Conveyancing Information Executive statement: Vendor driven due diligence reports
This news article has been written by, and published on behalf of, the Conveyancing Information Executive.
As leading suppliers of property due-diligence searches to the UK conveyancing market, Conveyancing Information Executive (CIE) members shared their unique insight with market stakeholders throughout 2020. One of the most discussed areas focused on the mutual goal of speeding up housing transactions.
One pertinent example of CIE input to this debate related to the Home Buying and Selling Groups’ initial MOU first drafted back in June 2020. We were compelled to comment on those aspects of the MOU that needed further consideration to ensure the outcomes were fully understood in the context of property information searches. Moving the procurement of property due-diligence searches from the purchaser to the vendor has some heavyweight considerations for the conveyancing market to understand
To be clear on our position, CIE are not against sellers’ packs if their implementation could guarantee the speeding up of transactions. Further, this aim of driving down overall
transaction speed is one of the objectives of the CIE along with the wider market and its stakeholders.
However, based on our members recent figures and industry bodies statistics, the turnaround time of key search types are sufficiently expedient so as not to be the main cause of delays to transactions. The majority of Local Authorities in England and Wales are taking <10 days to return official local searches, official drainage & water searches take on average just over 2 working days and environmental searches are returned within 1 working day.
Based on this information, the CIE are of the opinion that the inclusion of search reports into sellers packs will have no positive effect on overall transaction times.
There are far more beneficial component parts of the transaction process to focus attention on and expedite, if we are to be successful in making transactions move faster.
More importantly, the responsibility of procuring searches should in our opinion remain with the buyer who clearly carries the ultimate risk (along with lender) and needs to be confident in the searches they have obtained rather than rely on searches purchased by someone else with differing underlying drivers and requirements (i.e., a successful sale). One outcome of transitioning the responsibility of search procurement to the vendor could be the exertion of downward pressure on report quality and standards over time, given a shift in the underlying requirements of the procurer.
Sat beneath this proposed transition of property due-diligence searches from the purchaser to the vendor, is the underlying market principle of ‘caveat emptor’. The importance of this principal throughout the legal process will ultimately lead to a duplication of searches on both the vendor and the purchaser side of the transaction. This in turn has its own challenges to manage from dispute resolution (i.e. two different searches with different outcomes) to reliance provisioning, all of which add more time to a process which is universally accepted to be too long.
While the answers are not easy, the CIE looks forward to continuing to contribute to the market aim of making transactions faster and offering our unique insight across key market stakeholders and decision makers as we move through 2021.
For further information visit conveyinfoexec.com