Government decides not to act over leasehold concerns

Laura Mather

The Government has decided not to take further action, despite the findings of the Housing, Communities and Local Government Select Committee Report that the close relationship between conveyancers and developers creates a conflict of interest.

The report has suggested that a client’s interests may be neglected if they are pushed into instructing conveyancers who have been recommend by developers and who may not put the client’s interests above those of the developer in the hope of gaining repeat business.

The report suggested a ban on financial incentives being offered to convince a buyer to instruct a particular conveyancer that the developer has recommended.

Despite agreeing that clients should obtain independent legal advice, the Government was reluctant to take further action until further research is undertaken.

Those purchasing leasehold property have increasingly removed estate agents from the process with developers simply selling direct to the buyer and over half of those buyers, using a conveyancer recommended by the developer.

Matthew Howe, trainee solicitor dealing with property at Samuels Solicitors LLP says: "There is a real concern about buyers caught in the trap of using conveyancers recommended by developers, particularly where leasehold property is involved. Leaseholds can be very complex and any buyer should receive expert legal advice. There are clear concerns under the current regime about whether the buyer has received truly independent advice at any stage of the transaction." 

The Solicitors Regulation Authority code of conduct is clear on a solicitor’s duty to act in the best interest of their client and avoid any conflict of interest. The Government has taken the decision that although it recognises the need to uphold the code of conduct it is not prepared to take action until it receives further evidence.

If you are buying a property, it is vital that you obtain independent legal advice. Contact us to speak to one of our expert conveyancers, to find out how we can help.