Communication, Conveyancing and the Property Sector

Published by GlobalX

Tuesday Dec 10 2019 Industry Experts

Communication between key stakeholders is a fundamental facet of the home buying and selling process. Unfortunately, public perception suggests the property market is fragmented and self-preserving rather than working to improve the speed, efficiency and experience for all concerned.

Getting communication right from the start - Planning and Development

The early stages of the construction process have long been fraught with friction between developers and local authorities often as a result of miscommunication.

According to recent data, compiled by the Royal Town Planning Institute (RTPI), investment in local authority planning departments, in real terms, has fallen by 42% since 2010.

Conversely, the Government has also set strict targets of creating 300,000 new homes per year by 2025, putting enormous pressure on planning departments to process planning requests in a stretched and strained work environment.

In recent years, this has led to planning delays and frustration between the developer, local authorities and the communities living in limbo.

Only 7% of the public trust local authorities to make decisions in the best interests of the local community with fewer still (2%) putting their faith in developers, according to a survey completed by development specialists, Grosvenor.

Public perceptions of these key stakeholders have been tarnished in recent years with three-quarters of respondents viewing developers as motivated solely by money. Half of those polled held a similar sentiment about local authorities.

With over half (54%) concerned that developers and councils fail to understand the needs of the community and local area before construction begins, the majority were demanding more significant levels of community engagement, stakeholder accountability and development transparency.

Overwhelmingly, the public was in favour of building development starts in their local area, but a higher level of information was requested. This issue has permeated through public dissatisfaction for many years with more people confused as to how developer contributions are spent within the local community.

In September, the Government passed legislation requiring councils to publish information on developer contributions, including how much each authority receives from Section 106 agreements, viability assessments and community infrastructure levies (CIL).

The transparency should enable the local community to view how much a local authority receives as well as what the money is spent on.

However, research by the National Federation of Builders (NFB) found swathes of City of London developer contributions unaccounted for and unspent.

Between April 2016 and 2019, the City of London received £237 million in Section 106 contributions. Whilst this money was designed to improve local infrastructure, only £148 million was spent on local community investment. The remainder was placed into a surplus fund accruing £6 million in interest.

Similarly, £30 million was paid by developers in CIL with only £1.4 million being spent on local infrastructure improvements. As local authorities become more transparent, public trust will only improve if local authorities offer accurate and transparent information on how the contributions will enhance the local community.

Trust and Communication in the Home Buying and Selling Process

It is almost a year since the Solicitors Regulation Authority (SRA) enforced regulations requiring firms to publish their price and service offerings to clients transparently.

A recent inspection of 51 firms regulated by the Council for Licensed Conveyancers (CLC) found less than a third (15 firms) fully compliant with regulations. The majority of issues involved price and service transparency infringements, anti-money laundering failures and accounts rules issues.

Similarly, only a quarter of SRA regulated firms are fully compliant with the regulatory changes to price.

Of the survey sample of 500 law firms, 59% were only partially compliant, and almost a fifth (17%) were not compliant at all.

Unfortunately, poor communication in the sector is not limited exclusively to law firms’ digital presence. Over a third of disabled consumers refused to access legal services over the past four years because of perceived barriers to entry.

31% of the 3,500 survey size thought accessing legal services was overly complex, almost a quarter (24%) found staff to be inexperienced in communicating effectively with disabled people, 18% found communication to be unclear with legal language presenting a barrier and restricted information formats limiting consumer choice.

Law firms have now been tasked with improving staff training and producing a range of communication outlets including braille, large font and audio.

Conveyancers’ communication with clients was also criticised prior to the recent changes to leasehold with almost a quarter of firms failing to explain the differences between leasehold and freehold ownership types, resulting in many homeowners feeling as though they were mis-sold their property.

Currently, freehold owners are facing similar communication issues as developers increasingly place restrictive covenants and onerous rent charges into their freehold contracts. As of October 2019, 29,968 rent charges have already been registered with many more set to follow as developers look to find alternative revenue streams to replace leasehold.

The news has been full of freehold homeowners disheartened that their van is not legally permitted to reside on their drive or annual rent charges are applied for highway and shared space maintenance despite paying thousands in council tax.

It is clear that if communication is to improve, all stakeholders need to offer greater transparency in the information they provide. Failing to address these issues will result in increased levels of distrust and consumer confidence.

What can conveyancers do to improve communication?

There's an old adage that when it comes to work, you have it cheap and fast, but it won't be good. You can have it fast and good, but it won't be cheap. You can even have it good and cheap, but it won't be fast. What you can't have is good, cheap and fast.

Unfortunately, the property market is consistently asking for all three, and it's not impacting the price the clients pay, but the margin conveyancers make.

There has also been a big shift in clients expectations. Their experiences outside of the legal sector are setting their expectations as to how they perceive conveyancing transactions should work. The insurance and finance industries have adapted quickly, allowing easy communication via chatbots, mobile apps, SMS and regular email alerts. Conveyancers, however, have been slower to adopt new technologies to resolve some common pain points.

From client portals to chatbots, to conveyancing workflow automation, there is a raft of technologies that can help speed up the process and keep clients informed throughout. These tools can also help reduce the amount of administrative conveyancer have to do freeing up time to have more meaningful conversations with clients. Technology can't solve everything, though. If the client experience isn't is considered as part of the workflow from the outset, then no tool can help improve transparency and communication.

It boils down to why do we do what we do? Why do we order property searches and make enquiries? Clients often see these as just administrative actions required by law and not actually done to protect them from making poor purchases. Explaining up front what the role of a conveyancer is to the client and that's not to make mortgage companies happy, will ease any friction when there are delays due to doing your job.

As a leading provider of conveyancing searches in England and Wales, GlobalX can help provide transparent, clear, efficient and trusted search information. For drainage and water searches, environmental searches, land registry searches, mining searches, miscellaneous searches and flood reports, our thorough and fast service will ensure the home buying and selling process is fully informed whilst avoiding harmful delays.

Contact us to find out more about our unrivalled services.