SRA Raises Transparency Concerns
A review by the Solicitors Regulation Authority (SRA) of how solicitors offer conveyancing services has raised concerns over how open they are about costs and whether they are doing enough to make sure buyers understand any potential contractual obligations.
The SRA has undertaken one of its thematic reviews looking at residential conveyancing and has found a number of areas of concern.
They state that in one third of cases (34%) initial quotations given by solicitors did not include fees for additional work which should have been reasonably anticipated at the outset. Typically, these missing costs related to processing bank transfers, accessing online portals, mortgage administration fees, electronic ID checks or administering gifted deposits.
The SRA have said that not only such practices leave buyers having to pay unexpected costs, there is also concern that some firms may be providing unrealistic initial quotes in order to win business. For example, 37% of firms failed to be transparent about the mark-ups they added to the fee a bank charged for making a telegraphic transfer with some charging as much as 10 times the fee set by the bank.
The review also revealed issues around explanations of long-term implications of complex contractual clauses with nearly a quarter (23%) of solicitors not explaining the difference between freehold and leasehold models of ownership.
Other key findings of the review included:
- All firms visited proactively communicated with clients at key stages and are increasingly using innovative techniques such as text, social media and online portals to do so.
- 91% of firms acknowledged they had received requisitions from HM Land Registry that could have been avoided.
- Nearly two-thirds (63%) of firms are already preparing for the move to HM Land Registry’s planned e-conveyancing platform.