Lenders make conveyancing lawyers make life very difficult

Here is a question for you Conveyancing Solicitors out there:

Do you remember conveyancing before the introduction of the CML Lenders Handbook? 

For many, simply reading that question will send a shiver down their back.  Prior to the introduction of the Lenders’ Handbook each lender would have its own detailed instruction manual with mortgage offers that were often complex with specific conditions of particular relevance to the conveyancer.  If a lender wanted to change the legal requirements for the conveyancer then they would simply reprint their conditions.

In 1999 the CML Handbook was introduced after consultation with the Law Society and now applies to almost all domestic mortgages where the lender and borrower are represented by the same conveyancer.  This was a dramatic change and made the life of the conveyancer a lot easier.  In the first few years it appeared that when lenders wanted to make a change they would do so primarily through changes in part 1 with significant and important changes predominantly during the early years, following feedback from the conveyancing industry.

It now looks though as we have come full circle.  There have been no part 1 changes at all in the last two years and yet in the last 6 months there have been  over 500 changes with no notification to the conveyancing industry.

Increasingly, it appears that lenders are updating their part 2 requirements to alter their legal requirements.  As if to compound problems for conveyancers, the uplift in frequency of changes is  occurring at a time when there is a greater chance of being sued by lenders for non-compliance with lender requirements.  Just this week,  the Gazette has estimated that 500 law firms are about to join the Assigned Risk Pool.  The Telegraph has also reported that “claims against solicitors have risen during the recession”.

The Law Society have recently published their consultancy paper on the future of residential conveyancing.  In it they state that “solicitors have the challenge of dealing with a number of changes and compliance issues resulting from lenders’ instructions”.  Unfortunately, whether or not it be the Council of Licensed Conveyancers or the Law Society, the regulators are unlikely to have either the political power or the appetite to compel the CML to standardise lender requirements or at the very least better communicate the changes as they occur.