If you have lost your insurance certificate then the NHBC will issue a replacement for a small fee. If you quote the buildmark number they will be able to help you much more easily, so it is wise to keep a note of the buildmark number separate from the certificate just in case.

I wondered why people might want to do their own conveyancing. Here’s what I came up with:

1. To save money. A potential saving of £400 – £1000 or so.
2. To have more control over the process and ‘cut out the middleman’, especially if they have had bad experiences with conveyancing in the past.

Then I thought why people might not want to:

1. There are many cases where it is unwise to act for yourself: if the property is leasehold, commonhold, unregistered, newbuild, or if there is a transfer of part. In fact, the only situation in which you should even consider representing yourself is if you are selling the whole of a freehold, registered property.
2. If you are buying with a mortgage then the lender won’t let you act for them. You’ll still have to pay a lawyer to act for the lender in checking the title and completing the charge. Their fees will be nearly as much as a standard conveyancing charge and you will have to copy all the documents you receive from the seller’s solicitors to them, as well as deal with their own enquiries, which are often numerous. They will probably catch something you missed and ask you to fix it, which you will have no clue how to do. Ultimately, you will waste much more time than if they just acted for you in the purchase to begin with.
3. If you’re selling and have a mortgage you will need to get the buyer’s solicitor to agree to pay off your mortgage directly as you will be unable to give the necessary undertaking yourself. They would be within their rights to charge you for this.
4. Who will hold the deposit after exchange? Your buyer is unlikely to be happy with you keeping it so you will need to arrange for the buyer’s solicitor to hold it for you.
5. Many buyers/sellers and their solicitors will be reluctant to deal with you directly and may advise their clients to pull out.
6. If you are buying a property, how will you know what to look for in the title? Can years of training, experience and shelves of textbooks be condensed into a single DIY conveyancing handbook that you bought for £10?
7. Houses are the most valuable asset people own. Why would someone pay hundreds of thousands of pounds for a property but balk at paying a few hundred to get the legal work done right? This is the equivalent of paying £50,000 for a guitar and putting it in a cardboard box, rather than buying a hard-case for £100.
8. The worst that can happen is you lose a few hundred thousand pounds and your house.
9. If a solicitor gets it wrong they have insurance and you can sue them. If you get it wrong you have no recourse.
10. You might miss a problem that would be obvious to a professional.
11. Remember the old saying: a person who represents themselves has a fool for a client. It would be rare for a conveyancing transaction to proceed without a few bumps along the way. How would you deal with problems when you may not even understand why there is a problem? Would the solicitor on the other side have to explain the problem to you? Why should they?

When people choose to act for themselves what it really means is that there is going to be more work for the lawyer acting for their buyer/seller.

In summary, you are perfectly entitled to act for yourself but it makes things much more difficult and therefore things usually end up taking longer. As I said in a previous article:

I am fed up to the back teeth with people who know nothing about conveyancing spouting off glibly about it as if it were the easiest thing in the world. Conveyancing is very hard, highly skilled work

I’ll end this piece with a look at a particularly infuriating example of the behaviour mentioned above, written by an estate agent no less! Fancy that! Isn’t it amazing how he’s managed to cover ‘all the tricks of the trade’ in 152 pages* when the Law Society’s Conveyancing Handbook runs to 1291 pages? Scam or genius, you decide.

(* according to Amazon)

“What’s with all the crap about conveyancers playing golf all the time? I haven’t met a single conveyancer who plays golf. Almost all of them are working their arses off every day!”

Not to mention the unpaid overtime!

If the seller has received notice of a planning application then they may reveal it on the property information form. However, as a prudent buyer, you ought not to rely on this and should always make your own enquiries.

However, let’s not forget that most conveyancing fee earners are not solicitors but secretaries, paralegals and legal executives. Many solicitors expect their secretaries to do a lot of the conveyancing for them. Often these secretaries end up in fee earning positions themselves. Some may choose to qualify as legal executives, licensed conveyancers, or even solicitors – if they have the time and money to devote to further education. In the meantime they are, to the firms employing them, a source of cheap labour. In this area of the law, where cost-savings are key (due to incredibly low or even non-existent profit margins), unqualified conveyancers working for solicitors enable firms to keep going.

The average case worker may well be paid less than an experienced legal secretary, but in any case is unlikely to be paid more than £30,000 p.a. and may be paid as little as £16,000 p.a.

The general formula for calculating the pay of fee earning lawyers is to take the total annual costs they bring in and divide by three. Therefore our solicitor on £40K should be earning the firm £120K a year, or £10K a month on average. Now consider that fees for conveyancing increase according to the value of the property involved. Also consider that leasehold properties (i.e. flats) take about twice as long to deal with. Naturally, the partners and senior solicitors will nab all the high value work (usually freehold) and so be able to earn more per file than the junior conveyancer doing flats for a pittance. Our solicitor can make his or her target of £10K a month by cherry-picking the most profitable work. Our junior, however, is stuck doing more work for less money and will therefore find it very hard to get a raise when the time comes to review their salary.

Therefore, the short answer is:

Not enough!

Let’s start with the word ‘indemnity’. The Oxford Dictionary of Law (which, incidentally, contains a misleading definition of ‘indemnity insurance policy’) defines it as:

“An agreement by one person (X) to pay to another person (Y) sums that are owed, or may become owed, to him by a third person (Z). It is not conditional on the third person defaulting on the payment, i.e. Y can sue X without first demanding payment from Z. If it IS conditional on the third person’s default […] it is not an indemnity but a guarantee.”

Under a policy of indemnity insurance, the insurer agrees to indemnify the insured against specified costs or losses which may be incurred in the future (which means that if the insured incurs such costs or losses then the insurer will pay for them instead, up to an agreed maximum. Now let’s move on to the various forms this can take.

High Loan-to-Value fee or Mortgage Indemnity Guarantee (“MIG”)
This is what the Oxford Dictionary of Law thinks an indemnity insurance policy is. Some lenders make a charge if you borrow a high proportion of the value of a property. This usually pays for the lender to take out indemnity insurance in case you default on the loan. The key thing here is that the policy is for the lender’s benefit only and, if it pays out, the insurer will seek to recover from you everything they pay to the lender. This indemnity policy should therefore not be confused with mortgage payment protection.

Professional Indemnity Insurance (e.g. Solicitors’ Indemnity Insurance)
This is the insurance cover that professionals (e.g. solicitors, doctors, accountants) are required to have in place. If a professional is negligent (for example) and becomes liable to a third party (usually a client) for costs and/or compensation, this is what pays out. Refer to my previous article The Definitive Conveyancing Quotation for a discussion of how some solicitors hide their fees by charging an ‘indemnity contribution’ as a disbursement (not to be confused with the genuine indemnity policies mentioned below).

Indemnity Insurance Policies in Residential Conveyancing
Residential conveyancing is a battle. There are so many things that lawyers have to check that most properties do have something ‘wrong’ with their legal title. This may be a serious problem (e.g. lack of mutually enforceable covenants in a lease, meaning that you can’t force the other tenants in the block to stick to the terms of their leases, which makes a lease defective and must be remedied) or a bureaucratic problem (e.g. some lawyers’ inability to take a practical view of matters, or a mortgage company’s stipulation).

An indemnity policy in the sense usually meant in residential conveyancing is a policy with a one-off fee which covers a specific defect in the title. The policy usually pays out if the defect results in a loss.

No one will know at the outset of a transaction whether an indemnity policy will be necessary (except in the case of a re-mortgage where an indemnity policy is being taken out in place of undertaking a local search).

Two prolific providers of indemnity insurance policies are Countrywide Legal Indemnities and Guaranteed Conveyancing Solutions. Both provide lawyers with self-issue packs, which enable lawyers to issue a range of common policies on demand. Solicitors must reveal to you any commission they are paid and get your permission to keep it (not sure about licensed conveyancers) so you can be sure they have no financial interest in proposing a particular policy. Some common policies are:

• Lack of planning permission
• Lack of building regulations consent
• Restrictive covenant (may be necessary if a covenant is being breached – often taken out by developers at vast expense)
• Lack of consent for building over a sewer (pays out if the water board tear down your house to get at the sewer)
• Local search delay/expiry/omission
• Maisonette (covers a number of common defects found in maisonette leases)
• Absentee landlord (and a number of other leasehold problems)

The cost of these policies varies, depending on the value of the property and the type of policy required. Costs may run from £25 to £250 or more.

If a policy is required then the buyer’s solicitor should advise them fully on the terms of the policy (give them a copy of the terms and conditions and statutory disclosure document, explain what they have to do, why it’s necessary, what the alternatives are, explain what it covers, when it pays out and how much etc).

It will nearly always be the buyer’s solicitor (after checking the draft contract package) who discovers a defect and asks for an indemnity policy to be put in place at the seller’s expense. The seller’s solicitor will advise their client on whether it is necessary to pay for the policy and will often write back as a matter of course saying “if the buyer wants it they can pay for it” as a way of starting negotiations. Inexperienced lawyers are often particularly eager to ask for a policy (as they do not yet have the confidence required to take a reasonable view and want to cover their backs) and can get quite insistent. Sometimes it will be clear that a policy is unnecessary and sometimes it will be equally clear that one is required. However, in the majority of cases it will end up being a matter of negotiation between the buyer and the seller. It is not unusual for a seller to pay £50 for a policy rather than hold up the sale while the other side dickers. Another common strategy is for the seller and buyer to agree to share the cost of the policy.

The most frequently requested policies are for lack of building regulations consent. This is because of a widely misunderstood case (described on the RICS website as a ‘licence to print money’ for local authority surveyors) called Cottingham v Attey Bower & Jones, in which a firm of solicitors was held negligent because they had not adequately investigated whether works had building regulations consent. The works subsequently required £30,000 worth of repairs (Attey Bower didn’t have to pay very much of it, however, as the clients’ contributory negligence in not having a survey counted against them). One key point that was highlighted was that the belief that the council could not take any enforcement action after 12 months was erroneous, because the council could still apply for an injunction at any time.

Many lawyers have interpreted this to mean that they must now get a copy of the building regulations approval for any works. The usual bugbear is knocking through the kitchen into the lounge 20 or 30 years ago. There are an incredible number of properties that have had this done. The problem is that most councils don’t keep records of building regulations more than four or five years back. They will often conduct searches of their archived records for £150 or so (hence the ‘licence to print money’ quote) but what if they don’t turn up an approval? The chance to get an indemnity policy for lack of building regulations has passed (as you have alerted the council and the insurer will no longer cover it) so your only remedy is to pay for the council to come out and inspect the works. They will require you to expose the works for the inspection and you will then have to fix the damage afterwards. In all this is a very expensive (and completely unnecessary) rigmarole.

Ask any building control officer:

1. Whether they care if someone knocked a wall through without consent twenty years ago; and
2. If they have the budget to go to court to get an injunction for every knocked through wall in their borough.

The answer will almost certainly be, “no”. The only time it might be REASONABLE to believe that an injunction might be obtained would be if the works were dangerous. If that is the case then the buyer’s full structural survey will pick it up.

Another issue is to consider what good an indemnity policy is if there are structural defects. A policy for lack of building regulations will usually cover the cost of complying with any enforcement notice served by the council. As we have seen, the chance of enforcement is negligible. What is far more likely (and what happened in the case of Cottingham) is that you will have to pay out yourself to fix structural defects. If you have not had a structural survey then you will have no recourse to your surveyor or to the insurer (remember they only pay out if the council take action, not if your roof falls down).

Having said all that, a lack of building regulations policy could be useful in the case of fairly recent works where a survey reveals no defects and the buyer is in a hurry (if the buyer is not in a hurry then the correct thing to do for recent works is to insist that the seller get the council round to look at them and pay for any necessary remedial work). This CPL article takes a very pragmatic view,

I have spent a lot of time talking about these particular policies, but there are other instances where a policy may or may not be appropriate, e.g. breach of a 1835 covenant not to build more than one house on the land. In general, if a covenant has been openly and uninterruptedly breached for 20 years then a waiver is presumed (Hepworth v Pickles 1900 – conveyancers in the audience refer to Emmett 19.082). If the house was over 20 years old then you could safely do without a policy.

Another common covenant prohibits alterations to the property without the builder’s consent. Often these date from the 1940s and it is usually impossible to locate the builder’s successor in title. In such cases an indemnity policy might be appropriate to cover any potential enforcement against a recent extension.

As with nearly everything in conveyancing, there is no simple answer; it will depend almost entirely on the facts of the case. However, I hope this has been of some help in highlighting some of the issues involves.

This is not legal advice; refer to standard disclaimer, of course.

It is completely unnecessary to hire a lawyer to do your conveyancing; you can quite easily do it all yourself, in fact it only takes 5 minutes. All you have to do is sign a form. Lawyers are all overpaid and have their heads up their backsides! Did you know that all they do is play golf all day?

Surveys are also completely unnecessary, never have a survey unless you love wasting money! All you need to do is have a look round the place yourself (but if it’s more than 200 years old you’d better get your mate Dave the brickie to look at it too). Surveyors are all overpaid and have their heads up their backsides too! Did you know that all they do is play golf all day?

Thanks for reading, and good luck doing your own conveyancing. Remember, if it’s so bloody easy then do it yourself!

Fees
Also called ‘costs’, this is what the conveyancer is going to make out of the transaction. Fees vary throughout the country and in general a higher fee means a better service. The majority of firms operate on a fixed fee basis but some do charge on a time basis. Fees are very, very low these days. If you take the fee and divide it by 10 that’s roughly what you’re being charged per hour. Check this against the fee-earner’s notional hourly charge-out rate and it will invariably be lower. No value element is included so you’re getting really cheap legal time. One reason for this is that conveyancing is a loss-leader for many firms and for estate agency groups in particular. One national group’s annual accounts show that their conveyancing business loses them over £1 million a year but they make 60 times that in related estate agency, surveying and financial services. Very few lawyers make any serious money out of conveyancing.

Because fees are so low many firms are tempted to hide their costs and I will talk more about these (and how to recognise them) below.

The best advice I can give you is to ignore whatever figure is quoted for fees. Anything you will be quoted is very reasonable and you are getting a great deal. In my opinion conveyancers should charge percentages like estate agents. If anything, go for the higher quote if you have to choose between two lawyers you think are equally good: chances are you would prefer the one with the higher price if their prices were equal. Select on quality!

Oh, and the second best advice I can give you is: If you are moving on a tight budget, don’t. You’re only feeding house price inflation by stretching yourself to the limit. Especially with leasehold property (and especially especially with shared-ownership) there is a big risk you will get into trouble with paying service charge (which fluctuates year to year).

Expenses
Also called ‘disbursements’, these are things the conveyancer has to pay out to other people on your behalf. As these should remain fairly constant it is possible to go into detail about what they should be. Let’s break it down. I’ll use these codes in combination: sale (S), purchase (P), leasehold (L) and unknown (U) to show what type of matter each disbursement applies to. Figures are approximate.

Official Copy Entries (S) – £4 to £8
Paid to the Land Registry for an up to date copy of the register of title.

Other copy documents (S U) -£2 to £70
Sometimes it may be necessary to spend extra money on other copy documents. Examples might be deeds or leases from the Land Registry, copies of planning or building regulations from the council, copy NHBC documentation if it has been lost, etc. If the cost is significant you should be consulted first.

Telegraphic Transfer Fee (S P U) – £20 to £30
Not really a disbursement but often listed as one. Needed when paying off the mortgage on a sale, sending completion money on a purchase and/or sending money to your bank account.

Local Search (P) – £150 to £250
Cost varies from borough to borough. This is the basic conveyancing search carried out with the council. It answers a number of important questions (e.g. road adoption, compulsory purchase orders, road schemes, planning history, listed buildings, conservation areas etc.). A ‘personal’ local search can be carried out by a private search agency but this should only be done where the council has a long delay and time is of the essence. Some cut-price conveyancing services use personal searches by default as they are cheaper.

Drainage Search (P) – £40 to £50
Should be done on any freehold purchase but often not necessary on blocks of flats. Checks connection to mains drainage and water and provides a map of the public sewers and water pipes around the property (there are serious implications if a public sewer runs under the property). Some firms use the water bill to check connection to the drains, but this doesn’t check the route of the sewers.

Environmental Search (P) – £30
Searches the land near the property for records of potentially contaminative uses. Features an opinion from an environmental consultant as to whether the land is likely to meet the legal definition of contaminated (with associated cleanup costs).

Planning Search (P) – £24
The local search only shows planning applications on the property itself. This search shows planning applications on nearby properties, of great interest to buyers.

Other Searches (P U)
Other searches may be necessary, such as coal or tin mining searches or a commons registration search, depending on the location of the property. Costs vary.

Stamp Duty Land Tax (P) – 0/1/3/4% of purchase price
Government tax on property purchases. If the price is below £125K you pay nothing. Up to £250K you pay 1%, up to £500K you pay 3% and over £500K you pay 4%. In some disadvantaged areas the lower limit is raised to £150K.

Land Registration fee (P) – £40 to £700 depending on purchase price
Fee paid to the Land Registry to register the purchase (and mortgage if applicable). Their fees vary (link to .pdf).

Land Registry Search (P) – £2
A search is made at the Land Registry after exchange to see if anything on the register of title has changed and to grant you a period of priority over any other applications for registration.

Bankruptcy Search (P) – £2 per name
If you are buying with a mortgage then this search will be done.

Landlord’s fees (P L U) – £5 to £200
With leasehold property there can be a number of obligations under the lease, like serving notice on the landlord with details of the new owner and mortgage, obtaining landlord’s consent to sell or entering into a deed of covenant. If there is a management company you may have to pay for a new share certificate to be issued. The costs can soon rack up but you won’t know what they are until your lawyer gets the draft contract.

Enquiries of Landlord or Managing Agent (S L) – £0 to £250
When selling a leasehold property it will be necessary to raise standard enquiries with the landlord or managing agent. They often charge a hefty fee for this.

Note: This list will be completed soon

Hidden Costs
I will talk for a little while about hidden costs. For the reasons outlined above, everyone is trying desperately to make some money out of conveyancing. Recognising that many people choose a firm based on price alone, it can be tempting to quote low and then bump up the price later. There are a few ways this can be done.

One way is to include ‘disbursements’ that really go into your own pocket. A good example of this is ‘postage and telephones’, which should be included in the fees as they are overheads of the business (although if they have to send a 5kg package to Australia then of course it is perfectly acceptable to bill that separately, we’re talking about normal correspondence costs here). Another example of this is a so-called ‘indemnity contribution’ (not to be confused with an indemnity policy) of £40 or so on a sale. The idea is that this is a ‘contribution’ towards the lawyer’s professional indemnity insurance policy. This is an overhead; you contribute to it already by paying fees. It is not a legitimate disbursement. A pretty good test of a legitimate disbursement is whether you can see a receipt for it from the person the lawyer paid it to.

Another way is to charge separately for certain elements of the work being done. This is a tricky one, as it is perfectly reasonable to charge £50 + VAT to fill out the 20 page stamp duty tax return, £25 + VAT to arrange a bank transfer (required to pay off mortgage, transfer funds on completion etc.) or other extra fees where the property is leasehold, new build, unregistered or whatever because this really does involve extra work and we are already operating on practically zero margin.

The problem arises when clients are not informed of these costs up front (and some firms do hide them away in the small print – I worked out that one firm quoting £350 as a flat fee actually rose to £600 by the time their standard extras had been included). It’s always best to ask what extra fees you could be charged, especially if the quote is low. Be particularly cautious of any firm that would charge you extra money if completion takes place sooner than they would like. For example, I once worked at a firm with a policy of charging an extra £150 + VAT if completion took place sooner than two weeks after exchange. The idea was to deter clients from insisting on completing a few days after exchange, which creates extra work. In practice it was rarely charged (and I have since found that there are more effective ways of achieving this aim). However, one of my colleagues used to deliberately agree completion dates without reminding the clients of the penalty fee. The result was a surprise £300 + VAT on her clients’ bills (for a sale and purchase).

Online quotes
As you have seen, it’s quite easy to prepare a quote, given some basic information, and it follows that it is very easy to write a script to give quotes on your website (I have written some myself so I speak from experience). If a firm doesn’t have an online quote you might be justified in wondering if they are quite ‘with it’ technologically (although they might just be trying to hide their costs from the competition).

Conclusion
I hope this article has been helpful to you and welcome feedback via comments.

Don’t pay peanuts, or you’ll get monkeys. Take into account value for money when choosing a lawyer by all means, but never go with the lowest quote. We really don’t want to deal with the type of client who rings round a bunch of solicitors asking “how much?” and nothing else. This kind of client is hell to deal with in general because they don’t value the work we do for them and, by extension, they don’t value us. When you’re paying for expert legal advice, you have to respect the person giving that advice, or you may as well advise yourself (DIY conveyancing will be the subject of a later post). So… forget the price, it’s not what’s important and it will tell you nothing about how good the lawyer is. Instead, try something like:

Can you explain a bit about the process please?
Hint: Does this cue a great, client friendly explanation or nervous waffling?

Will you be handling the case yourself or will a team deal with it? What is your position in the firm/qualification/experience?
Hint: You will want to avoid the team style of working unless you like talking to people who have no idea who you are or what they’re supposed to be doing for you. Qualification is less important than experience. Look for at least 5 years experience.

Do you have a direct line/individual email?
Hint: Efficient communication is key.

Do you specialise in residential conveyancing?
Hint: Try not to use someone who does commercial property too. Avoid like the plague any lawyer who is also involved in any contentious aspect of law (e.g. litigation, family/matrimonial). Conveyancing is a co-operative process, if you get a litigation solicitor on the other side (or worse, your side) you may as well pull out now and save the search fees.

Can I expect a full, written report on title before exchange? Roughly how many pages will it be?
Hint: This is very important as there are a few ways people do this. The correct way is to provide a full, written report on title (10-20 pages of A4) bound up with copies of all the title documents. It will be an inch or two (or three) thick. Some lawyers just send you copies of all the documents. This is no use to you as you won’t be able to understand them on your own. Some lawyers have you come in to their office and talk for hours about everything. This will not help you a few years down the line when you can’t remember any of that. Get a written report.

How busy are you? Have you got any holiday coming up?
Hint: You want someone who is popular enough to be comfortably busy but not snowed under. Lawyers may not tell you how busy they really are, so be alert to any sign that the lawyer is overloaded as this means your matter will take a lot longer. If you have a timescale to meet you MUST run it by the lawyer now and ask them honestly if they will be able to meet it (assuming all goes well). If your timescale is anything under 12 weeks then you are being needlessly optimistic. Refer to the Golden Rule below.

Have you dealt with properties in this road/block before?
Hint: Especially when it comes to leasehold property, local knowledge makes all the difference. If I frequently act on sales and purchases in a particular block of flats then I can check the title much more easily (and therefore faster). I may also be able to use the documents from my other files and, most importantly, I already have a report on title written for the particular form of lease used in the block, which means you get it faster.

While talking to them you will be able to form an opinion about the type of person they are, how well they communicate and how much they know about the law and practice of conveyancing. Make sure you like them!

If you must then you can ask how long it will take, but I can tell you now if you like. The answer is: I don’t know and neither does anyone else. However, a normal freehold matter will take around 8-12 weeks. Leaseholds will always take longer (this includes ‘share of freeholds’, which are in fact leaseholds whatever the agent may have told you). It could take much longer than 12 weeks and is very unlikely to take less than 6 weeks. If there is any kind of lease extension or similar then triple this estimate. Yes, I know you’ve heard about completions taking place within a week, but these are very special cases where weeks and weeks of work have been done before the sale was agreed. Trust me, if we could do it in a week, we would be VERY glad to. Do you think we LIKE you chasing us up all the time telling us how you’re going to be homeless on the 5th?

Please remember the Golden Rule: “Never, never, even in fun, make any kind of commitment that depends on the sale/purchase until after exchange.”

The Silver Rule is: “It will often take longer than we said, usually take longer than you thought and always take longer than the agent told you it would.”

My advice would be to avoid online conveyancing services. They all work on the ‘factory’ model and usually offer low quality services delivered through teams of unqualified people.

If you are buying a newbuild property from a large developer then use the solicitor the developer recommends, even if you normally use another firm and they are the best firm in the world. The recommended solicitors have already got a report prepared and your solicitors will not thank you for dumping a one-off newbuild on them.

To sum up, when choosing a solicitor/licensed conveyancer you must select a friendly and professional individual who will be available when you need them, has capacity in their workload to deal with matters promptly, is knowledgeable and competent and has the necessary experience. Most importantly, choose someone you get on with.