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Feature Home reports Continued from page 13 > In competitive situations, people may still pay a premium to secure a property”. Janette Wilson has recent experience of sales “where in a competitive situation with a closing date a price well in excess of the home report valuation has been achieved”; and to Graeme McCormick “It hasn’t made a blind bit of difference. Where there are closing dates or competition, prices achieved are often 5% to 10% over valuation. If there is no competition it just depends on negotiation as it always has.” Relevant also to impact on the market is the complaint by several solicitors that home reports have a depressing effect because, as was predicted, clients don’t want to go to the expense of obtaining a report just to test the market. The delay in being able to market a property also causes frustrations – two to four weeks for some. A cost to absorb Nearly everyone agrees that home reports mean more work (the ESPC finding is 89%, though Hardie is one exception). The sheer length of some reports is astonishing. An Edinburgh solicitor records one of 41 pages – counterproductive, as the clients didn’t want to wade through it all. Carnan has seen one of over 70. “Clients are increasingly turning to their solicitor for interpretation and advice”, he adds. “Standing the time involved to read and digest the content of such reports and then to give advice thereon, I do charge.” In that he is in the minority, as most respondents say the current highly competitive market means they are unable to pass on the cost of the work. For Graeme McCormick the extra is in renegotiating the price when purchasers’ valuations come in at under the home report figure. “We just absorb the cost and the vituperation.” Janette Wilson claims that a web-based system such as the Society’s service provided by Openhouse should reduce the extra work: “you don’t have to assemble all the bits yourself”. Gibson, however, says that by referring the client direct to the surveyor, “the client gets a quicker service and we do not get involved in doing (unbillable) work”. Scope for improvement? What about the main point, then, of providing better information? This, it appears, is bound up with the level of trust in what is offered. In Carnan’s The system in practice John Scott of the Society’s Professional Practice Department reports: “Your feedback so far indicates that some favour the new system, finding home reports an effective marketing tool for sellers and a source of useful information for prospective purchasers. However many remain highly sceptical of the benefits. Several aspects are causing particular concern: Discouragement of potential sellers from entering the market, due to the cost of obtaining the report. Delays in initial marketing of properties, caused by the requirement to obtain the report first. words, “the home report is not meeting this need effectively because of the disconnect between the time of valuation and the time of offer, and because it is perceived as being the seller’s report and, consequently, not to be trusted”. The thrust of other responses is that if clients are being given more information, whether they appreciate it depends on their willingness to accept the home report at face value; and while this applies in many cases, in a considerable though difficult to determine percentage it does not. The question then is whether the level of acceptance will rise or fall due to the external influences at work. What happens next? The Scottish Government’s promised review will take place in three stages. First, a scoping exercise is underway to identify relevant data streams, including quantitative data from Solicitors Property Centres and Registers of Scotland. The Society has pressed for a focus group of solicitor estate agents as a useful source of qualitative data. An interim review will then assess any refinements required to improve the way the reports work – a fine tuning exercise to be based on the first year’s data, and due to complete by next summer (some delay is predicted). The Society failed in a bid to include consideration of removing the compulsion element, or abandonment of the whole scheme; this would only destabilise the market, said the Government. The full evaluation of whether home reports have achieved the Government’s policy objectives will not take place until five years have elapsed. “It remains to be seen how the impact of home reports on the condition of housing will be measured”, says John Scott, secretary Circumvention of the Act, e.g. where selling agents postpone the commissioning of a report until a purchaser is lined up. “Beauty parades”, where a selection of desktop valuations is obtained and the single survey is then ordered from the surveyor providing the highest. Delays in concluding missives, while purchasers’ lenders approve the single survey. Rejection of the single survey by lenders, particularly when provided by a firm of surveyors not on their panel, and insistence on a separate mortgage valuation at the purchaser’s expense – multiple surveys?!. “I raised all these points at both the stakeholders’ meeting and the meeting with DTZ [who are carrying out the initial stage of the Government review]. It is clear that the Government is sensitive to at least some of them. It has been encouraging Trading Standards to take a more proactive approach to enforcement of the legislation, and has contacted CML on the lender issues. “We shall continue to represent your views on home reports to the Government at every available opportunity. In addition we may carry out our own research to gauge their effect.” to the Society’s Conveyancing Committee, who has been heavily involved in the monitoring work. To Graeme McCormick it is “one of the biggest flaws in the scheme” that no national register of home reports has been created: this could have provided a historic condition report on a property, and valuable information on the quality of the housing stock. Indeed, as things stand, one wonders how any change in the level of information available to purchasers, particularly as to whether defects have been revealed that otherwise would only have come to light after purchase, is to be assessed. Scott adds: “The political reality is that home reports will be with us for the foreseeable future, well beyond the Holyrood elections in 2011, unless there is a groundswell of public opinion against them. If you have any clients who are seriously unhappy about the new system I suggest that you ask them to direct their complaint to their local MSP!” What can be said with some confidence, on the feedback reported here, is that theory and practice in relation to home reports are currently some distance apart, and it remains to be seen whether effective measures can be devised to narrow the gap. 14 / theJournal December 09 www.journalonline.co.uk
Registers of Scotland’s biggest ever showcase event will officially launch both ARTL and the upgraded Registers Direct service this month On 15 December, Cabinet Secretary for Finance and Sustainable Growth, John Swinney will officially launch ARTL, Registers of Scotland’s (RoS) online system for the automated registration of title to land, and our upgraded information service, Registers Direct (RD). The launch, the biggest showcase event that RoS has ever hosted, is being held in Edinburgh’s Dynamic Earth, a setting befitting the significance of ARTL and RD to the Scottish economy. Commenting on the event, Kenny Crawford, RoS’s Head of Business Development and Customer Services, said: “It will focus particularly on ARTL and RD. We will be using real examples, filmed case studies and independent research to demonstrate our products. It is also an opportunity to inform you of our future plans and innovations.” RD is, of course, not new. It was first launched back in 2000 when its customer base was dominated by private search companies and the legal profession. Since then, many public and private bodies have signed up as customers, recognising the economic benefits of the information we hold and the ready access to that information that RD can deliver for them. In a recent analysis of RoS’s economic value to the Scottish economy, BiGGAR Economics estimated that using RD helped local authorities collect more than £90 million extra council tax. Without the electronic delivery of the information held on our public registers, such savings would not be possible. We have recently completed the introduction of the new upgraded RD to our customers. The main change is a new architecture that provides a more robust platform delivering greater certainty of service availability. We will continue to work closely with our customers to ensure that the product meets their changing needs. In contrast to RD, ARTL is a relatively new innovation, first introduced in 2007. Since then we have successfully registered over 21,000 paperless transactions on the Land Register. Initially limited to the online registration of standard securities and discharges, last year we introduced functionality to enable the online registration of dispositions and the collection of any associated stamp duty land tax as well as a range of local authority grants and charges. In financial terms, we estimate that the value of standard securities registered using ARTL already totals more than £1.1 billion. We were deliberately cautious in rolling out ARTL to customers, as we wanted to make sure that the system positively supported the business process that takes place in the conveyancer’s office before engaging in a major publicity campaign aimed at both the public and the profession. Since the rollout began, we have made a number of functional and technical enhancements to the system based on the feedback that we receive from users. Customers tell us that ARTL now adds real value to the conveyancing and registration process. There are now over 270 solicitor firms who have the capability to use ARTL and they are supported by 17 lending institutions who have made their standard securities available for use. In these challenging economic times, ARTL provides us all with opportunities for administrative and financial efficiencies, and our website (ros.gov.uk) details these. It also includes testimonials from practitioners. However, ARTL was introduced – ultimately – for the benefit of your client, be that the person buying a house or the lender who is advancing loan funds. Registration fees for ARTL are significantly less than for traditional, paper-based applications and the registration process for ARTL transactions is, in the main, completed on the day the application is processed. Looking forward to the official launch John King, RoS’s Registration Director, said: “If you use ARTL your client will enjoy financial savings, a faster service and greater security. A major part of our future publicity will be aimed at informing the conveyancing public about ARTL. I would urge all conveyancing firms to commit to using the system so that your clients can take advantage of the financial and other savings that ARTL can offer.” Professor Stewart Brymer, the convener of the Law Society’s ARTL Implementation Group comments: “The new upgraded Registers Direct is a welcome addition for conveyancers and the wider public. The real benefits will ARTL UPDATE As at 20 November 2009 Registers Down the slipway Above: Cabinet Secretary for Finance and Sustainable Growth, John Swinney MSP will attend the official launch of ARTL and RD be gained from ARTL however. In ARTL, Scotland has one of the leading automated registration systems in the world. RoS are to be congratulated on their vision to invest in ARTL and it is hoped that a fully electronic conveyancing process will be in place sooner rather than later once e-missives become a reality.” To find out more about ARTL and RD, please contact our eServices team by tel: 0845 607 0160 or email: eservices@ros.gov.uk or go to ros.gov.uk . 21,522 ARTL transactions have taken place. Live on ARTL 277 solicitors’ firms. 17 lenders. 11 local authorities. 29 full sign-up meetings scheduled over the next four weeks. For up-to-date information and a full list of participating practices and companies go to: ros.gov.uk/artl December 09 theJournal / 15
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Page 4 and 5: Consultations Brian Dempsey’s mon
Page 6 and 7: CPD EVENTS Coming soon Please view
Page 8 and 9: People Onthemove ANDERSONS Solicito
Page 10 and 11: Letters Facing up to ABS I wholehea
Page 12 and 13: Feature Home reports One year after
Page 16 and 17: Feature Repossessions The situation
Page 18 and 19: Feature Alcohol The Alcohol etc (Sc
Page 20 and 21: Feature VAT Debra Dougal points out
Page 22 and 23: Professional news Society New websi
Page 24 and 25: Professional news Society The reque
Page 26 and 27: Professional news Society The very
Page 28: Professional news Society Law refor
Page 31 and 32: Braemar Finance Develop your practi
Page 33 and 34: Mercedes-Benz UK Mercedes-Benz is p
Page 35 and 36: Trustis Smartcard Reader Law Societ
Page 37 and 38: no point in connecting with people
Page 39 and 40: privacy settings, it might be possi
Page 41 and 42: Case study 5 Practice E had acted f
Page 43 and 44: this vital element; it was not sugg
Page 45 and 46: Professional briefing Criminal prac
Page 47 and 48: Can rules be devised to protect the
Page 49 and 50: Professional briefing Discipline Tr
Page 51 and 52: Professional briefing Book reviews
Page 53 and 54: Twists and turns Be imaginative; an
Page 55 and 56: dodgy fit that could be a disaster.
Page 57 and 58: some criticism from solicitors and
Page 59 and 60: Sidelines Manus Straw Manus Straw u
Page 61 and 62: From the Journal archives 50 years
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