Conveyancing is the legal process of transferring ownership of a property from one party to another. This includes a lot of legal checks that need to be accurate for it to run smoothly, as if these checks fall short of what’s expected, it can lead to things going wrong with the process. When a conveyor fails to meet their duty of care, they are committing professional negligence due to the potential financial losses it can cause clients.
Errors can come from several avenues, such as inadequate property searches or mismanagement of leasehold details. The mistakes that happen during the conveyancing represent a serious breach of professional responsibility, which makes the chances of negligence claims very high. Clients who have experienced financial harm from real estate dealing can claim against conveyors if they were in the wrong.
Here are the most common and damaging errors made in conveyancing that frequently lead to negligence claims.
What is Conveyancing Negligence?
Conveyancing negligence occurs when a solicitor handling a property transaction fails to exercise the standard of reasonable care and skill expected of a professional in their field, resulting in financial loss or harm to their client. This breach of duty involves specific errors or omissions that have negative consequences, such as failing to conduct essential property searches, missing critical deadlines or making errors in legal documentation.
How Conveyancing Negligence Claims Occur
Failure to Conduct Adequate Searches
Good conveyancing practice rests on thorough due diligence executed via comprehensive property searches. Negligence often arises when a conveyancer fails to commission essential searches or critically overlooks important findings within the results. For example, a solicitor might fail to check local authority searches for proposed road schemes, railway extensions or major developments nearby. If undisclosed, these projects could negatively impact the property’s future market value.
Critical information related to the physical integrity and future viability of the property is often missed. A conveyancer might fail to check water and drainage searches, leaving a buyer unaware that a main sewer line runs directly beneath an existing extension or planned development area. Negligence also occurs when a solicitor fails to advise clients on potential environmental risks, such as flood hazards, contamination or historical subsidence issues highlighted in specific environmental or mining searches. This exposes the buyer to unexpected and costly liabilities.
Mismanaging Leasehold Property
Leasehold properties can complex conveyancing, as they involve a landlord known as the freeholder and a detailed set of contractual obligations for the homeowner. This structure creates numerous potential pitfalls for you to need professional negligence solicitors. A major area for claims revolves around a conveyancer’s failure to properly advise on escalating ground rent. For example, if the rent is set to double every ten or twenty five years, the property can rapidly become unaffordable and virtually impossible to sell.
Negligence often surfaces in the conveyancer’s handling of financial charges and lease length. This includes providing missing or incorrect advice regarding service charges. They may fail to clearly detail the current and potential future costs for property management or neglect to obtain up-to-date accounts for the service charge fund. If the conveyancer fails to alert the client to a short lease term, particularly one falling below eighty years, they deny the client the statutory right to extend the lease in a timely manner, which damages the property’s market value.
Misunderstanding Restrictive Covenants
A conveyancer’s oversight regarding restrictive covenants is a frequent cause of negligence claims. These covenants are legally binding rules stipulated in the property deeds that actively limit how the property owner can use or modify their land. A failure to properly research these clauses and clearly advise the buyer on their implications constitutes a serious error. For instance, a buyer might be left unaware that they are explicitly prohibited from carrying out renovations, such as building an extension or operating a home-based business.
Negligence related to boundary and access issues can prove hugely detrimental. Conveyancers must correctly identify and explain easements, which are rights allowing another party to use a portion of the land for a specific purpose. If the documentation regarding this access is incorrect, the buyer may take ownership only to find they cannot legally access their property or are subject to unforeseen usage restrictions. This can lead to a professional negligence claim that is successful.
Financial and Mortgage Errors
These types of errors frequently cause financial loss for the client. The incorrect transfer of funds where the conveyancer transfers a large sum to the wrong bank account would be considered negligence. This often occurs due to inadequate verification of the recipient’s details and is sometimes linked to sophisticated fraud, such as phishing attacks specifically targeting the law firm. This mistake can result in the entire loss of the funds intended for the property purchase.
The conveyancer may fail to correctly register the mortgage charge with the Land Registry, leaving the lender unsecured and causing massive complications for the buyer when they later attempt to sell or remortgage the property. Another common financial mishap is miscalculating the Stamp Duty Land Tax or SDLT liability. This can result in the client being penalised by HMRC with substantial interest charges and fines after the transaction is complete.
Issues with Title and Ownership
The most non-negotiable duty of any conveyancer is ensuring the client receives a good and marketable title to the property being purchased. Negligence occurs when a solicitor ignores or fails to advise the client on complex stuff within the property title documents. This can severely impact the client’s ability to sell, mortgage or insure the property in the future, often resulting in expensive remedial legal work years later.
A negligent conveyancer might complete the purchase without properly confirming that all previous occupants have been legally and physically removed from the premises. If the buyer takes possession only to find occupants who refuse to leave, the conveyancer’s oversight results in immediate legal chaos for the new homeowner. This increases the chances of a successful professional negligence claim.
Final Thoughts
Successful property transactions rely heavily on the conveyancer having good attention to detail and adherence to professional standards. When these numerous checks are compromised, the resultant negligence exposes clients to substantial financial losses and protracted disputes. Therefore, understanding the potential for these professional oversights is crucial for consumers seeking appropriate legal redress and compensation when their investment is jeopardised.
Solicitors like those at Been Let Down can here to help you determine if you can claim damages successfully. If the other side is prepared to agree to a settlement of your claim, then it’s important to negotiate a good outcome. If however, they deny the claim, we would advise you of the next steps which would likely include commencing court proceedings.