation of such discourse, I extend an invitation for any queries or concerns about the Act to be directed to my email address ian@iqlegaltraining.com. 

For those less acquainted with our activities in the past year, I am pleased to highlight our monthly forums for residential conveyancers, commercial property lawyers, local authority lawyers and residential conveyancing support staff. These complimentary events, sponsored by Stewart Title, Geodesys, Move Reports and facilitated by IQ Legal Training, have proven to be popular and dynamic platforms for discourse and learning. Covering an array of topics, ranging from challenges associated with land registry restrictions to issues involving software systems, Case Management Systems, and reporting on Title, the forums cater for practitioners’ diverse interests. The success of these regular events means that they will become a regular monthly feature for 2024 and will remain free for attendees. 

Throughout the year, we have hosted a series of sponsored webinars, providing valuable insights into pertinent topics. These webinars are free to attend and highly informative. Anyone interested in participating in future forums please email me, or connect with me on LinkedIn here. Should you wish to be included in our mailing list for Continuing Professional Development (CPD) events and related updates, please do not hesitate to contact us by emailing info@iqlegaltraining.com and we will ensure your inclusion in our database. 

The Law Society Guidance on Climate Change
 

In April of this year, the Law Society released guidance on climate change. Surprisingly, there has been a noticeable lack of awareness and concern among practitioners.  

The Law Society’s guidance on climate change, issued in April, is broad in scope, targeting the legal profession as a whole, including conveyancers. While it provides general advice, the Society has indicated that industry-specific guidance may be forthcoming in the future, though a definitive timeline remains unclear. 

Stephen Tromans KC of Essex Chambers, a respected authority on the matter, raised a crucial point related to potential negligence on the part of property lawyers. His opinion, provided to Groundsure, suggests that practitioners could be considered negligent if they fail to inform clients about the availability of climate change reports. However, this message has been misconstrued by some, implying an obligation for mandatory climate change reports in transactions, which is inaccurate. What is essential is informing clients about the option of obtaining a Climate Change Report during the due diligence process. 

Climate change reports are now readily available from search providers. While not categorised as essential, they are considered necessary, and clients must be made aware of their availability and potential benefits. 

The Law Society’s guidance underscores the need to communicate to clients about climate change risks. Those risks encompass physical impact, legislative and regulatory changes, and potential liabilities. Clients should be informed about the general types of risk, but specific advice on the content of a Climate Change Report should normally be beyond the scope of the retainer of a  conveyancer. 

The legal landscape is evolving towards a heightened awareness of climate change in residential conveyancing. As practitioners, it is vital that clients are aware of the option to obtain a climate change report.  

TA Forms  

Acting for the Seller 

Recent case law highlights crucial lessons for sellers and conveyancers. 

When acting for a seller it is imperative to educate the client about the risks associated with providing inaccurate information in TA forms. Sellers should be explicitly informed about the necessity of answering these forms with honesty and transparency. If a question is unclear, the client should express their lack of understanding, and if the answer is unknown, they must explicitly state so. Guesswork or assumptions should be avoided, as this could expose the client to a claim for misrepresentation and the risk of committing a criminal offence under Section 2 of the Fraud Act 2006. 

Equally critical is the need for the client to promptly notify their conveyancer if any information within the TA forms changes. 

Sellers are strongly advised against adopting a rosy perspective when responding to questions. Recent judicial comment emphasises the dangers of overlooking potential issues related to building control, planning permission, or even the presence of Japanese Knotweed in the garden.  

Put simply sellers and their legal representatives need to navigate the completion of TA forms with utmost diligence, transparency, and a commitment to factual accuracy. The repercussions of providing misleading information can extend beyond mere legal implications, affecting the integrity of the transaction and potentially leading to legal disputes.

Acting for the Buyer 

When acting for a buyer the client should view the questions in the TA forms as a comprehensive checklist. While clients need to be made aware of the potential to bring claims for misrepresentation, it is essential to address the practical challenges associated with the pursuit of such claims. 

While it’s easy to assert that legal recourse exists for misrepresentation, the reality may not be attractive to aggrieved buyers. Advising the buyer client to sue the seller might not align with practical considerations. Initiating County Court action, even for a seemingly clear-cut case, can be a costly and uncertain endeavour.  

For practitioners dealing with residential leasehold transactions, caution is warranted regarding the new Section 11 in the revised TA7 forms which concern Building Safety Act issues. It is imperative when advising a seller to go beyond advising a client to fill in the TA7 form. Instead, a conveyancer should actively provide seller clients with detailed information on what constitutes remediation work under the Building Safety Act together with an explanation as to the significance and consequences of a leaseholder deed of certificate and landlord certificate. This approach deviates from the norm to ensure that clients are aware of information required to answer questions in the TA7 form, linked to the Building Safety Act. This guidance should shield clients from potential pitfalls generated by the new section 11 questions. 

Recent cases provide guidance for conveyancers when advising sellers completing TA forms, two noteworthy instances stand out: Rosser v Pacifico Ltd [2023] EWHC 1018 (Ch) and Downing v Henderson, a matter adjudicated at the London Central County Court in 2023 (unreported). 

The case of Rosser v Pacifico Pacifico Ltd [2023] EWHC 1018 (Ch) concerned the sale of a flat described as a two-bedroom dwelling. The estate agent, acting on behalf of the seller, provided the buyer with drawings and specifications utilised during the renovation, confirming the flat’s status as a two-bedroom unit.  

In addition, the seller whilst completing the TA forms asserted that he was not aware of any breaches of planning permission or building control. The buyer discovered that the second bedroom was illuminated and ventilated by a skylight installed without proper planning permission or building regulation consent, violating the property’s listed building status in a conservation area.  

The buyer was required to remove the skylight, rendering the flat licensable only as a one-bedroom unit rather than the originally marketed two-bedroom flat. At trial, the judge determined that the estate agent, by providing material to the buyer revealing that the property was a two-bedroom flat, made a false representation on the seller’s behalf. In addition, the trial judge held that the seller should not have stated he was not aware of breaches of planning permission or building regulations without checking this was in fact the case. The case re-iterates the principles established in the William Sindall case of 1993. 

The unreported case of Downing v Henderson heard in the London Central Court concerned a claimant buyer who successfully sued the defendant seller who had confirmed in an answer to a question in a TA form that the property being sold did not have Japanese knotweed in the garden. The court proceedings resulted in the buyer securing damages and an award of costs. The seller needs to be cautioned so that there is an awareness of the potential for liability for misrepresentation. 

Additional Enquiries
 

Consideration needs to be given by the conveyancer for the buyer as to whether additional enquiries are required. While the protocol does impose restrictions on raising general additional enquiries where the buyer client explicitly requests additional enquiries or if the information provided by the seller proves to be incomplete or inadequate they can be raised.  

If we consider issues concerning the Building Safety Act crucial, additional enquiries should include whether the landlord has requested a leaseholder deed of certificate and, if so, when this request was made. Equally important is ascertaining whether the seller has duly notified the landlord of their intention to sell or initiated a request for a landlord certificate, along with the corresponding timeline. I am participating in the production of a book on the Building Safety Act to be published by the Law Society. This text is set to be published in the New Year and involves insights from various barristers at Tanfield Chambers. 

Leasehold Reform – The Leasehold and Freehold Reform Bill 

The proposed bill includes the following proposed reform 

In terms of lease extension valuations, the managed value is set to be removed, making it crucial for those involved in lease extension work to seek expertise from experienced surveyors and solicitors who specialise in this area. 

Further provisions address acquiring an intermediate interest in collective enfranchisement, amending provisions on lease-back collective enfranchisement, and introducing amendments to lease extensions for leasehold houses with a requirement for a peppercorn ground rent. The government aims to discourage the sale of leasehold houses, introducing legislation that bans such sales while limiting costs on enfranchisement and restricting the landlord’s ability to charge insurance costs. In addition, there is speculation about the potential resurgence of commonhold. While a relaunch of commonhold was previously threatened in January 2021, the government might revisit this option if issues with leasehold practices persist. Developers need to adopt more sensible and transparent approaches to administration charges to avert the possibility of commonhold becoming a preferred alternative. 

Notably, the leasehold Reform Bill proposes that landlord’s fees for landlords’ enquiries become administration charges, subjecting them to the test of reasonableness – a positive step forward in the realm of administration charges. 

The Exchange Code of Practice 

The Exchange Code of Practice introduces three distinct protocols regulating the exchange process and facilitating the electronic exchange of contracts. This innovative approach allows for the electronic signing of contracts, a topic that I’ll delve into further in upcoming webinars scheduled for the new year. For now, it’s essential to bring your attention to the code and encourage you to explore its contents. 

While the code is not groundbreaking, its significance lies in overcoming challenges associated with telephone exchanges and transitioning them into an electronic system.  

What to look out for in 2024 

As we look forward to 2024, we can anticipate a continued focus on leasehold reform and the potential resurgence of commonhold. In addition, decisions of the First Tier Tribunal should provide some clarity where there is confusion concerning the Building Safety Act.