Conveyancing Standards

It is important to note that the current system places no requirements on local planning authorities to pursue developers for evidence of compliance with planning conditions. The expectation is that a developer will want final planning certification, but that is all it is: an expectation. What if a developer does not care about obtaining the certification? Their objective is to build, sell and maximise profit. So here we are; we have just purchased a property in good faith following the advice of the conveyancing solicitor—who, by the way, was recommended by the developer—and the property does not have planning permission. Certification costs could be extremely significant, and we have no recourse to the developer because they no longer exist as a legal entity.

My second example is probably more widespread than my first, and I suspect that similar examples may be present in several MPs’ casework folders. Imagine we are very keen to buy a property. At the point of purchase, our solicitor handling the conveyancing might highlight the fact that there is a contract for maintenance of green spaces on the estate—grass cutting, hedge trimming and so on—as well as the fact that those areas do not belong to any of the properties and the cost is about £100 per year. Do we still want to buy the property? Of course we do. That is not a lot of money in the grand scheme of things, and if it means securing the property of our dreams, of course we will pay it.

What is not discussed with sufficient clarity at the point of conveyance, if at all, is that the small print of the maintenance contract will state that contract owners can increase the price as and when they wish, and there is virtually no recourse within the contract for poor workmanship or lack of clarity. The fee of £100 per year may soon become £500 per year, and the grass cutting may be once a year instead of once a month. These areas remain unadopted by local councils—something that I find a little too convenient. How would you feel, Mr Speaker, if you paid an even higher council tax for services you did not receive, compared with a neighbour around the corner who pays less and gets more?

Usually, when a service is not rendered, one may choose not to pay. That cannot happen here, because these contracts state that a charge will be placed against the property, so it cannot be sold without payment. Furthermore, homeowners cannot complain to anybody, because an unresponsive contractor is virtually unaccountable and has plenty of legal cover, while homeowners are usually bounced around from contractor to subcontractor to developer in a never-ending merry-go-round.

Those two scenarios are real. The same thing has happened in Dudley and to other people from the Black Country whom I have met. People find themselves financially exposed. The system is being gamed by unscrupulous developers and contractors, because it is not transparent enough to shine a light on the potential risks to people when they are buying a property. People might feel that the very fact that a solicitor is handling the conveyance means that they are sufficiently protected. They employ a solicitor not just to carry out due diligence for them, but to highlight any potential downsides. That is not happening with enough robustness, and that is why I am presenting the Bill.

That Marco Longhi, Nicola Richards, Gareth Bacon, Sir John Hayes, Peter Gibson, Jamie Stone, Sir David Amess, Lee Anderson, Paul Howell, Ian Levy, Jim Shannon and Sally-Ann Hart present the Bill.

Marco Longhi accordingly presented the Bill.