The Law Society’s Conveyancing Protocol (usually just referred to as the “protocol”) first came into effect on 1 April 2011. It was replaced on 19 August 2019 with an amended version.
The original protocol was created by the Law Society to improve how conveyancing transactions were dealt with. The protocol provided a framework for firms to follow and a detailed list of ‘dos and don’ts’. Although the protocol has been described by some as ‘conveyancing by numbers’ it has brought a uniform structure to conveyancing transactions. Essentially the protocol made most firms ‘sing from the same hymn sheet’. The procedures the protocol set out are intended to ensure that clients are treated fairly and are protected, and that the entire process is dealt with more efficiently.
The protocol splits transactions into six stages:
1) Obtaining instructions
2) Pre-exchange
3) Prior to exchange of contracts
4) Exchange of contracts
5) Completion
6) Post-completion
Each stage provides guidance about the procedure to follow and help with how work is organised. There are also some timeframes given for when certain stages should be completed.
The existing property forms, standard conditions of sale and formulas for exchanging contracts will remain the same. Some of the changes that have been made in the updated protocol include:
• Reducing the number of steps that make up the current six-stage process.
• Emphasising that all documents sent by email should be clearly identifiable and sent separately. This is important because many transactions now take place digitally.
• Highlighting that due to the changes to the stamp duty land tax regime (mainly that it has become more complicated) firms should encourage clients to seek specialist tax advice when necessary.
• Outlining steps firms can take to protect themselves and their clients from the growing problem of transaction fraud, phishing and email scams.
Finally, it should be noted that when creating the updated protocol there has been some attempt to consider the government’s proposed reforms to the leasehold system in England. This is welcome as reforms to leasehold are high on the government’s agenda for law reform. Particular areas which may be included in any changes to leasehold include:
• All new-build houses to be sold as freehold except in exceptional circumstances
• Ground rents on new leases to be reduced to £0
• A new time limit of 15 working days to provide leasehold information to a prospective buyer
• A maximum fee of £200 + VAT for freeholders and managing agents to produce leasehold information to prospective buyers in the form of a leasehold property enquiry (LPE1) pack
• Buyers who have already been “incorrectly” sold a leasehold home being able to acquire the freehold outright at no extra cost
Because of the scope of possible leasehold reforms it may be that a further update will be needed to the conveyancing protocol, which we will report on in due course.