the land registry

The Land Registry: a central hub for Local Authority Searches?With huge variations in price, quality and service of both official and personal local authority searches, could and should the Land Registry become involved in order to offer a quality guaranteed service? Alan Thorogood, CEO of STL Group plc examines the options.

One would assume that in this digital age all councils would use electronic, standardised systems to collate Land Charges, planning, highways and other data in order to compile an LLC1 and Con29. Not so – whilst this is true of some, much search data is still gleaned from dusty old OS maps, paper files and microfiche. NLIS has tried for many years to achieve something quite basic – the request and delivery of a single document (no complicated data exchange with this project). To date only a small proportion of councils are fully automated via NLIS. Enter the Land Registry, possibly assisted by a regulated commercial sector to act as data compilers and retailers of local searches. But they have a rather large task on their hands.

The Land Registry, as the Government department which guarantees property ownerships, is naturally set to look at providing options for property information delivery. It has an excellent reputation for data quality, and has clearly learnt a number of lessons from its failure to implement E-conveyancing, the chain matrix and e-transfers.

It is now exploring the possibility of widening its range of information services to include searches of the Local Land Charges Register and other information currently supplied by local authorities. Market research has been conducted and discussions held with central and local government stakeholders along with users of Land Registry services including conveyancers, search companies and lenders. This will inform a business case which will be presented to Land Registry’s Board for consideration later this month. No decisions about the viability of this proposal will be taken until the business case has been fully considered and approved by Ministers.

I’ve always thought that local authority data should be treated as company search data – with a centralised Government-regulated hub that offers a data banking service and a private sector that offers a competitive and value added service.

You could still carry out a search direct if you wish and if you have the know-how or think this will be cost-effective. Or you can obtain searches via an intermediary who carries out the data analysis and presents it in a clear and simple format. Those intermediaries could also benefit from bulk buying data discounts.

November 2011Edition 11

Also inside:What the future looks like

Property law: solid ground or shifting sands?

Adding value to lease guarantees

Environment matters – use it or lose it?

Want to know more? Free Phone: 0800 318611 Free Fax: 0800 317978Want to know more? Email: [email protected] Web: www.stlgroup.co.uk

hometruth edition 11 november 2011

STL Group plc is authorised and regulated by the Financial Services Authority for non investment insurance business.

In this edition of Hometruth, we consider whether the Land Registry should become a central hub for local authority searches, and the impact of free environmental information. We interview Eddie Goldsmith, Chairman of The Conveyancing Association, about what the future looks like; and Viv Williams, CEO of the 360 Legal Group, considers what impact private equity can have on a firm.

continued overleaf

hometruth



We should also consider the issue of the Environmental Information Regulations. This legislation states that all local authority data should be free of charge (though not all local authorities abide by these rules). The cost of any local search should be the cost of compilation only – whether compiled by the council itself or by a search company.

Can the Land Registry charge for supplying Environmental data? That is a question for the many lawyers out there who are currently arguing the issue.

I also think the Con29 should be reviewed to make it more relevant to the conveyancer and consumer as, for example, it does not currently include

nearby planning applications. Data capture on the scale being discussed would make it straightforward to include such data.

What do you think? Send your views to: [email protected]

Eddie, what do you think are the main challenges facing the industry right now? Over the coming weeks we will continue to hear about the impact the full implementation of the Legal Services Act will have on the residential property market. But this isn’t the only challenge on the horizon; lenders are already beginning to reduce the number of

firms on their panels, we are seeing a steady stream of new regulatory and legislative requirements making compliance ever-more challenging, and the recent restriction of the solicitors’ PII market has created a perfect storm for change.

What impact do you think the Legal Services Act will have on conveyancing? It could well signal the final nail in the coffin for lawyers who dabble in conveyancing or who do not embrace modern technology to enable them to provide the service demanded by lenders.

For those who are serious about conveyancing, however, this is a valuable opportunity to proactively innovate and improve their services. And it’s not just conveyancers that will be impacted by ABSs.

Lenders no doubt will be approached by law firms and groups who can offer a ‘one stop shop’. But with mortgage fraud on the rise, they will be faced with questions of how to mitigate this whilst using ABSs to reduce operational costs and drive efficiencies. With this in mind, serious conveyancers can really step up their game and prove their worth.

Do you think there is still a future for open panels? It is absolutely true that we have reached the end of lenders’ open panels and removal from them will soon become a stark reality for thousands of firms unless they take a stronger stance on issues such as mortgage fraud. We have already seen major lenders such as Lloyds Banking Group and Nationwide reduce the number of companies on their panels, with Santander recently charging firms to be on their panel and I believe others will follow in their footsteps.

How have your meetings with lenders gone? Lenders and stakeholders such as the CML have been very supportive of our work – they recognise that the industry is changing and despite split opinions about what steps they should take, they want to only work with trusted firms so our members are working to ensure they can demonstrate high quality standards, competence and probity of staff, financial stability, and good management of staff and administrative processes.

What are the next steps for the Conveyancing Association? The coming months will be a busy time for the Conveyancing Association as we continue meeting with lenders and stakeholders, engaging in industry consultations and work to shape the environment we work in. Professionals in the sector whose service delivery includes conveyancing are urged to join us as we continue on our journey in this changing landscape.

To find out more about The Conveyancing Association, call 0207 618 9141 or visit www.theconveyancingassociation.co.uk

With the arrival of the Legal Services Act, we talk to Eddie Goldsmith, Chairman of The Conveyancing Association, about what the future looks like.

New Law Society Practice Note to recommend flood searches.An increasing number of lenders are considering flood risk in their decision to provide mortgage lending. The forthcoming new Practice Note will advise solicitors to ensure they know the requirements of the lender with regards to flood risk.

STOP PRESS:

… continuedThe Land Registry

Want to know more? Free Phone: 0800 318611 Free Fax: 0800 317978Want to know more? Email: [email protected] Web: www.stlgroup.co.uk Want to know more? Email: [email protected] Web: www.stlgroup.co.uk

So what would you do if a private equity investor wished to invest into your practice?

There is no doubt that the QualitySolicitors investment will encourage other private equity houses to enter this market.

How do you prepare a law firm to be fit for business and embrace the changes sweeping the whole legal services market place? The brands and new entrants will offer very different solutions to the traditional law firm. Therefore getting your firm fit to face the future with confidence is an essential part of change management.

Firstly let’s look at how fit you are.

Your corporate structure

If you are a traditional partnership you are less likely to attract outside investment - that’s why over 25% of the profession are now limited companies. That helps in two specific ways; firstly you will attract new, younger talent who will become directors but do not want partnership, and secondly you have created a vehicle ready for outside investment.

You buy and sell time

As a law firm you are effectively buying hours from your staff and hopefully are selling these hours to your clients for more money than you are buying them. But have you bothered to cost the time spent on each file you open? If you offer fixed price services, for example conveyancing, who is actually putting the time into that particular file? If the person working on fixed price services is a partner or senior fee earner, how can you ever make any profit?

In many firms, certain disciplines are losing money on every file that is being opened. Web based solutions, advances in software and the rise of the paralegal will have a dramatic impact on the way lawyers must think about the services they offer and more importantly, who delivers them.

Running a law firm is not a hobby

How many managing partners have their role by default, and how many would willingly give up that role if they had a choice in the matter? Most Managing Partners have not had any management training whatsoever and are still focused on fee generation in equal importance to the management of the practice! The hobbyist approach towards management will not enable your firm to be viewed as fit for business.

Managing a practice is not a hobby and the need for clear leadership and direction is essential if your firm is to prosper.

Know who you are serving

Knowing your client (or are they actually customers?) is an essential aspect of preparing your firm for the future. How can you establish what new services to offer and how your clients/customers want them delivered if you don’t know who they are?

What Now? QualitySolicitors have agreed a funding deal that is the first major investment by private equity in the high street legal market. Viv Williams explores what private equity could mean for your practice.

The GroundSure Homebuyers Report

now includes pluvial (surface water)

data for improved flood risk assessment,

together with new ground stability

(non coal mining) data from the British

Geological Survey. It also includes a

revamped opinion page to provide clear

guidance on contaminated land and

flood risks.

Product Update: Enhanced environmentreports

Fact! Environment Agency statistics for England & Wales:• 1 in 6 properties are at risk of flooding.

• Approx. 185,000 commercial properties are at risk of flood.

• The summer 2007 floods cost a total of £3.2bn, including more than £2bn to homeowners and businesses and 400,000 lost pupil days. The cost of the damage per home flooded was £23,000-£30,000. The cost incurred per flooded business was £75,000-£112,000.

• The average losses from a flood are £28,000, compared to £1,033 for a burglary.

• Businesses are more likely to be flooded than burnt down.

• Some service providers estimate that flooding accounts for nearly 10% of major business disruptions.

The Government has finally responded to the OFT market study into home buying and selling, published in February 2010.

Significantly, the Government rejects the OFT’s recommendation that the Government undertake further research into referral fees, and consider a ban. The Department (for Business, Innovation and Skills), argues that banning referral fees would be disruptive and would push up agent fees. The conclusion reaffirms the Government’s position that they are not planning any further reform of the home buying process, but welcome a voluntary industry-led approach to improving the consumer experience. (The response is available to download from our website.)

OFT study into homebuying and selling

There were 65,000 residential property transaction completions in September, down from 72,000 in August, and from 70,000 in September 2010.

Source: HMRC

Fact!

continued overleaf


Want to know more? Free Phone: 0800 318611 Free Fax: 0800 317978 Want to know more? Email: [email protected] Web: www.stlgroup.co.uk

Due to popular demand, we have now added Land Registry-compliant Lease Plans to our extensive product portfolio. These comply with the requirements under the Land Registration Act 2002 and are prepared to RICS guidelines. They include a scaled floorplan of the property and are colour-coded to reflect boundaries, communal areas and rights of way. They also include an ordnance survey plan insert (showing the property in the context of the local area) and an accurate north point.

Land Registry-compliant Lease Plans

STL is delighted to have been selected as a panel provider to www.Connect2Searches.co.uk, part of the Connect2Law legal referral and support network.

STOP PRESS:

Because of the transactional nature of much of the work, many lawyers do not know who their clients actually are. Establishing an understanding of who your clients are and what services they would like you to offer is an essential ingredient in getting your firm fit for business. By asking your clients what services they would like you to offer and how would they like you to deliver them is a way to establish a rapport and will give you your future direction. For example, if you are considering offering an online web based solution, make sure you establish that this is the way your existing clients wish to purchase legal services.

Managing your bank manager

It’s not that long ago when you could ask your bank to increase your overdraft facility for whatever reason and generally you would have your wish. In today’s economic climate your bank is an essential part of your fitness routine. Although the banks will be supportive, they are more likely to support firms who can

provide the essentials in financial information. We are still hearing “my bank manager is asking for monthly management information” ... and why not! All banks request this level of management information from all industries and profession, so why not from lawyers?

If we ever see a change in the economic circumstances how will you fund the increased demand for cash in your business?

As the market improves and you see more work coming in at what stage will you recognise the need for an early discussion with your bank manager?

This discussion needs to be supported by a workable business plan, and needs to be presented when you are taking on fresh instructions, not when you have run out of cash! Measuring the work you take on will enable you to acknowledge the need for extra funds to finance any growth.

Most firms have reduced their staffing levels to the barest minimum (many following three or four waves of redundancies) and if they see

any increase in workflow, have no fat left to fund the growth. For example, an increase in new instructions will result in additional staff to do the work – they need paying. The work turns into WIP and then debtors and some considerable time later, into actual cash.

When will you run out of cash to fund any upswing? It is essential you talk to your bank manager at the new instruction stage and not when it’s too late!

Viv Williams is CEO of 360 Legal Group - www.360legalgroup.co.uk

You can contact Viv on 01275 465540 or email: [email protected]

… continuedWhat Now?

STOP PRESS: Changes to EPC rules delayed yet again!The Government has postponed proposed changes to the Energy Performance of Buildings (Certificates and Inspections) (England and Wales) Regulations 2007 (the EPB Regulations) until 6 April 2012.

Banks approved 6% fewer mortgages in September than in August, although the figure (33,130) was still 8% higher than in September 2010.

Source: British Bankers Association

Fact!

Environment matters: use it or lose it?By Craig Taylor, Strategic Account Manager, GroundSure Limited

The Environmental Damage Regulations came into force in 2009. In common with much modern environmental law, the regulations are based on the ‘polluter pays’ principle and ensure that those responsible for environmental damage are responsible for cleaning it up.

The regulations cover the most serious cases of environmental damage to groundwater, surface waters, land and protected habitats e.g. SSSIs (Sites of Special Scientific Interest) and they only apply to damage caused after the regulations came into effect – for damage caused prior to this, the Contaminated Land Regulations would apply.

The Environmental Damage Regulations can be applied not only when damage has taken place, but when such damage appears likely to occur imminently. Although there have only been four applications of the regulations to date, many within the environmental management community expect that the pace of prosecutions will increase now that precedents have been set. The Environment Agency has used the

legislation once, against a utility company in relation to a sewage spill resulting in fish mortality, and three Local Authorities have used it in relation to large fuel spillages.

The regulations were under attack in the Government’s recent ‘Red Tape challenge’, prompting regulators themselves to line up in support in the consultation process. This could be the catalyst for regulators to either ‘use it or lose it’. To have your say about the regulations, visit www.redtapechallenge.cabinetoffice.gov.uk/environment/

Want to know more? Email: [email protected] Web: www.stlgroup.co.uk


Want to know more? Free Phone: 0800 318611 Free Fax: 0800 317978

The Government is proposing a new high speed rail link called High Speed 2 (HS2).

The first phase - a new line from London to West Midlands - will pass through 22 local authority areas. If the Government accepts the proposals as they are, construction is due to begin in 2017. Construction methods will vary and may result in severe disruption to local authority areas along the route, potentially affecting property values, views or your client’s future enjoyment of their property.

Assessing the potential impact

A local authority search should indicate if a property is or will be within 200m of the centre line of a proposed railway. It will not, however, tell you the exact distance or help you assess the likely impact on your client’s property.

For a more detailed search, your client may be interested in a SITESOLUTIONS HIGHSPEED 2 search. This search has been designed by Argyll Environmental to assist in making informed decisions during property transactions and to satisfy standard due-diligence enquiries for residential and commercial properties or sites in the local authority areas affected by the route.

Key questions answered

The HIGHSPEED 2 search includes clear mapping to the nearest point of the proposed route and answers the following key questions:

• Is the proposed line within 1,000m of the property and if so, how far is it?

• How will the route affect the property?

• Is the route in a tunnel, in a cutting, at ground level or on a viaduct?

Will high speed trains run through your client’s back yard?

Aylesbury Vale, Birmingham, Brent, Camden, Cherwell, Chiltern, Ealing, Islington, Hammersmith & Fulham, Harrow, Hillingdon, Kensington & Chelsea, Lichfield, North Warwickshire, Solihull, South Buckinghamshire, South Northamptonshire, Stratford on Avon, Tamworth, Warwick, Westminster, Wycombe.

Local authority areas affected by HS2:

During the summer months, STL delivered a number of free CPD seminars in conjunction with the 360 Legal Group and Legal Eye. The seminars revealed a number of major concerns around:

• Client Care Letters and Terms of Business

• Equality and Diversity

• Outcomes Focused Regulation

• Chapter 3 of the new Handbook: Conflict of Interest

• The Bribery Act

In each of these areas, many firms are either uncertain if they are complying with the requirements or simply don’t know where to start or how to obtain training without incurring too much cost.

What can you do to get started?

• First of all, complete a compliance “health” check on all areas. You can either carry this out in house

or get someone in to complete it for you. This will ensure you know what you are doing right and where corrective action is required.

• Decide who will be your COLP and COFA (Compliance Officer for Legal Practice, and Compliance Officer for Finance and Administration).

• Create a compliance plan so that you can become compliant and remain compliant. Look at all the areas highlighted by the health check and that impact on you as a firm. Document your discussions and decisions, and then create an action plan. Don’t forget to consider any high risk areas. Has the workload of the COLP and COFA been taken into account and/or their caseload reduced (if they have one) to accommodate for the important duties and responsibilities they will take on for implementing appropriate controls?

Free CPD training on Outcomes Focused Regulation!

Legal Eye is offering a free training package on Outcomes Focused Regulation which you can circulate to all staff from reception upwards. The package contains training slides that your staff can run through in their own time, followed by a questionnaire and an answer sheet that they complete and return afterwards. If they achieve 80% on their questionnaire, they will receive 1 CPD. For your free pack, email [email protected]

The new legal landscape – life after the Legal Services Act


no stone left unturned

PROPERT Y SEARCHES

Want to know more? Free Phone: 0800 318611 Free Fax: 0800 317978


STL Group plc is authorised and regulated by the Financial Services Authority for non investment insurance business.

Check “lawyer uncertainty” on Google. With 8,090,000 hits it’s an obvious problem and the most challenging area for insurers of the ownership and use of land.

Law is not fixed, it changes by evolution (through the courts) and by revolution (new and recodified laws). The outcome of both for lawyers may be greater uncertainty. Of two current examples, one is topical – rights of light – while the other is more familiar – easements, restrictive covenants and profits à prendre.

Rights of light is “hot” because mistakes can be disastrously expensive. Courts, trying to balance ancient law with modern technical analysis, also look increasingly at the conduct of the parties. The lawyer now has to advise about tactics and risk management as well as law. This is not made easier when the most recent case (Heaney) was settled before it reached the Court of Appeal. If it had, perhaps the judges would have moved rights of light back into the planning process, and out of the courts. How can a real estate lawyer give clear advice without wanting to transfer some of the risk away from the client and the firm’s PI policy?

Next: the Law Commission’s proposals about easements etc., which may be of much greater practical concern.

The proposals are sensible and lucid. But the process of change itself will cause problems. Real estate transactions take time: the development takes even longer. Developers want to know how legal conditions affecting the use of land, and mechanisms to control how others may act, will work when it matters. Major changes in the “grammar” of property law cloud that view.

Major recodification causes three kinds of uncertainty. First, will the proposals ever become law, and will the drafting avoid confusion? Secondly, how long will enactment and implementation take, and could a development be caught by some change in direction? Thirdly: will a lawyer’s interpretation now remain correct, and how will the courts interpret the new law? No prudent lawyer wants his client to be a test case. The Law Commission’s report mentions Scots law. In fact, changes to equivalent doctrines are worth examination. The proposed changes are similar to the Scottish reappraisal of “title conditions”. While the new law simplified Scots property law, between enactment and implementation there was real uncertainty about practical outcomes (and those are the ones clients care about). Problems with interpretation persist.

In these circumstances, it is more than ever important for risk and uncertainty to be identified, stated and transferred. As insurers, we believe we can help lawyers and their clients to achieve this. It’s also the most interesting part of the job.

Property Law: Solid Ground or Shifting Sands?by Brian Chrystal, Underwriting Director, CLS Ltd

Title problems? STL now offers a simple, easy and cost-effective solution! In partnership with CLS, we now offer an extensive range of residential and commercial ConveySure® policies to help with all types of title-related problems - from restrictive covenants and absence of easement through to rights of light and village greens.

With immediate cover online (so there’s no need for cover notes and you can throw away your self-issue books), expert underwriters offline (for bespoke policies or more complex title-related matters), and the best cover for the best price.

We can also now provide free CPD accredited training on title insurance.

Please visit our website for more information or contact us to discuss your training requirements.

Your views matter!To tell us what you think about our newsletter or let us know what topics you would like us to cover in future issues, email [email protected]

• Contaminated Land

• Planning & Building Regulations

• Search Insurance:

– Search Delay

– Search Validation

– No Search Remortgage

• Restrictive Covenant

• Absence of Easement

• Insolvency Act

• Lost Title Deeds

• Missing Information (Registered Title)

• Good Leasehold Title

• Flying and/or Creeping Freehold

Top 10 Policies

the land registry

Documents

local authority data

search data

data quality

local land charges

data compilers

data analysis

data discounts

data banking service