Compliance

The headwinds mount on conveyancing in Scotland.

Why McVey & Murricane make a difference

Compliance

Those with long memories within the firm can recall a much simpler time in the conveyancing and property law world.


Scottish lawyers would point to the "superiority" of the Scottish system over that south of the border pointing to gazumping, chains and general uncertainty.



Such claims now look very hollow because the Scottish system, with the exception of gazumping, is bedevilled by the same problem of uncertainty, chains and a very stressful experience (even where everything goes well). Crucially, there is not a collective professional acknowledgement of this and as such people are sometimes provided with an inaccurate view of the reality of dates of entry being determined at the offer stage.


What has caused the change?

  • Regulation

    The law relating to property and particularly conveyancing transactions has been overwhelmed with constant regulatory change over the last 20 years. The rate of that change appears to increase exponentially.


    The causes of the regulatory change for within three heads.

  • Property Law and registration

    Not only is the content of property law and registration radically changed, but the impact of the change resulted in a much more forensic attitude by conveyancing lawyers, concerned with mounting areas of liability.


    The result is that transactions are more difficult, raise more issues and, in a way that is often bewildering to clients, result in issues that were not germane even three years ago now becoming problematic.


    A good example relates to plans. As electronic assistance has become more widely available close scrutiny using tools such as Google Maps mean that problems which would not have arisen even a few years ago are regularly raised. The problem is exacerbated by the fact that the Ordnance Survey map on which the Land Register is based is often many years out of date and uses a scale which is far too large to properly identify features affecting boundaries.


    These are areas where the expertise and strength in depth of MM are so important. Whether you are buying or selling a property, a deep understanding of property law and the true impact of these regulations is necessary.

  • Money-laundering and compliance

    It is only needs a quick glance at the London property market in the years before the pandemic and Brexit to view the appalling misuse of property. Super-expensive properties were being bought by overseas investors not to be used but as a pseudo-currency and investment.


    At the time of the Gren fell tragedy only a couple hundred metres away these follies could be seen. It was also clear that the tools of money-laundering were not effective. An overhaul of the system took place becoming effective in 2018 and it is impact is steadily being seen.


    As the teeth of the anti-money laundering regime become apparent it represents a major impact upon property transactions. The normal person is, of course, not involved in any nefarious activities but that is no longer the test. It is now necessary to prove a negative; that money being used for a property transaction is provably not involved in money laundering. Money-laundering includes anything that might be deemed criminal or breaking regulation. It is phenomenally wide.


    These are the rules and we have to abide by them but, again compared with only the recent past, the result is to make property transactions as much about regulatory matters as they are about legal practice. That means an increase in stress, delay and expense.

  • Professional changes

    The final headwind impacting property transactions are ongoing changes in professional regulation. All of these have a laudable aim but they increase the "overheads" of property and conveyancing transactions. It means that the traditional approach between solicitor and client is impacted. All aspects of a relationship must be clearly documented and subject to data protection rules and many other matters. It de-personalises the service.


    Because many of these rules are relatively recent the pace by which they are absorbed by the legal profession varies. This creates an awkward situation where an explanation to a client may be met by the statement that a friend or relative recently undertook the same type of situation but did not encounter the problem.


    However, such a view is misplaced. Law and regulation need to be followed because there are repercussions if they are not.


    Of course, many of these new laws and regulations are foolish. One sometimes wonders whether those creating these obligations have ever been involved in a property transaction. However, the inappropriateness of these obligations does not mean they can be ignored, however much would wish that to be the case.


    Dealing with property transactions properly is important for the client to ensure that their current transaction complies with current regulations and thinking. The client would not wish to face issues at a later date that were apparent at the time they acquired or sold a property.