What can conveyancers learn from the Grenfell Tower tragedy?


The inquiry into the cause of  the tragic Grenfell Tower fire will almost certainty focus on the role of the Freeholder and Management Company and investigate any failings on their part.  

In the meantime  what steps as conveyancers can we take to ensure  clients are well informed of the risk of fire when purchasing a flat in a high raise building.




To begin with, we should all be asking to see the risk assessment and checking when this was last updated as well as checking that any recommendations have been followed. 

The Regulatory Reform (Fire Safety) Order 2005 became law in October 2006 and introduced significant change to workplace fire safety responsibilities. It also  simplified the legislative regime by bringing all fire safety legislation together into one Order. Essentially it introduced the need for employers, building owners and occupiers as 'responsible persons' to carry out, implement and maintain a fire safety risk assessment. That is someone who has been trained to do so!

A 5-step fire safety risk assessment checklist is available to help 'responsible persons' carry out and implement a risk assessment in their premises.

All non-domestic premises including the common or shared parts of blocks of flats or houses in multiple occupation are covered by the Order, and may be inspected by their local Fire and Rescue Authority. Under the Order, Fire and Rescue Authorities have a statutory duty to ensure compliance and enforce the requirements where necessary.

As well as the check-list setting out what is required within an adequate risk assessment, an on-line form is available to help check the extent to which the assessment will comply with legislation.Fire risk assessment guidance: 

If the seller is not able to supply it the seller should be asked to obtain an assurance from the Freeholder/Management Company one will be sought and made available within a reasonable period of time.  

Health and Safety  legislation has the allowance of 'reasonable steps' being taken to comply. If there is a plan in place to assess at some stage in the future  this may help to avoid immediate enforcement action and it might therefore be wise to ask the seller to provide confirmation from the Freeholder/Management Company that there is at least a plan in place to undertake the assessment.

If the client is to acquire an interest in the Freehold/Management company then there is a need to warn the client of the risk of enforcement for so long as it takes to supply the assessment.  

What other steps can be taken?

The following additional enquiries should also be considered. 

Is there a sprinkler or other fire suppression system installed? More than a million people are living in council owned tower blocks with no sprinkler systems. In all newly constructed blocks taller than 30m sprinklers need to be installed, though surprisingly not in common areas. 

Has the building undergone refurbishment and if so was the fire risk assessment updated?

Is the property cladded and if so does the cladding contain a plastic or mineral core?  It is understood cladding with a plastic core was used in the West London tower.  Has the cladding been sent to the Government test laboratory and if so what was the result of the testing? 

Does the building have fire doors fitted throughout? 

Has the relevant Fire Service visited and inspected the building and when did the last inspection take place? 

Our job as lawyers is make sure we can obtain the right type of information to enable our clients to make informed decisions before they commit to make a property their home.  The risk of fire and fire mitigation measures will clearly in the light of this tragedy be in the forefront of all of our minds. 


MJP Conveyancing are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877067 or via email at david@mjpconveyancing.com

Builders and neighbours - the hurdles of extending your home


More and more of us are thinking about extending and making modifications to our homes.   Its cheap to borrow money and relatively straight forward to secure planning permission or build within permitted development parameters.  My experience having recently gone through the process is that local authorities are far less relaxed about planning projects  than they were at one time, and obtaining consent has become more of a formality these days.   

You still require building regulation approval, even if you are constructing whiten permitted development rights.   Again, with a good detailed plan this has become far simpler to procure.  

So once consents are in place you may think the headaches are over.   Well I am afraid not. The first problem we faced was finding a reputable builder who was interested enough to quote for what was viewed as a ‘small’ job, even though it involved the creation of 200 square meters of new space. Four or five years ago builders were scrambling around for work and quoting for anything that came their way.  There was a shortage of work due to the financial recession, property development was slow and there was hardly any demand for building services.   How this has all changed.    A good builder is now very hard to track down.   Most builders have jobs on their books for the next 18-24 months and those who are able to fit the work in will almost inevitably  take longer to undertake the work due the shortage of electrical, plumbing and plastering  contractors.  The net effect of this is that it is going to take longer not only to find and vet a builder but to also complete the project. 

If you have never used a builder before or do not have access to reliable recommendations the task of souring a reliable contractor is not easy.  I know from my experience that working with a contractor on a three month project involves the same tolerances and flexibility which feature in any successful relationship. Its like a marriage and you really do need to get on with your builder to ensure the build goes according to plan.  If you are constantly falling out with each other, the scope for heated conflict and perhaps disaster will be increased.  

Keep in mind also that if the builder likes you and the relationship is good the builder will inevitably make sure the finished product is one that you will be pleased with.  Indeed you need a builder who understands the brief and will act as an advisor with all of those many decisions you will be required to take during the build. 

Before selecting a builder, do talk to the builders past customers, read reviews and go and have a look at some of the builder’s previous work.  Also check out the financial position of the builder if you can.  If the builder is a limited company you will be able to access their accounts online. Also most importantly make sure you have a contract drawn up to detail the work to be undertaken and the intervals for payment.  Never pay you builder any money upfront.  Make sure you pay for stages of work as and when they complete.  

I also recommend the engagement of a  project manger to be on site regularly to make sure the build is happening according to plan and to be available to make decisions on the timing of delivery of materials and the organisation of the various trades. 

This brings me on to another area of risk and that is your relationship with your neighbours. Never assume as I did much to my cost that the relationship with your  neighbour is made in heaven and will continue forever.  Like any relationship your long standing relationship with your neighbour can break down.  Forget all of the BBQ, dinner parties and other happy moments which you have ver the years shared with your neighbours, since when it comes to building works, people can change and change quite dramatically.   

If you need access to enable some of your works to be carried out then you will need the consent of your neighbour.  You also need the consent of your neighbour to carry out work to a party wall.   My advice is that how ever well you think you know your neighbours always make sure that you establish a Party Wall Agreement with your neighbour before you commence work.  This should avoid issues over access and arguments around potential damage to your neighbours property caused by the building works. Don’t fall into the trap of relying on the good faith of your neighbour. 

Problems may arise and if they do the best advice is to try and sort these with your neighbours direct. If this is not possible then you may need to resort to the engagement of  a specialist surveyor who may be able to mediate or a solicitor who can consider access rights under the Party Wall Act 1996 and or Access to Neighbouring Land Act 1992.

You have to live with your neighbours and falling out with them should be viewed as a last resort.  However do not let an awkward neighbour who has no reason to make your life difficult stand in your way.  You have a right to extend and carry out building works to your property providing you have all of the necessary consents and  you should be entitled to exercise that right without unreasonable interference or obstruction. 

MJP Conveyancing are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877067 or via email at david@mjpconveyancing.com

Award nomination for national technology driven conveyancing service


Following hot on the heels of their nomination for the ESTAS Conveyancer of the Year awards, MJP Conveyancing is delighted to have been shortlisted for the Modern Law Conveyancing Awards in two categories: the “Client Care Award” and “Conveyancing Firm of the Year – Midlands.”


The nominations are testament to the outstanding efforts of all our staff this year and demonstrate the dedicated focus we place upon delivering the highest levels of care and support for our clients during the house-moving process. 

Fighting off fierce competition from some very reputable firms, the nominations are also indicative of MJP’s growing reputation, both locally and nationally, for delivering a technology driven, transparent, efficient yet affordable online and client focused conveyancing service

David Pett, Director, commenting on this development, explains why he considers MJP  is deserving of this well overdue nomination:

"Starting from a standing start in 2011 we have aways looked to punch very much above our weight.   We have built up a massive following of loyal clients and using ground breaking technology our position in the market continues to grow.  We are proud of the fact that we offer our clients technology which provides regular updates and involves the client in every stage of the the process.  I believe we are the only national conveyancing service which offers clients a free online property log book and it is clear that this and other technological features within our unique online case and risk management platform, places MJP as one of the leading conveyancing services in the country'.  


The awards ceremony is being held on the 13th July in Liverpool and we will be keeping our fingers crossed that MJP bring home the trophies! 

MJP Conveyancing are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877067 or via email at david@mjpconveyancing.com

Recruitment - The ‘I Generation’ ticking bomb

Much is made of the ‘I generation’ and of how the future of recruitment and career progression is set for a major change.  

I am not convinced that this general concern is any different from the observations made by my parents when I first entered the job market, though in recent years I have started to form the view that this evolutionary juncture may prove to be more defining than those previously witnessed.

So where do I start in the evaluation? And how do I express myself in a way which does not make me sound like my father.   A difficult one, and probably in truth it may be best to reflect on the landscape which existed when I took my first steps towards qualifying as a solicitor. 

Life back then (yes that well used cliché) was, it is fair to say, different.  There was less competition and more importantly less pressure on those looking to pursue a career in the law to leave school and immediately head off to university.   Unlike today, there was no set route mapped out with an inbuilt expectation to pursue it.  Instead, taking a lead from my father who had to take on three jobs to make ends meet and to provide for his family, I was left with no illusion that to succeed in life there was only one option - the need to work and to work hard. 

My performance at school was not spectacular, although I did attend a further education establishment and attained a diploma in business studies.   Finding a job was not easy and I attended endless interviews.  I was eventually offered a job as a clerk in a firm of solicitors on a salary which compared to salary structures these days would have clearly fell well below the minimum wage.

Money was not however important – it was a job and one which I hoped would provide me with an opportunity to gain experience.  I knew that to do well I needed to prove that I was worth investing in and I can recall getting in early, staying late and also working at the weekends. This was not by any means unusual.

It wasn’t the most glamorous of jobs.  It was however a job and I was grateful to my then employer for taking me on.   I knew then as I did when moving from that first employer to my next that I needed to work hard, I needed to impress and that nothing would come my way unless I put in the hours and showed an appetite to succeed.

It was evident that no one owed me anything and that to progress in life I needed to make my own way.  

By going that extra mile it was evident that doors would eventually open and opportunities would arise.  It was all within my own control.  So what has changed?

Employing and working with young people and indeed having children of my own it is clear that there has been a major shift in attitude and expectation.  This I believe is fuelled by increased peer pressure which has become far more transparent due to social media as well as repeated failings of government with the formation of education policy.

In reporting on this I am generalising, as I know there still exist self-motivated individuals who exhibit that fast becoming rare attribute of a work ethic.   In the main however I am coming across more and more of the ‘I Generation’ who have become programmed to expect not only a right to a job but to be paid a totally unrealistic starting salary.

I say ‘programmed’ as I do believe that most young people have convinced themselves that to be able to achieve success there is a particular path to follow and once completed a job and a high salary will automatically follow.  

The situation has not been helped by previous Governments creating more and more university places and reducing the past reliance on apprenticeships and other schemes which provide an alternative option to university.   I know this is changing but it has in my view come far too late in the day to have any positive impact in the current employment market.

A large number of those looking for work and those who have been lucky enough to secure their first job seem to have an unreasonable expectation, commonly centering on working hours and remuneration.  I remain amazed that having worked hard at school and university I still come across a complete lack of commitment and drive.  I tell all of my staff that I am not interested in a ‘9 to 5’ mentality and that I expect them all to put in the ‘extra effort’.  I say I need to be impressed and that the more effort and I see the more I will wish to reward accordingly. 

It is not unusual to find within workplaces that some young people are only minded to do ‘extra’ hours if they get paid overtime.  Others claim that simply because they have a degree they should be paid more. Constant moaning about what they don’t have as opposed to what they do have is not an unusual feature of most work places.  The difficulty is that due to how they have been programmed and with the unrealistic expectation set by prolonged exposure to social media and the like, a vast number of the ‘first time’ employees do not see anything wrong with this approach.  

Some may call this confidence, whilst others see it as arrogance and a misplaced perception of their value.  Interestingly my wife made an observation on this when we were recently watching an episode of the BBC’s Voice.  As part of the contest those chosen to go through to the ‘next round’ are asked to perform a song which is chosen by the coach.  It was noticeable that when the younger contestants were told of the coach’s song choice, rather than being guided by the professional and being grateful for the ‘break’ almost all of them pushed back and challenged the song choice.

The feedback I hear is some young people lack motivation because financial necessity is such many of them are taking on jobs which are outside their first career choice.  I do get this, but surely if you choose to take a job you should do all you can to make the most of the opportunity and to use it as a solid building block for future opportunities.

So where will all this lead?

The risk as I see it is that without an attachment and with unreasonable expectations employers will begin to see less productivity and a dwindling return in the investment made in training.  Indeed it is for this very reason I have recently changed my view on training contracts.  With a contracting employment market in conveyancing I took the view when establishing the business that I would look to ‘grow my own’ and to look for training contract candidates.  My experience has not however been good and despite my best efforts a number of those who I decided to invest in decided at the end of the contract to ‘move on’.   This has led me to look at other options (such as apprenticeships), which is a shame as I have always been keen to provide training opportunities for those looking to become a solicitor.

I do consider we are on a slippery slope and one which it will be very difficult to exit without a major shift of mind set on the part of new entrants to what has become a very interesting ( to say the least) employment market.

David Pett 


MJP Conveyancing are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877067 or via email at davidp@mjpconveyancing.com

The misunderstood decision in Dreamvar (UK) Limited and Mischon De Reya and Mary Monson Solicitors Limited [2016]


The decision of Mr David Railton QC in Dreamvar (UK) Limited and Mischon De Reya and Mary Monson Solicitors Limited [2016] EWHC 3316 (Ch) has caused a major stir within the conveyancing industry and has led to a number of conveyancers questioning their exposure to liability on completing transactions on behalf of their clients.  

The facts are pretty straightforward.  

Mischon (MdR) acted for the Dreamvar in the purchase of a property from an imposter purporting to be the registered owner of the property.  The seller was represented by Mary Monson Solicitors Limited (MMS).  Upon completion, MdR on behalf of the purchaser, transferred the purchase monies to MMS, who in turn passed the money on to their client, the imposter.  By the time the fraud was discovered the fraudster could no longer be found. 

The case against the buyers solicitor (MdR) 

Dreamvar was left significantly out of pocket and commenced action against its solicitors (MdR), as well as the sellers solicitors (MMS).   

The claim against MdR was for negligence and for breach of trust. It claimed, in the first instance, MdR had failed to advise on the risk of fraud given a failure to identify certain ‘red flags’ which should have alerted MdR to the possibility of fraud. Later, and at the start of the trial, the Claimant alleged that MdR was also negligent in failing to seek from MMS an undertaking to the effect it had taken reasonable steps to establish the seller’s true identity.   In reply, MdR argued that there were not any features which pointed to an increased risk of fraud or that it was under any obligation to advise the Claimant of the risk. 

In addition, and in the alternative, Dreamvar alleged breach of trust on the part of its solicitors on the ground that MdR only had authority to release the purchase funds to MMS in connection with a ‘genuine’ as opposed to a fraudulent completion.  MdR argued in defence of this allegation that the money was released in exchange for undertakings given in accordance with standard conveyancing practice and therefore there was no such breach.   MdR also argued that if there was breach it should be able to avail itself of the relief offered under s61 Trustee Act 1925 on the basis it acted honestly and reasonably. 

The case against the sellers solicitors ( MMS) 

To begin with, the Claimant argued that MMS was liable for breach of warranty.  By confirming to the buyer’s solicitor that it was acting for the seller, it was, so the Claimant argued, giving a warranty that the seller was in fact the registered owner.  It also argued by giving such a warranty it had provided a secondary warranty that it had exercised reasonable care and skill in establishing the seller’s identity. 

MMS argued there was no warranty other than a warranty that it had a client for whom it was acting and that this was not broken because it had a client even though the client was not the registered owner. 

In answer to the other allegation MMS admitted that it did not undertake such identity checks as would have been undertaken by a competent solicitor.   It argued however that no such warranty was given and had reasonable care been exercised the chances were that the fraud would have still occurred. 

The breach of trust claim against MMS was based on the contention that upon completion it should not have released the funds to the fraudster as it was only authorised to do so in the case of a genuine completion which this was not.  

In reply MMS argued that that it did not receive the purchase monies on trust and even if it did it was not wrong to release the monies even though the completion was not as the Claimant asserted ‘genuine’.  In support of its defence MMS relied heavily in the Law Society’s Code for Completion by Post ( 2011 Edition ) ( Code).   MMS did not seek relief under s61 Trustee’s Act due to its admission that it had not carried out the checks it should have performed. 

The next limb of the Claimant’s case against MMS was based on an alleged breach of the undertaking  that forms part of paragraph 7 (i) of the Code.   This it was argued, allowed the Claimant when transferring the funds to safely assume that MMS had authority from the true owner  of the property, as opposed to the fraudster,  to accept the funds.  MMS argued that the Code refers to the seller solicitor’s ‘client’ only and this does not, nor should it, imply that the client is the registered owner of the property. 


The Seller’s Solicitor’s admission 


The seller’s solicitors admitted that its identification checks were not sufficient.  They relied on a driving license and TV license .  The driving license had only just been issued and was limited for just three years.  These features which were unusual were not challenged.

Furthermore, the TV license was accepted as proof of address when it ought to have been clear that this was not a source of proof recognised in the Law Society’s Anti Money Laundering Practice. No other checks were undertaken. Interestingly MMS conceded that they should have called the client into the office with proof of identity and address.  


The claim in negligence against the buyer’s solicitors  ( MdR) 


The Claimant did not assert that a competent solicitor acting for a buyer should in every case advise a client of the theoretical risk of fraud however remote, though it was interesting that the Judge noted that it was possible that some competent solicitors would inform their clients. 

In this case the agreement advanced was that there exists a duty to advise the client of the risks of identity fraud if there is ‘’some unusual feature of the case which would ring alarm bells in the mind of a reasonably prudent conveyancer.''   

MdR accepted this proposition, but argued that the ‘unusual features’ were not present in this case.  

In response the Claimant highlighted what it considered to be ten ‘red flags’ which ought to have alerted MdR and prompted them into warning of the risk of fraud.  These included,  the high value of the transaction and the fact the property was unencumbered and unoccupied. The fact that the seller’s address was not the same as that of the property was also mentioned. 

The Judge was, on hearing the evidence from the solicitor at MdR who handled the case,  satisfied that  a sufficient risk assessment taking into account these factors had been carried out, that there was ‘…nothing in the conduct of the transaction which suggested to MdE that MMS was not competent’. It therefore followed that there was no need for MdR to warn the Claimant of the risk of fraud. 

The other claim in negligence arose out of the alleged failure on the part of MdR to seek an undertaking from MMS to make sure it had taken reasonable steps to establish its clients identity. It was argued that this should have been done in every case, even where there was no indicators of possible fraud. 

Interestingly, the Claimant accepted that there was no requirement in practice at the time which obliged a buyer’ solicitor to seek an undertaking of this sort, but contended notwithstanding this fact, that in the absence of other measures to protect a purchaser or steps ‘…. which a competent solicitor should take to guard against the risk for his client suffering loss of this type….’ ,then the profession should be expected to depart from normal practice and take other action to protect the client. 

The Judge was not prepared however to be persuaded by this argument and found that this situation was not one where it would be right to say that the practice of the profession in not seeking an undertaking is ‘….unreasonable or illogical’.  This was partly based on the Claimant’a admission that seeking an undertaking from a vendor’s solicitor in this regard had not been regarded as necessary or appropriate. 

The sting in the tail however, was that the Judge did not rule out that an undertaking of this sort might not be regarded as such, if the protection provided by fraud risk assessment, the holding of money on trust and the Code undertaking was not held to be adequate.

The Claim for breach of trust against MdR 

There was no doubt that the money paid by the Claimant to MdR were held on trust by MdR for the Claimant. 

In handing these monies over to the seller’s solicitors on a completion which was not a genuine one, irrespective of the fact that completion took place in accordance with the Code, MdR had acted in breach of its trustee’s obligations and was therefore liable to the Claimant subject to the s61 relief argument. 

The reasoning behind this is that the Judge held that the implied authority contained within MdR’s retainer only allowed MdR to release the completion monies to the seller in the context of a genuine and not fraudulent completion.


The Claim for breach of trust against MMS


The breach of trust claim against MMS was based on the contention that upon completion it should not have released the funds to the fraudster as it was only authorised to do so in the case of a genuine completion which this was not.


Looking at this from the seller’s angle the Judge had no contactual relationship to consider as with the buyer’s solicitors, and therefore had to look at the Code and the exclusions this contained.  He was also heavily influenced by the findings of Mr Dicker QC in Purrunsing v A’ Court [2016] EWHC 789 (ch). 

He found there was no breach on the basis that the provisions of paragraph 3 of the Code state that the obligation to act as agent for the purchaser’s solicitors on completion do not require the seller’s solicitors to investigate or take responsibility for any breach of the seller’s obligations.   


Breach of Undertaking by MMS

This relates to the undertaking which MdR relied on as contained in paragraph 7(i) of the Code requiring the seller’s solicitors to have the seller’s authority to receive the purchase money. 

The question which the Judge needed to consider was whether ‘the seller’ was referring to the seller’s solicitor’s client or the registered proprietor of the property.  If the latter then as MMS did not have the authority to accept the money from the true owner they had acted in breach of the undertaking. 

On hearing the evidence of the buyer’s solicitors, the Judge held the general understanding within the profession is that a seller’s solicitors would not give, and would not be expected to give, an undertaking to the effect that the seller was indeed the registered owner of the property. 

He further found that if its right that there is no implied warranty by the vendor’s solicitors which extends to the identity of the vendor as the registered owner, it is ‘likely’ that the references to ‘seller’ in the Code relate to the person purporting to sell, and not to the registered owner. It is fair to say that the Judge found this conclusion a difficult one to reach. 

Breach of warranty by MSS


MMS accepted that it held itself out as the solicitors for the seller, but not that the seller was the registered owner. 

The Judge found that the evidence of the buyer’s solicitors was fatal to the Claimant’s argument.  The solicitor accepted in evidence that she did not expect a seller’s solicitor to accept a contractual obligation that its client was who he said he was.  Nor did she expect any warranty to this effect. Indeed she expressly stated that she did not rely on any warranty. 

For similar reasons the second part of this allegation that MSS had failed to exercise reasonable care and skill in establishing the seller’s identity, also failed to impress the Judge.   He found again relying on the buyer’s solicitors evidence that the buyer had not promised the buyer to exercise reasonable care, nor had the buyer’s solicitor relied on any such promise. 

In the absence of any duty in tort, the judge also found that it would be ‘inappropriate’ to imply an assumption of contractual responsibility to exercise reasonable care. 


The Section 61 claim for relief 

The first hurdle for MdR was to demonstrate that it had acted honestly and reasonably. 

In the light of the Judge’s finding of no negligence he was satisfied that MdR had discharged its onus of proving that its conduct was reasonable.   There was no question of any dishonesty. 

The next hurdle at which MdR failed was whether the Judge felt that MdR ought fairly to be excused for the breach, and if so, whether the Court should grant or refuse the relief. 

Balancing the ‘relative effects or consequences’  of the breach the judge held:

While, as I have held, it was not unreasonable for MdR not to have advised Dreamvar about the risk of fraud, or to have sought greater protection for Dreamvar against that risk (such as further undertakings), it is also not irrelevant that MdR was necessarily far better placed to consider, and as far as possible achieve (a matter not in the event tested), greater protection for Dreamvar against the risk which in fact occurred. As I have already found, Dreamvar has no recourse against MMS, and (it appears) no practical likelihood of either tracing or making any recovery from the fraudster. As a result, the only practical remedy it has is against MdR. 


For these reasons, I conclude that MdR ought not fairly to be excused for the breach of trust, and that I should in any event, in my discretion, decline the relief sought. I would however add that if, contrary to my conclusions above, MMS were liable to Dreamvar, I would have exercised my discretion to relieve MdR of its liability for breach of trust to the extent of the liability found against MMS.’ 

Practical Implications 


The knee jerk reaction within the conveyancing community has been that this case is authority for seeking, on each and every transaction, an undertaking from the seller’s solicitors to confirm that all reasonable efforts have been taken to identify the seller.  

On close examination this is not correct.  Indeed, as can be seen, the Judge accepted the buyer’s solicitor’s evidence that such an undertaking would not normally be regarded as appropriate or indeed essential. 

It is perhaps helpful to note here what that buyer’s solicitor told the Judge in evidence:

‘I would find it hard to believe that any law firm would give an undertaking that they verify their client. It would be watered down -- sorry to interrupt you. It would be watered down. It would say "We have verified our client to the best of our ability" or, you know, "We have satisfied ourselves as to our client's identity but ..." and it will have the big caveat on it that every law firm puts on it, which says, you know "This confirmation will not have any fallback on this firm or its partners". It would be worthless, in my opinion.’

The Judge did not rule out the possibility that in the absence of other forms of protection that such an undertaking might be regarded as appropriate.  He suggested that the Buyer’s solicitors were however better placed than their client to consider ways of providing better protection, but did not spell out what more could have been done, or more importantly, when such an undertaking might be regarded as essential. 

Clearly had there been other ways to protect the client which the buyer’ solicitors had failed to implement, and a consequential finding of negligence,  then we may have had some clues on what more is required of buyer solicitors when faced with these circumstances.  

The conclusions to be drawn are as follows:

  • If there are ‘red flags’ suggesting the risk of fraud then there is a duty on the buyer’s solicitor to make these known to the client.  In this case the Judge found on the facts that had the solicitor warned the client of the risk of fraud it would have probably withdrawn from the transaction. 

  • So this means nothing has changed  - always make sure a proper risk assessment is carried out, and clients are made aware of what you are doing, and of any concerns. There is an argument that we should perhaps be warning all clients of the risk of fraud. The Judge in this case did in fact infer that this was something which some conveyancers may already be doing. 

  • In this case even though the seller’s solicitors had failed to carry our adequate checks the Judge still found that there was no avenue of redress for the buyer. The seller’s solicitors were lucky and it is clear that had the positions been reversed the seller’s solicitors would not have escaped liability.  The Judgment contains some useful guidance of the type of checks that a competent solicitor should undertake and it is clear that using a TV licence as proof of address is not acceptable. 


Interestingly, the more important issue which arises from this case, is the one relating to implied authority and on how this only covers the release of completion funds when there is a ‘genuine’ completion. 

I would suggest that retainers should be reviewed and an express authority added which makes it clear that the buyer client is giving authority to you to release funds received from the client on the basis that you as the buyer’ solicitor are unable to guarantee that the seller is in fact the registered proprietor.  You would add to ensure the term could be viewed as fair that you will do everything expected to identify fraud and to alert the client of any concerns before any funds are released. 

This is an interesting case and its a pity that the significance of the decision  has  in certain quarters been misunderstood.   

David Pett
Solicitor and Conveyancer at MJP Conveyancing Limited 


MJP Conveyancing are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877067 or via email at davidp@mjpconveyancing.com

Are conveyancers moving closer to a 'strict liability' regime for property related fraud?

Are conveyancers now looking to be held strictly liable for all identity related fraud stemming from conveyancing transactions?

Though we might not be there quite yet, it seems we have moved one step closer with the news that solicitors Mishcon de Reya have been found liable for breach of trust after its client was duped into buying a London property from a tenant posing as the owner.

I have not seen the transcript of the judgment but from what I have read it seems the claimant, the purchaser client, was left out of pocket to the tune of £1m when it came to light that the seller was not the legal owner of the property, but rather the tenant purporting to be the owner.

The deputy High Court judge David Railton QC found in favour of the claimant in action brought against Mishcon de Reya based on a breach of trust.   The judge found that Mishcon, presumably as the trustee of its client’s money, should have obtained an ‘undertaking’ from the sellers solicitors that it had taken all reasonable steps to establish its clients identity.

This differs from the cause of action in the similar case of P&P Property Ltd v Owen White & Catlin LLP & Anor, where the buyer failed in claims for breach of warranty of authority and negligence against its solicitors and estate agent.

The decision must be viewed as extremely worrying for conveyancers and, though it is likely to be appealed, it has clearly left practitioners in a state of flux.

Until clarity arrives what should a prudent conveyancer do?

Acting for the seller

To begin with, it will be important to always check the title documentation carefully and to identify transactions where the seller is shown to be living at a different address than the property address.  Practitioners should also be alert to situations where the correspondence address for the seller is different from that shown on the title document for the property or the seller’s correspondence address.

I would suggest these transactions once identified should be brought to the attention of the compliance officer/partner/director and marked as a high risk transaction.

I also suggest an added level of client ID checking is undertaken.  There is a need to make sure the client can show that he or she is connected to the ownership of the property.  In our office we now ask in these situations for the client to provide us with details of the solicitors who acted on the purchase of the property and to provide documentation relating to the instruction of those solicitors if available.   Our reasoning is that an imposter is unlikely to know the identity of the solicitors who acted.  It will also be open to us to contact those solicitors and make appropriate inquiries if necessary.

If we were asked for an ‘undertaking’ or a warranty as to true identity of a client, the best advise will always be to say ‘no’ irrespective of  the Mishcon de Reya decision.  All that one should say, is that we have undertaken those checks which are required of us by legislation and professional regulation.  It is clearly down to those who set these rules and requirements to issue further guidance and all one can do in the meantime is to follow and abide by what is currently in place.

Acting for the buyer

As above, when checking title and identify, those cases which could present the potential for fraud should be brought to the attention of the compliance officer, partner or director.

You can always ask the sellers solicitors to warrant that the seller is the true owner of the property or to provide an ‘undertaking’, though as I say above, I expect the seller’s solicitor will not be minded to assist.

You could also ask in the additional enquires for evidence linking the seller to the property to be produced  - e.g. stamp duty return when the property was purchased or some other document only the true owner could produce.   I suspect the seller’s solicitors may argue that this is not an appropriate enquiry to raise and refuse to answer.

What happens if the seller is not prepared to play ball?

The buyer client should be informed of the risk and advised in very strong terms not to proceed with the transaction without first seeing evidence of this type.  If the client says notwithstanding this advice he or she still wishes to proceed then a written disclaimer should be sought from the client.

Conclusion

The judge in Mishcon de Reya decision is reported to have said that it was only fair for the claimant to make a recovery, as in his view, by finding in favour of the claimant this was the only ‘practical remedy’ in the light of the fact that the defendant had insurance.   This reminds me of the days of Lord Denning when decisions were based not on the law and good practice, but rather on the equity of the situation.    This is all well and good but its consequences are far reaching for the high street conveyancer and will surely leave a lot of us thinking is it really worth running and taking responsibility for all of these ever increasing risks when the fee we able to charge is often much less than that charged by the lender, the broker, the panel manager, and the estate agent. 

One simple solution to all of this uncertainty and exposure is to provide an alternative to the holding of client money.  Surely this decision cries out for serious consideration to be given to moving the management of client funds away from the conveyancer to a regulated and centralised third party. 



MJP Conveyancing are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877067 or via email at davidp@mjpconveyancing.com