The conveyancing countdown begins this week.
With slightly more than two months until the new practice rule 6 and Lenders' Handbook come into force, the Law Society is holding its first roadshow to help practitioners come to terms with the new world of detente between lenders and the solicitors they instruct.
The handbook itself is being distributed with this week's Gazette.
The handbook has been accepted by the Abbey National, Halifax, Nationwide, Woolwich, Alliance & Leicester, NatWest Home Loans and the Cheltenham & Glouces ter, which between them have a 60% share of the mortgage market.
Another 60 lenders have expressed interest in it.
There are hopes that in time, 90% of the lending market will sign up to using the handbook.
The handbook is in two parts.
The first contains standard instructions.
The second describes circumstances in which conveyancers must contact the lenders, and details about who to contact and the areas in which the lenders' practices will continue to differ.
However, while the new rule 6 comes into force on 1 October, some of the lenders are expecting solicitors to use the handbook sooner.
The Halifax is bringing it into use from the end of this month, while the Abbey National is starting from 8 September.
This all makes familiarisation with the handbook absolutely vital, stresses Ken Byass, a member of the Law Society's rule 6 working party, who for many years led the ultimately fruitless negotiations on standard mortgage instructions (SMI) -- although to many, the new rule 6 and handbook between them represent the SMI by another name.
'It is a completely new era,' he says.
'If solicitors get to grips with the new rules, we should see a reduction in lenders' claims.' Mr Byass recognises that many solicitors do not read all the different sets of instructions put out by different lenders.
Instead they 'fly by the seat of their pants' with a general knowledge of what lenders want.
While for most solicitors, this is sufficient, it has led to enough mistakes to bring about the tide of claims against solicitors that so marked the early part of the 1990s.
But now there is a single set of instructions that solicitors have to read, Mr Byass says.
They should also go to a seminar -- either a Law Society roadshow or one put on by a commercial provider -- to see how the handbook and the new rule 6 fit together.
For in areas such as defective title insurance and leasehold properties, he warns that 'what the lenders are asking for will come as a surprise' to many practitioners.
Conveyancers will have to change their systems, Mr Byass adds.
Where previously they could submit a qualified report on title with a note of a problem uncovered, now they have to notify the lender some time before sending in the new certificate on title.
When the Law Society Council approved the new arrangements, Richard Hegarty, a former chairman of the property and commercial services committee, produced a checklist of 125 different matters conveyancers had to look at as a result of rule 6 and the handbook.
While the Society's working party has not adopted Mr Hegarty's list and may not agree totally with his analysis, it will provide conveyancers at the seminars with a package of documents that includes its own checklist.
The lenders have long been deeply unhappy with rule 6, which they consider an unreasonable incursion on their right to instruct solicitors freely.
Some maintain that rule 6 is poorly drafted and that it will as a result actually increase claims against solicitors.
However, publicly, they restrain their criticisms so they can send a more positive and encouraging message to the profession.
Michael Webber, chief solicitor at the Woolwich, says the joint effort of the Law Society and Council of Mortgage Lenders -- co-operation which after many years of conflict is a 'relief' -- has produced 'something the profession will find easy to operate.
But at the end of the day, it's the customer that matters and I would hope this would improve the service offered'.
Mr Webber says changes to the bank's systems and staff training are 'well in hand'.
This has mainly taken the form of removing instructions from the package that is automatically sent to solicitors with the mortgage offer.
For additional information mentioned in part two of the handbook, he says the Woolwich, in common with most of the other lenders, is planning to detail where to get it on its Web site.
Mr Webber hopes that, 'given the detailed nature of the handbook, there will be fewer enquiries from solicitors about our requirements'.
He too, expects claims against solicitors to fall.
Roddy Garden, the lead lawyer in the retail lending section at the Halifax who led much of the lenders' work on the handbook, says that while in the short- to medium-term, he too expects the number of enquiries from solicitors to fall, in the long term he says there is unlikely to be much difference.
The Halifax's mortgage practice notes have been around for more than 20 years and the bank still receives around 10,000 queries a year from solicitors, he says.
Mr Garden says there 'isn't anything radical' in the handbook that should surprise solicitors as they approach the new scheme.
And his message to conveyancers? 'Read your instructions.
Read the lenders' handbook.
It's not a difficult message.'
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