The Conveyancing Association recently released a whitepaper: ‘Modernising the home moving process’, setting out the results of the CA’s research and consultations with stakeholders across the property industry.
Following intense research to reveal the current issues with the home moving the process, the CA has used the whitepaper to propose how to modernise the process and therefore improve it.
It professes, “The ideas set out may appear, in some instances, to be pure blue sky thinking at this moment in time, but we should not lose focus on the fact that 20 years ago no one would have thought that in 2016 routine communication would be via email.”
Observing the issues raised in this whitepaper, When You Move is well aware of the effects that modernising the conveyancing process can have on moving house: more transparency, greater security and better customer service. We are pleased to say that WYM has put some of the CA’s proposed solutions into action, thanks in most part to our innovative technology around our dashboard and app.
We’ve summarised some of the problems highlighted by the CA and their proposed solutions, and what you can do to eliminate the risks posed by the antiquated home moving process.
FRAUD AND MONEY LAUNDERING
The problem…
Fraud and money laundering is clearly a huge concern, with mortgage fraud currently at a five-year high. Homeowners are vulnerable to fraudsters who intercept emails and supply fake bank details, so they transfer money for the property to the thieves, not the conveyancers.
The first issue raised in the whitepaper is “Centralising the identity verification of the parties to reduce the risk of fraud and money laundering”. This is indeed a vital point that needs addressing, and one that needs both digital and human confirmation.
It is no longer uncommon to read press articles about people who have fallen victim to this fraud: The Guardian reported this month on a couple who lost £67,000, and last year The Telegraph published to separate articles on a man who lost £137,000 and a couple who lost £204,000 – all through conveyancing fraud.
It is therefore not an over-exaggeration when the CA says, “Given the threat of fraud to the property industry and the sanctity of the Registers, this process should warrant as much attention as border control.” The document comes full circle with the closing point, “Provide a secure portal for communication to protect conveyancers, estate agents and the home mover from fraud.”
The property industry, and the conveyancing process in particular, needs to digitise, but this needs to go beyond simply using emails to a more secure platform of communication to ensure security for all parties involved. The CA states, “The ever-present threat of cyber fraud and the lack of security offered by current communications systems. By providing a secure portal accessible only to a registered and verified user we can create a safe environment and trusted e-community.”
Proposed solution…
ID verification should be centralised within Land Register’s Verify processes and taking place when the seller puts the house on the market and when the buyer’s offer is accepted.
By identifying the buyer and seller at the beginning of the process, this eliminates risk further down the line. By centralising everything through the Land Registry, it attaches official government documents to the buyers and sellers.
“Land Registry could hold overall responsibility for verifying the identity of the parties, the estate agent could verify the physical relationship between the seller and the property (by meeting the seller at the property) and the conveyancers and brokers would be vigilant for suspicious aspects of the financing and transactional process.”
This takes the onus of estate agents, whose only responsibility here would be to meet the seller at the property to confirm that they do own the property.
Simon Bath, CEO at When You Move, says that When You Move’s use of technology is already eliminating the risk of conveyancing fraud. “We fuse the latest technology with fantastic customer service to ensure we protect our clients’ money during the transaction,” he said.
“The automation of AML (Anti-Money Laundering) checks within our platform is one way we bring the most cutting edge technologies to our clients and introducers for ID verification.” Conveyancing fraud is the most common fraud in the legal industry, but When You Move is aware of the problem and have both the technology and people-based solutions to mitigate it.
For more information on how to protect yourself from property fraud, read our blog: https://www.whenyoumove.com/blog/protect-yourself-from-property-fraud
LOCAL AUTHORITY SEARCHES
The problem…
In the entire process of moving home, Local Authority Searches are by no means the longest or the most costly process, but as they are an initial port of call, the sooner they can be completed, the sooner conveyancers can get on with the rest of the work on the contract.
The report states, “It will be vital to be able to access the search results extremely quickly not just to ensure the advantages are not lost but also to avoid adding upfront cost by requiring the searches to be available at the point of marketing.”
The CA observes that although local authorities can return searches electronically, many do not have the resources to do so and need to invest in an electronic back office system to enable them to digitally capture the relevant data sets.
“Legacy systems created for a different purpose, lack of resource to enhance digitisation and the restrictions to Local authorities’ ability to charge for the service will hamper the ability to improve access,” says the report. Put simply, the Local Authority Search process is antiquated and needs digitising,
Proposed solution…
A body should be appointed to monitor the performance of Local Authorities. The relevant data should be digitised.
The CA recommends “appointing a body with the formal monitoring of Local Land Charges performance.” This body will review those who fall behind on the delivery of their searches and “establish whether additional resource is required to get them to the standards required and to reduce the postcode lottery of search and turnaround times.”
Digitisation of Local Authority Data would help solve the problem. In Scotland, this appears to have solved the issue, enabling conveyancers to obtain search results within 24 hours and at set fees around £60. The CA proposes an alternative would be “to consider the implementation of more relevant searches, for example, by creating a search which would only provide data relevant to the security of the lender.”
Simon Bath ensured that When You Move’s search partner was aligned with his own progressive policy to ensure that Local Authority Searches were not a sticking point in the conveyancing process. The searches can be integrated into When You Move’s platform to eliminate the possibility of delays and human error.
“We performed a comprehensive review of search partners in the industry as we requited the search partner that we work with to be forward thinking from a tech perspective.
“We have an API integration with our chosen partner which allows conveyancing staff to be made aware in real time of expected completion dates and then pass down this information to other parties interested in the transaction. That way we can be transparent on when we expect to deliver.”
TRANSPARENCY AND CERTAINTY
The problem…
Lack of communication and transparency is often cited as a point of frustration in the home moving process. It’s a process that can be drawn out and have lots and back and forth, due in part to the antiquated process of completing papers by hand.
“Estate agents report that contract papers routinely take 14 days to issue from the point of the notification of sale,” states the whitepaper.
Forms are currently printed, completed by hand and posted, which, as the whitepaper highlights, “inevitably impacts the transaction timescale.” Very few law firms are currently able to offer this service in a digital format.
“One of the other key areas of stress and additional cost to the consumer is on the day of Completion,” reports the whitepaper. So often, buyers fall at the final hurdle because money has not been transferred int time, despite the usual recommendation that five working days is allowed to give time for the funds to be drawn down from the conveyancer’s account.
“On occasion, monies get delayed in the system between conveyancers, meaning that a buyer at the end of a chain might not receive the keys to their new property until late in the day, particularly with the advent of the extended CHAPS hours.”
Proposed solution…
All communications should be via a secure portal. Completion monies should be transferred on the day before completion.
“By providing information upfront at the point that a property goes on the market, the time taken to issue a contract pack can be reduced to less than 48 hours,” proposes the CA.
“If buyers were required to have finance in place prior to offer, then we could routinely see exchange of contracts within five working days of acceptance of offer. To compel this, buyer and sellers could be required to enter into a contractual liability at the point of acceptance of offer using an agreed industry standard reservation agreement with a financial deposit held by the buyer’s conveyancer in escrow.”
By having a digital paper trail of all communications, it is easy to keep track of all documents and transactions, and equally, looking forward, enables parties to project completion times. Often estate agents are nagged by the seller to get in touch with the seller to hurry them along if the process is not moving as swiftly as hoped. But by using a secure portal, there would be no need for estate agents to do any chasing. At worse, estate agents would digitally give buyers a ‘poke’ if they had not completed paperwork on time.
Part of When You Move’s mandate has always been to provide a stress-free, transparent service, hence the development of a suite of technology solutions that offer transparency and clarity at every stage of the process.
“While we can’t change an entire industry, our technology allows everyone in the transaction to understand the current status and potential blockers of the transaction,” says Simon Bath.
Communication is vitally important when buying or selling a house, but by fusing cutting edge technology and customer service, When You Move continually informs the clients and the introducer of the milestone updates and a constantly updated “Headline” of case.
CONCLUSION
Something that is apparent throughout this document is that many of the solutions to current problems in the home moving process could be solved using a “secure portal” and/or a “digital platform.”
The whitepaper states that “Currently there are varying degrees of electronic conveyancing, the majority of ‘electronic’ conveyancing is simply the use of email… However, this movement towards emailed contracts may well reduce as the ever-increasing risk of viruses such as the crypto-locker virus pose a significant cyber risk when dealing with emails and their attachments. At When You Move, our dashboard and app is already solving these solutions internally, eliminating human error, time delays and protecting costumers from the threat of fraud.
Estate agents need to know that once they have set up the sale of a property that the legal process is safe and organised. Safe in the sense that customers are not at threat from conveyancing or mortgage fraud and organised by addressing potential issues that could go wrong from the outset. This means that conveyancers are in a better position to solve or prevent these from arising. The process should be kept transparent from that point on, allowing an open channel of communication between all parties: something else that can be aided by a digital platform, like the one When You Move has designed, built and implemented.
Embracing technology and organising the process by identifying possible sticking points early on in the process will help to modernise the home moving process and bring conveyancing into the 21st Century.