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Some solicitors are not explaining what leasehold property is

Karl Lewis
Posted by: Karl Lewis Solicitor - Head of Conveyancing

Conveyancing Solicitors must inform their clients of the difference between freehold and leasehold property ownership


A large number of conveyancing law firms are still failing to explain the difference between freehold and leasehold ownership to their clients the Solicitors Regulation Authority (SRA) has found. According to their research report, nearly 25% of law firms handling leasehold purchases did not explain the difference between freehold and leasehold ownership. The report states that “Several firms said that they saw no reason to do this because they assumed the client would know the difference or the estate agent would have explained it to the client. We consider this a dangerous assumption.” A client would surely expect their solicitor to properly advise and not make such assumptions.

The finding links to the ongoing story regarding the mis-selling of leasehold properties with excessive and ever-increasing ground rents which have made some properties unsellable. The report states further that “We expect all firms to clearly report in writing to clients on whether a property is offered on a freehold or leasehold basis, and what the implications of this are to the buyer.”

On the plus side the report states that over 75% of clients were satisfied with the services provided by their conveyancing solicitor. It did however note several areas for improvement: 

·        inaccurate initial cost estimates: 34% of firms failed to include all the services/fees a matter could reasonably expect to attract in their initial quotes; and

·        not being open about the real cost of third-party disbursement and their firm's mark-up on these - specifically telegraphic transfers. In 37% of cases firms failed to do this, with some charging up to 10 times the actual bank charge for processing the transfer.

The research was undertaken at over 40 conveyancing law firms who offer residential conveyancing services. Unfortunately the SRA were concerned enough in some instances to refer 6 cases to its  disciplinary processes. These included: anti-money laundering (AML) issues arising from a failure to investigate source of wealth and listing telegraphic transfer fees as a disbursement rather than a profit cost.

The conclusion to the report states that “Whether its providing unrealistic or incomplete quotes, or failing to make sure contractual information has been fully understood, solicitors are potentially leaving their clients exposed to significant risk or potential financial hardship”. 

PSR Solicitors are aware of certain housing estates where issues are now arising as people are trying to sell their leasehold property only to discover that their homes re basically unsellable due to the increasing and excess ground rents being charged. Most of these homeowners did not receive proper legal advice when purchasing their home. These homeowners are now looking to sue their solicitors for providing sub-standard legal advice.

We only employ qualified conveyancers with experience in not only leasehold properties but freehold too. We also hold the Conveyancing Quality Standard from the Law Society which assures clients that they are dealing with a professional solicitors firm who can provide you with the advice you require.​​​​​​ So if you require legal help with your property purchase, whether leasehold or freehold, then do not hesitate to contact us.


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