You can trust me - I'm a lawyer. Honest, Guv.
Some of the promises we're seeing being made by companies selling legal services would make Arthur Daley blush. Last week, a firm promising "no-sale no-fee" forgot to mention that the client has to buy insurance to ensure that they don't pay anything if the sale aborts - this insurance costs about £100. Obviously, "no fee" is only relevant when used in conjunction with the word "legal". Another favourite trick we've seen is disguising fee-earning work as a disbursement, such as completing Stamp Duty Land Tax forms. Another client was quoted £600 for the work, and ended up paying £1600 (for unexpected items). However, we adam-and-eve that agents are steering clients away from the cut-and-shunt merchants which can only be good wooden pews. (Click here for a translator to help you communicate with such firms)
Lenders help to slow the housing market
With lenders determined to eliminate mortgage fraud, some are reducing the number of firms they will allow to represent them. HSBC have taken a radical approach and reduced the number to about 40. The lender has told our clients that if they want to use their own solicitors that are not on their panel, that this will slow down the buying process, and could cost them more. Other lenders have indicated that they will follow this lead by reducing the number of firms that will represent them. It is unclear how this reduction in choice, increase in fees and the introduction of further delays will benefit the housing market.
Buyers impacted by searches
There are some new challenges for people looking to buy properties in London, primarily from several local authorities that are now taking over 6 weeks to return searches, and the new issues that are raised by the building of the HS2 trainline. To head off potential problems, over the past 6 months, we have been carrying out searches specifically to check whether the line will affect the property in question. Over the past few years, buyers looking for a London property had to contend with concerns over the CrossRail project, but now, it's delays in searches and the impact of the new rail line that they need to consider as well when looking at purchase decisions and timescales.
The Partnership introduces unique online assistance
As part of the development that is well underway with our revamped website, we are providing new online services, including a unique guide for first-time-buyers to help explain the conveyancing process more effectively. We will also be offering an online-chat service where clients can talk to us online at any time, in addition to our Skype offering, due in early Spring.
Tuesday, 31 January 2012
Sunday, 22 January 2012
The Partnership raises concern about lenders abusing their position
For Immediate Release
Guildford, Surrey – 22nd January 2012 – The Partnership has evidence that banks and building societies are misleading their mortgage clients over legal representation and costs, with the result that one of their clients has instructed the financial ombudsman to take direct action.
Traditionally, solicitors represented both the buyer and the mortgage lender in the purchase of a property. However, lenders, concerned about the increasing levels of mortgage fraud, have recently started to dictate who may represent them, by setting up panels of “authorised” firms.
This change has lead to warnings that consumer choice was being restricted, but The Partnership now has specific evidence where clients are being penalised due to their selection of mortgage provider. These include a bank misleading a client over costs, another forcing a client to use an expensive London solicitor, and a nationalised lender refusing to disclose their charges.
Peter Ambrose, Director of The Partnership, is extremely concerned; “We do not mind lenders dictating who may represent them - indeed, we would prefer that ALL lenders used their own chosen law firms to represent themselves as it removes a potential conflict of interest that we currently face.
However, our evidence shows that lenders are abusing their position, to the detriment of their clients. After approving a mortgage, a bank tried to allocate a conveyancer directly to one of our clients for a cost of £600. When our client explained that he already had a solicitor, he was told this fee would apply anyway. As the correct figure was £160, it suggests that the bank was quoting the full conveyancing fee in what appears to be an attempt to encourage our client to use their chosen provider.
We had been acting for a lender with their authority, but two days before exchange, they withdrew this authority and told our client to either use another law firm for the entire transaction, or to use one of their chosen firms to represent them for a fee of nearly £1000. Given the time pressure, our client had no choice but to use the firm that was representing the lender, resulting in a doubling of their fees.”
Given the much publicised pressure on banks to act fairly, we are disappointed that some do not appear to be acting in the best interests of their clients. It is particularly galling when a client must revert to the financial ombudsman because a nationalised firm refuses to disclose the fees that their chosen law firm will be charging. This abuse of power must be stopped, and we are delighted that the ombudsman has acted quickly but are very concerned about the approach some lenders are taking.”
Notes to Editors
The Partnership is a new breed of law firm, employing London-trained solicitors, specialising in fast and efficient transactions. For more information go to www.thepartnershiplimited.com. A PDF version of this press release is available.
Media enquiries
Peter Ambrose, The Partnership – 01483 579978 or email info@thepartnershiplimited.com
Guildford, Surrey – 22nd January 2012 – The Partnership has evidence that banks and building societies are misleading their mortgage clients over legal representation and costs, with the result that one of their clients has instructed the financial ombudsman to take direct action.
Traditionally, solicitors represented both the buyer and the mortgage lender in the purchase of a property. However, lenders, concerned about the increasing levels of mortgage fraud, have recently started to dictate who may represent them, by setting up panels of “authorised” firms.
This change has lead to warnings that consumer choice was being restricted, but The Partnership now has specific evidence where clients are being penalised due to their selection of mortgage provider. These include a bank misleading a client over costs, another forcing a client to use an expensive London solicitor, and a nationalised lender refusing to disclose their charges.
Peter Ambrose, Director of The Partnership, is extremely concerned; “We do not mind lenders dictating who may represent them - indeed, we would prefer that ALL lenders used their own chosen law firms to represent themselves as it removes a potential conflict of interest that we currently face.
However, our evidence shows that lenders are abusing their position, to the detriment of their clients. After approving a mortgage, a bank tried to allocate a conveyancer directly to one of our clients for a cost of £600. When our client explained that he already had a solicitor, he was told this fee would apply anyway. As the correct figure was £160, it suggests that the bank was quoting the full conveyancing fee in what appears to be an attempt to encourage our client to use their chosen provider.
We had been acting for a lender with their authority, but two days before exchange, they withdrew this authority and told our client to either use another law firm for the entire transaction, or to use one of their chosen firms to represent them for a fee of nearly £1000. Given the time pressure, our client had no choice but to use the firm that was representing the lender, resulting in a doubling of their fees.”
Given the much publicised pressure on banks to act fairly, we are disappointed that some do not appear to be acting in the best interests of their clients. It is particularly galling when a client must revert to the financial ombudsman because a nationalised firm refuses to disclose the fees that their chosen law firm will be charging. This abuse of power must be stopped, and we are delighted that the ombudsman has acted quickly but are very concerned about the approach some lenders are taking.”
Notes to Editors
The Partnership is a new breed of law firm, employing London-trained solicitors, specialising in fast and efficient transactions. For more information go to www.thepartnershiplimited.com. A PDF version of this press release is available.
Media enquiries
Peter Ambrose, The Partnership – 01483 579978 or email info@thepartnershiplimited.com
Tuesday, 17 January 2012
Brave new world or just the emperor's new clothes?
Over the past week we've discovered that the brave new world promised by the breaking of the monopoly on legal services is not so brave or new after all, with firms offering traditional services but just with new brochures.
On October 6th 2011, the Legal Services Act enabled non-lawyers to own law firms. This change promised innovative new offerings from modern firms and it is widely expected that residential conveyancing would be the first service to experience this change.
However, it appears that rather than innovation, its more a lack of imagination that has come to the fore, with several new offerings merely re-packaging existing services under a new name.
In the first instance, a major agency chain is promising a new fast conveyancing service as part of their selling process. The brochures are covered with pictures of happy smiling house buyers, delighted with their 24 hour access to case information and friendly solicitors getting their deals done in days. The disappointing reality merely just another name for a tired old legal panel, paying local solicitors a fraction of the fee to carry out the work. Nothing new beyond the name here (and of course the disatisfaction from the same lawyers).
Another firm is offering an interesting model with low costs and high introductory fees to agents. Again, promising 24 hour access to dedicated staff; this time it's just another name for a high-volume conveyancing factory, known to have high fall-through rates and slow turnaround times.
Its extremely disappointing to see this lack of commitment at first hand - it seems that innovation has yet to come to the legal services market and what we see are merely false starts on the road to innovation.
Here's an idea for companies looking to offer legal services. Instead of pimping out non-lawyers and offering generic support email addresses as a communication substitute why not take the plunge and actually employ staff and invest in systems to provide the service directly.
Or is that a step too far in this brave new world?
On October 6th 2011, the Legal Services Act enabled non-lawyers to own law firms. This change promised innovative new offerings from modern firms and it is widely expected that residential conveyancing would be the first service to experience this change.
However, it appears that rather than innovation, its more a lack of imagination that has come to the fore, with several new offerings merely re-packaging existing services under a new name.
In the first instance, a major agency chain is promising a new fast conveyancing service as part of their selling process. The brochures are covered with pictures of happy smiling house buyers, delighted with their 24 hour access to case information and friendly solicitors getting their deals done in days. The disappointing reality merely just another name for a tired old legal panel, paying local solicitors a fraction of the fee to carry out the work. Nothing new beyond the name here (and of course the disatisfaction from the same lawyers).
Another firm is offering an interesting model with low costs and high introductory fees to agents. Again, promising 24 hour access to dedicated staff; this time it's just another name for a high-volume conveyancing factory, known to have high fall-through rates and slow turnaround times.
Its extremely disappointing to see this lack of commitment at first hand - it seems that innovation has yet to come to the legal services market and what we see are merely false starts on the road to innovation.
Here's an idea for companies looking to offer legal services. Instead of pimping out non-lawyers and offering generic support email addresses as a communication substitute why not take the plunge and actually employ staff and invest in systems to provide the service directly.
Or is that a step too far in this brave new world?
Wednesday, 21 December 2011
The Partnership Newsletter - December 2011
"Nobody expects the Spanish inquisition"
It appears that solicitors who are members of the Law Society's new Conveyancing Quality Scheme (CQS) needn't worry about a Pythonesque "fear and surprise" reprisal if they break the guidance rules.
The Law Society introduced the CQS to help traditional high street law firms differentiate themselves from ordinary legal providers. Although it is designed to show that member firms are always courteous and offer excellent service, our recent experience with some CQS firms indicates that this may not always be the case.
Following some recent exchanges of the nature that we thought solicitors only reserved for estate agents, we checked with the Law Society what sanctions were available where firms breach their rules. The answer was that there are none. The words teapot and chocolate spring to mind, although not necessarily in that order.
Chancel repair liabilities - the clock is ticking
Over recent years, it has become a standard requirement for buyers (particularly when getting a mortgage) to check whether there is any liability for homeowners to pay for the upkeep of the local church, through a rather arcane law enacted centuries ago. Although there have not been many cases, this right expires next year, so there is a possibility that some churches may look to make the most of this opportunity.
The potential liability is real and we will be introducing a low-cost service next year for homewners to check whether they have this liability and take the necessary steps to protect themselves.
SDLT Changes
The government and Revenue & Customs have warned they will close the loopholes that people are exploiting to avoid Stamp Duty Land Tax (SDLT). Indeed, last month, they announced they would remove one method, whereby buyers used companies to buy properties, by increasing the rate to 5%. Discussions with agents has shown a marked decrease in the numbers of clients trying to avoid SDLT, and we have witnessed numbers falling.
Whilst currently, mitigating SDLT can be done legally, some are speculating that in the future, it may be considered to be a criminal offence.
Finally, the government appears committed to its decision to scrap the SDLT exemption for first time buyers spending less than £250K after 24th March 2012.
New website and online case tracking
We will be launching our new-look website in January, with the focus very much on social media and information delivery. We will also be extending our Partnership League system so agents will be able to track the progress of their client's cases online. This will enhance our current offering of our fast-response email and 7 days-erp-week telephone access.
... and finally ... we don't DO end of year reviews, so it just remains for us to wish a merry Christmas and a happy new year to our readers!
It appears that solicitors who are members of the Law Society's new Conveyancing Quality Scheme (CQS) needn't worry about a Pythonesque "fear and surprise" reprisal if they break the guidance rules.
The Law Society introduced the CQS to help traditional high street law firms differentiate themselves from ordinary legal providers. Although it is designed to show that member firms are always courteous and offer excellent service, our recent experience with some CQS firms indicates that this may not always be the case.
Following some recent exchanges of the nature that we thought solicitors only reserved for estate agents, we checked with the Law Society what sanctions were available where firms breach their rules. The answer was that there are none. The words teapot and chocolate spring to mind, although not necessarily in that order.
Chancel repair liabilities - the clock is ticking
Over recent years, it has become a standard requirement for buyers (particularly when getting a mortgage) to check whether there is any liability for homeowners to pay for the upkeep of the local church, through a rather arcane law enacted centuries ago. Although there have not been many cases, this right expires next year, so there is a possibility that some churches may look to make the most of this opportunity.
The potential liability is real and we will be introducing a low-cost service next year for homewners to check whether they have this liability and take the necessary steps to protect themselves.
SDLT Changes
The government and Revenue & Customs have warned they will close the loopholes that people are exploiting to avoid Stamp Duty Land Tax (SDLT). Indeed, last month, they announced they would remove one method, whereby buyers used companies to buy properties, by increasing the rate to 5%. Discussions with agents has shown a marked decrease in the numbers of clients trying to avoid SDLT, and we have witnessed numbers falling.
Whilst currently, mitigating SDLT can be done legally, some are speculating that in the future, it may be considered to be a criminal offence.
Finally, the government appears committed to its decision to scrap the SDLT exemption for first time buyers spending less than £250K after 24th March 2012.
New website and online case tracking
We will be launching our new-look website in January, with the focus very much on social media and information delivery. We will also be extending our Partnership League system so agents will be able to track the progress of their client's cases online. This will enhance our current offering of our fast-response email and 7 days-erp-week telephone access.
... and finally ... we don't DO end of year reviews, so it just remains for us to wish a merry Christmas and a happy new year to our readers!
Tuesday, 13 December 2011
Solar panels - its deja vu all over again
We should have known.
In our last blog, we found it within our hearts to compliment the government on actually doing what they said they would do when it came to eradicating tax avoidance with Stamp Duty Land Tax.
We believed that we were witnessing a new political dawn.
However, as Nick Clegg will testify, a week is a long time in politics. Therefore, we're not surprised to see, that, unfortunately, Westminster is back to its old ways when it comes to shifting policy goal posts overnight.
This time it's the solar panel industry.
Recent years have seen massive growth in the sale of solar panels - the promise of free electricity and money from the government paying home owners to produce it, was simply too strong for many. Indeed, this business opportunity, with its green overtones, seemed ideal for domestic energy assessors, (DEAs) many of whom had lost significant income from the overnight scrapping of HIPs, where they made their money.
The key to the business was the "feed-in tariff" - money from the government paying consumers to generate their own electricity. Without it, the cost of buying (or leasing in many cases) these solar panels simply didn't make financial sense. This fee was guaranteed. (Or so the franchise salespeople told their franchisees).
The amount paid was up for review in April 2012, and a consultation period was underway. However, in a HIP-like move, the government has overnight reduced this tariff by 50%, making the proposition for many, unviable.
Observers estimate this will cost 20,000 jobs. Add that to the estimate of 10,000 jobs lost when HIPs were abandoned, and suddenly, Cameron's new caring Conservatism doesn't appear to be quite so friendly after all.
In our last blog, we found it within our hearts to compliment the government on actually doing what they said they would do when it came to eradicating tax avoidance with Stamp Duty Land Tax.
We believed that we were witnessing a new political dawn.
However, as Nick Clegg will testify, a week is a long time in politics. Therefore, we're not surprised to see, that, unfortunately, Westminster is back to its old ways when it comes to shifting policy goal posts overnight.
This time it's the solar panel industry.
Recent years have seen massive growth in the sale of solar panels - the promise of free electricity and money from the government paying home owners to produce it, was simply too strong for many. Indeed, this business opportunity, with its green overtones, seemed ideal for domestic energy assessors, (DEAs) many of whom had lost significant income from the overnight scrapping of HIPs, where they made their money.
The key to the business was the "feed-in tariff" - money from the government paying consumers to generate their own electricity. Without it, the cost of buying (or leasing in many cases) these solar panels simply didn't make financial sense. This fee was guaranteed. (Or so the franchise salespeople told their franchisees).
The amount paid was up for review in April 2012, and a consultation period was underway. However, in a HIP-like move, the government has overnight reduced this tariff by 50%, making the proposition for many, unviable.
Observers estimate this will cost 20,000 jobs. Add that to the estimate of 10,000 jobs lost when HIPs were abandoned, and suddenly, Cameron's new caring Conservatism doesn't appear to be quite so friendly after all.
Wednesday, 7 December 2011
Good to see the government grasping the mettle
To be completely frank, when we saw a Conservative prime minister appear at the doors of number 10 Downing Street last year, the last thing we expected would they would actually resolve a taxation issue that affects many of their supporters.
However, we're delighted to see that after various promises over the past six months, that they are cracking down on those people looking to avoid Stamp Duty Land Tax (SDLT).
In addition to the budget earlier this year when many avoidance schemes were outlawed, we read that the draft Finance Bill 2012 now includes a change to SDLT rules outlawing avoidance for properties over £1m, where previously, buyers could exploit a loophole which would save them thousands of pounds.
We remain concerned that those people that have been sold such avoidance schemes in the past will end up having to find the money that they have saved (not forgetting the 50% fee that they paid to the providers that sold them the "cast-iron" schemes) when the Revenue and Customs finally catch up with them.
However, we're delighted to see that after various promises over the past six months, that they are cracking down on those people looking to avoid Stamp Duty Land Tax (SDLT).
In addition to the budget earlier this year when many avoidance schemes were outlawed, we read that the draft Finance Bill 2012 now includes a change to SDLT rules outlawing avoidance for properties over £1m, where previously, buyers could exploit a loophole which would save them thousands of pounds.
We remain concerned that those people that have been sold such avoidance schemes in the past will end up having to find the money that they have saved (not forgetting the 50% fee that they paid to the providers that sold them the "cast-iron" schemes) when the Revenue and Customs finally catch up with them.
Wednesday, 23 November 2011
The Partnership Newsletter - November 2011
"There's something here that doesn't quite add up"
The great Quincy (MD) would no doubt be a little surprised to see himself quoted in a property newsletter. Its because we're very confused. In our experience agents always ask for the name of the solicitor to give to their clients, clients only recommend individual solicitors to friends, and clients always want to speak directly to that particular person. Therefore, as its clearly the personal approach that most clients want, why are lawyers worrying about large "nameless" firms taking business from them? We are gaining market share by simply communicating regularly with agents and clients, offering full availability and co-operation and the results have been very encouraging. It appears that its simply a case of "going back to basics" - now where have we heard THAT before?
Stamp Duty Land Tax Mitigation - more difficulties for tax avoiders
The BBC has highlighted how Revenue & Customs are taking a more robust line when it comes to home buyers using Stamp Duty Land Tax (SDLT) mitigation schemes to reduce the amount of tax they have to pay. Revenue and Customs are also following up on their commitment to pursue people who have avoided this tax - there are now reports of clients receiving letters from them questioning the amount of tax paid on transactions from several years ago. Lenders are refusing to provide mortgages to people that are using these schemes and it is expected that their number will grow.
Recent case highlights potential problems for unmarried couples
A recent case case has highlighted the problems that can arise when unmarried couples that have bought property together, separate. Patricia Jones and Leonard Kernott, an unmarried couple, had bought a property together but following their separation, Mr Kernott had tried to claim 50% of the share of the value of the property. The court ruled that this was not the case and reinstated the original judgement giving Mr Kernott only 10%. This underlines the importance for unmarried couples to organise both a Will and also a Declaration of Trust when buying together, and all buyers should be aware of the risks of not organising these.
7 Days a week availability
Agents tell us that one of their biggest frustrations is not being able to speak to solicitors out of hours, particularly Saturdays. That's why we now offer 7 days per week telephone availability for agents. This is proving very popular where clients are looking to make a purchase and want to have a quote and paperwork organised immediately. Please email us for contact information.
The great Quincy (MD) would no doubt be a little surprised to see himself quoted in a property newsletter. Its because we're very confused. In our experience agents always ask for the name of the solicitor to give to their clients, clients only recommend individual solicitors to friends, and clients always want to speak directly to that particular person. Therefore, as its clearly the personal approach that most clients want, why are lawyers worrying about large "nameless" firms taking business from them? We are gaining market share by simply communicating regularly with agents and clients, offering full availability and co-operation and the results have been very encouraging. It appears that its simply a case of "going back to basics" - now where have we heard THAT before?
Stamp Duty Land Tax Mitigation - more difficulties for tax avoiders
The BBC has highlighted how Revenue & Customs are taking a more robust line when it comes to home buyers using Stamp Duty Land Tax (SDLT) mitigation schemes to reduce the amount of tax they have to pay. Revenue and Customs are also following up on their commitment to pursue people who have avoided this tax - there are now reports of clients receiving letters from them questioning the amount of tax paid on transactions from several years ago. Lenders are refusing to provide mortgages to people that are using these schemes and it is expected that their number will grow.
Recent case highlights potential problems for unmarried couples
A recent case case has highlighted the problems that can arise when unmarried couples that have bought property together, separate. Patricia Jones and Leonard Kernott, an unmarried couple, had bought a property together but following their separation, Mr Kernott had tried to claim 50% of the share of the value of the property. The court ruled that this was not the case and reinstated the original judgement giving Mr Kernott only 10%. This underlines the importance for unmarried couples to organise both a Will and also a Declaration of Trust when buying together, and all buyers should be aware of the risks of not organising these.
7 Days a week availability
Agents tell us that one of their biggest frustrations is not being able to speak to solicitors out of hours, particularly Saturdays. That's why we now offer 7 days per week telephone availability for agents. This is proving very popular where clients are looking to make a purchase and want to have a quote and paperwork organised immediately. Please email us for contact information.
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