In this article we examine some of the common conveyancing errors made by solicitors and licensed conveyancers when undertaking residential property transactions.
If you would like to know more about some of the common conveyancing errors that can occur in relation to commercial property transactions, these are covered in a separate article that can be accessed here.
Historically, conveyancing errors have given rise to more claims against solicitors than any other area of legal practice. There are undoubtedly a variety of reasons for this. However, one significant reason is that while the residential conveyancing process is relatively formulaic, it nevertheless addresses a wide range of legal issues and attendant pitfalls.
Consequently, there are, unfortunately, a myriad of mistakes that can occur during the course of a residential conveyancing transaction. Here, however, we focus on those that we have seen arise with some frequency and for which we can offer reported examples.
Failing to make pre-exchange searches
A number of searches are undertaken by the purchaser before sale contracts are exchanged with the vendor. While some of these searches (such as a local land charges search and local authority search) should be undertaken as a matter of course, others (such as flood searches or coal mining searches for example) are discretionary and a matter of professional judgement.
In some transactions, the appropriate searches and enquiries are overlooked. This was the case in Peter & Julia Cottingham v Attey Bower & Jones. Here the claimants instructed the defendant firm of solicitors on the purchase of a house that had been extended and extensively renovated by the vendors. However, prior to the purchase, the claimants’ solicitors had failed to undertake independent searches to confirm that building regulation approval had been obtained for these from the local authority. This omission was later found to be negligent by the court and the claimants’ solicitors were ordered to pay damages to compensate them for the additional professional and building regulation fees they had to incur.
Failing to advise on ground rents for leasehold property
Over the last year considerable concern has been raised over the practice by some residential developers of selling new build properties as leaseholds, with onerous ground rent provisions. Many of the purchasers affected have complained that they were never advised of the ground rent provisions or their significance and that, in some cases, their properties are now unsaleable.
As a consequence, a large number of claims have already been made against solicitors, with many more expected to follow. For further information about this issue, please see our article Leasehold Ground Rent Scandal – Your Key Questions Answers. This can be accessed here.
Failing to ascertain rights of access
While the ability to gain lawful access to any property or land is clearly essential, the right to do so is not always a given. This can be so even where access has occurred previously. With the significant rise in infill development, where a right of way over either a vendor’s retained land or a neighbour’s land is frequently required, issues over access have become increasingly common.
The issue of access arose in the case of Malcolm Tucker & others v MB Allen & Co. Here the claimants instructed the defendant firm of solicitors to act for them on the purchase of a cottage and nearby paddock, the latter for grazing horses. Although the previous owners had advised that they had gained access to the paddock via a public footpath, it later transpired that no public or private right of way existed. In subsequent proceedings for professional negligence against the solicitors, the court held that in failing to advise the claimants of the true access position, the solicitors had acted in breach of their retainer and negligently.
Failing to advise on restrictive covenants
Restrictive covenants over residential property are extremely common. They serve to restrict the use or enjoyment of the land to which they attach and may be enforceable by future property owners. The nature of the restrictions can vary enormously and a precise reading of them is imperative. Where such covenants restrain the very usage for which a property had been purchased, the results can be devastating.
In the relatively recent case of Helen Joyce v Darby & Darby, the claimant had instructed the defendant firm of solicitors to act for her on the purchase of a large residential property. This she intended to divide into two dwellings and improve through the addition of a pool, balcony extension and terracing. However, after works had commenced, the claimant was advised by solicitors acting for her neighbour that restrictive covenants prevented her from using the property other than as a single private dwelling, or altering its external appearance without written consent. An injunction was subsequently obtained against the claimant and the property was eventually repossessed.
In a claim against the defendant solicitors, the court held that they had indeed been negligent in failing to advise clearly on the alterations covenant, its enforceability and the vulnerability of the claimant’s position. It also awarded damages against the solicitors for both the wasted costs the claimant had expended on building works and any diminution in the value of the property when purchased.
Failing to avoid delay
Delay in conveyancing transactions is not uncommon and can give rise to considerable frustration and inconvenience for those involved. While it is not on every such occasion that the delay is caused by the actions or inactions of the solicitor, or that it gives rise to actionable loss, this certainly does happen.
In Stovold v Barlows (A Firm) the claimant was most anxious to sell his house, having already purchased another with a bridging loan. After agreeing a sale price with an intended purchaser, he instructed the defendant firm of solicitors to undertake the conveyance. However, in doing so, the defendant sent urgent conveyancing documents to the wrong address, causing their receipt to be delayed. In the meantime, the intended purchaser resolved to buy another property. While the claimant was eventually able to sell his house, the price he attained for it was substantially less than that which he had agreed with the original purchaser.
Both at first instance and on appeal, the court held that in a matter as important as this, where it was vital that the conveyancing documents were received as soon as possible, risks should not have been taken or assumptions made on such a fundamental issue as the proper address of the recipient. In turn, damages were awarded against the defendant solicitors for the claimant’s lost chance of securing a higher sale price.
How we can assist
As professional negligence specialists, we act for clients nationwide to resolve claims against a wide range of professionals, including solicitors and licensed conveyancers.
If you think that you may have suffered a financial loss as a result of a conveyancing error, and if you would like to explore the possibility of pursuing a claim for compensation, please contact us on 0800 195 4983 or at firstname.lastname@example.org
Please also contact us if you are intending to buy or sell a property and would like the details of an experienced solicitor, who specialises in residential conveyancing. We would be happy to provide these to you.