Winchester property blog

Welcome to our latest Winchester property blog, Blake Lapthorn's look at the legal issues of interest to property professionals.

Scroll down or click on the bookmarks in the right hand navigation menu for more details on the topics covered in this issue.

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Welcome to the Christmas edition of the Winchester property blog.  It is difficult to feel very festive when the market shows no sign of recovery, John Sergeant has resigned from Strictly Come Dancing, and Robert Kilroy-Silk is all over the TV again.

Perhaps 2009 will be better.  The new year will begin with Obamas in pyjamas coming down the stairs of the White House.  Let's hope a new President ushers in a new optimism. 

In this issue, we will be looking at new land registration rules that came in on the 10 November 2008 as well as taking another look at the issue of deposits, which we considered in the last issue.

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Land Registry requires evidence of identity

These days it seems to be necessary to offer a blood sample before opening a bank account.  Solicitors are now becoming used to having to carry out identification checks every time they open a file. 

The great news is that the Land Registry has now got in on the act.

From the 10 November 2008, conveyancers are also required when lodging certain types of applications to identify who represented other people involved in the transactions and if no solicitor or conveyancer is acting, they must either confirm that they are satisfied that sufficient steps have been taken to verify the identity of the unrepresented person or to lodge evidence of their identity.

Yet again, the impact of money launderers on the property market is causing bureaucratic headaches for the innocent majority.

However, will these changes be quite as draconian as might first appear?

In fact, in the vast majority of cases both parties will be represented.

For example, if Mr Smith is buying 10 Acacia Avenue from Mr and Mrs Jones with the aid of a mortgage then it is extremely unlikely that any of the parties will be unrepresented and therefore there is going to be little or no extra burden on property professionals. 

However, there will be instances where unrepresented parties are involved in property transactions.  The most obvious of these would appear to be beneficiaries under wills.

Put simply, when executors under a will transfer the property to the person to whom it has been left under that will, a Land Registry application has to be made.  It is likely, unless the executor and the beneficiary are the same person, that the beneficiary will not have instructed solicitors.  In those circumstances the ID checks will have to be carried out.  This means that forms will have to be sent to the beneficiary who will then have to either go and see a solicitor to prove their identity or attend at the local office of the Land Registry. 

One would hope that beneficiaries will have a vested interest in dealing with the paperwork quickly, but I can see situations where property transfers are delayed over this.

Another scenario would be where a couple split up and one or either party is unrepresented by solicitors.  The Land Registry have produced helpful guidelines to deal with the identity requirements for conveyancers and they have also produced another guide for non conveyancers who are doing their own legal work – rarely a good idea in my experience.

It will be interesting to see how the new requirements bed down and whether they have any impact on the amount of mortgage fraud in the future.

can you get your deposit back – part 2

Last month I made brief reference to an 83 year old law which states that a court may "if it thinks fit, order the repayment of any deposit". Section 49 of the Law of Property Act 1925 has clearly become flavour of month. Our trade paper, the Law Society Gazette, contained an appeal from a firm of solicitors in London asking whether any solicitors have clients who have found themselves in difficulty when buying off plan. I explained the off-plan concept in last month's issue.

These solicitors have clients who fell foul of the current downturn and stand to lose their deposit. As I mentioned last month, according to case law, an action under Section 49 (2) will only be acceptable in exceptional circumstances. Interestingly, these solicitors say that they consider the current recession to be an exceptional circumstance!

It will be interesting to see whether this is tested in the courts and I will keep an eye out for further developments.

If you would like to know more about any of the issues raised in the articles above, please contact any of the Residential Property team in Winchester - T: 01962 844440; E: radu.herklots@bllaw.co.uk.