Lawyers vote to raise cost of buying home
triStan Home-buyers face paying hundreds of pounds in added legal fees after lawyers voted in favour of new conflict-ofinterest rules.
The Law society of scotland passed a proposal changing the current practice, where solicitors act for both the buyer and mortgage lender, to a system where separate representation is required.
It is feared the move will not only lead to extra cost for buyers, but also create delays by adding another professional to the process, and so hit the fragile housing market recovery.
It was the third year in which the society has debated ending the exception, with previous votes going against change.
but at their annual general meeting yesterday, members voted 58 to 27, with three abstentions, in favour of the proposals.
The proposals will now go to a special general meeting in september, when they will be brought into force.
The society has not said how much extra buyers may have to pay, and stressed it would be up to mortgage lenders to decide whether to pass the cost on.
The Council of Lenders (CmL) has opposed the changes.
HsbC already charges people £150 if they want to instruct their own solicitor.
Austin Lafferty, president of the Law society, said “sep rep” or separate representation, was needed with lingering concerns about mortgage defaults.
He said: “The exception to the rules was introduced in 1986 to mortgage
strongly help ensure a smooth transaction, but the world is a very different place now.
“The severe economic downturn, increasingly complex transactions, increasing risk of mortgage fraud and the additional pressures from lenders mean that it is no longer appropriate, and indeed is arguably not in the public interest to continue.
“We are fully aware of the potential for increased costs for buyers and increased paperwork for solicitors.
“It will be for the lenders to decide on whether they are pre- pared to pass on these their customers.”
CmL director-general Paul smee said: “It is disappointing that a measure which is so blatantly against consumer interests, and will impose added costs and added scope for confusion and delay, has been voted through.
“At a time when housing and mortgage markets are still recovering, this is a protectionist
costs
to measure with little regard the interests of consumers.”
Allan radlow, senior partner at mcVey and murricane, said separating representation will add expense for buyers, sellers and lenders, as well as further slowing the property market.
He said: “In a market lacking confidence, the last thing needed is increased costs for consumers. I am concerned also for those parts of the legal profession supporting this change. Negative unanticipated consequences could ensue.”
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