Property buyers should exercise caution when it comes to taking recommendations

October 12, 2021

A leading Cheshire conveyancing solicitor has urged prospective buyers of new homes to be vigilant when it comes to taking a seller’s recommendation on law firms.

It follows the news that a major housebuilder is to scrap contract terms which were written into the sale of its homes and led to significant and unexpected increases in charges for homeowners, known as ground rents.

Chris Illingworth, partner and member of the conveyancing department at Warrington-based Watsons Solicitors, says that while pressure from consumer groups and government has resulted in such rises being cancelled by builders like Countrywide and others, the problem illustrates the need to choose a conveyancer carefully.

Ground rents are paid by those who purchase homes with leasehold contracts to the owner of the site’s freehold. Similar terms can also result in the price to obtain the freehold rising as well.

Chris said: “Several major housebuilders have now stopped these increases in favour of inflation-linked rises, either because of consumer or political pressure, or because of action from the likes of the Competition and Markets Authority (CMA).

“Ten years ago, when these were created, lenders and buyers were both comfortable with them, but they’ve become more and more commercially unacceptable.

“They were seen as money for nothing by the housebuilder, they’d agree this charge with the buyer, and then sell the deeds to institutional investors who’d then have the right to collect steady payments for the next 200 years. But not anymore.

“If you were to buy a property with these terms in, at Watsons we would look to change them as a matter of course now.

“The way to fix this is to go through a legal process to agree a Deed of Variation. So, Countrywide may have to grant these to their leaseholders, as well as pay the legal and Land Registry fees themselves.”

Chris believes this shows the value of taking the time to choose the right solicitor for the job, and not be swayed by recommendations or warnings over sales not completing in good time, when it comes to the largest purchase many individuals will make during their lifetimes.

Chris added: “Builders are often keen to push a house buyer towards a particular conveyancer. Sometimes there’s a financial incentive, or it’s because the solicitor has been working with the builder for a long time and knows the ropes.

“There are companies out there that have a great deal of new build work, and the concern from a consumer point of view is, what is the relationship? Is this firm worried about their next referral, and the one after that, or are they worried about you and your sale?

“Very often they also don’t employ staff with the same level of qualification as others, which has its own problems.

“At Watsons, we take great care in ensuring we have an experienced solicitor working on each case, which has always served us and our customers well.”

Watsons Solicitors, which has been established for more than 60 years, specialises in family law, employment law, wills and probate, and conveyancing.

The team of experienced solicitors each hold various accreditations and memberships of professional bodies relevant to their expertise, while the firm’s partners oversee all areas of work.

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