The Lemon Fool

Hi, I'm interested in a flat in a town centre department store conversion. On the face of it it looks to be being done to a high standard, the developer is Genesis Developments who seems to specialise in this sort of thing looking at their website, they're an Israeli outfit by the looks of it, I hadn't heard of them before. I haven't made up my mind yet but wanted to ask about the pitfalls of using their recommended solicitor, if I do they'll put £1000 towards the legal fees, presumably to speed things up as the pack will be thick and complicated and another solicitor will take that much longer.

I expect it's being done under the new permitted development rights rather than full planning permission, which came in earlier this year I believe. If so I imagine that that adds to the legal complications.

Any thoughts?

Never ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever use the developers recommended solicitor. (a) they have paid the developer to be recommended, that payment is funded either by them using juniors to do the work that a senior should be doing, by skimping, or by over charging you and (b) where do you think their loyalty ultimately lies?

DM

dionaeamuscipula wrote:Never ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever use the developers recommended solicitor. (a) they have paid the developer to be recommended, that payment is funded either by them using juniors to do the work that a senior should be doing, by skimping, or by over charging you and (b) where do you think their loyalty ultimately lies?

DM

Well this was my first instinct and I'd read horror stories about the fall out from this sort of arrangement in the past, but if it's so dodgy why does the law society still allow it?

Fluke wrote:
Well this was my first instinct and I'd read horror stories about the fall out from this sort of arrangement in the past, but if it's so dodgy why does the law society still allow it?

Probably for the same reason they allow internet solicitors who in my experience have been universally abysmal.

Buying a property is the biggest value item most people buy. It's important to have the legal work done properly. I find a well recommended local solicitors practice takes some beating. They might be a little more expensive but it's a rounding error when you could be spending hundreds of thousands on the property.

Fluke wrote:

dionaeamuscipula wrote:Never ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever ever use the developers recommended solicitor. (a) they have paid the developer to be recommended, that payment is funded either by them using juniors to do the work that a senior should be doing, by skimping, or by over charging you and (b) where do you think their loyalty ultimately lies?

DM

Well this was my first instinct and I'd read horror stories about the fall out from this sort of arrangement in the past, but if it's so dodgy why does the law society still allow it?

Who funds the law society and where does the law society's loyalty lie?

The problem is, if you use the developer's recommended solicitor everything will go through swimmingly, for certain, and you'll be very happy with their service.

When you come to sell it might be a different story. When a buyer's own solicitor gets to trawl through it all, on the lookout for problems the future buyer might have, they will gleefully point them all out to you. Only then will you discover how good or bad a job the developer's solicitor did in advising you of any 'gotchas' in the lease or in the title.

The most common recent problem has been ground rents that compound up, doubling (say) every ten or even five years. Buyers claim to have been unaware of this until they came to sell and the buyer sols advised against purchasing.

sg31 wrote:

Fluke wrote:
Well this was my first instinct and I'd read horror stories about the fall out from this sort of arrangement in the past, but if it's so dodgy why does the law society still allow it?

Probably for the same reason they allow internet solicitors who in my experience have been universally abysmal.

Buying a property is the biggest value item most people buy. It's important to have the legal work done properly. I find a well recommended local solicitors practice takes some beating. They might be a little more expensive but it's a rounding error when you could be spending hundreds of thousands on the property.

Yeah you're right about the cost and that wasn't my main concern, more the size and complexity of the pack that could derail things, but yes the recommended route does have a certain whiff of 'what could go wrong' about it doesn't it.

Mike4 wrote:
Who funds the law society and where does the law society's loyalty lie?

The problem is, if you use the developer's recommended solicitor everything will go through swimmingly, for certain, and you'll be very happy with their service.

When you come to sell it might be a different story. When a buyer's own solicitor gets to trawl through it all, on the lookout for problems the future buyer might have, they will gleefully point them all out to you. Only then will you discover how good or bad a job the developer's solicitor did in advising you of any 'gotchas' in the lease or in the title.

The most common recent problem has been ground rents that compound up, doubling (say) every ten or even five years. Buyers claim to have been unaware of this until they came to sell and the buyer sols advised against purchasing.

So the solicitor that you have appointed to do the conveyancing on a property purchase is not legally obliged to point out any gotchas such as doubling ground rent/service charges etc, because he is in hock to the developer? How is this legal?

Fluke wrote:

Mike4 wrote:
Who funds the law society and where does the law society's loyalty lie?

The problem is, if you use the developer's recommended solicitor everything will go through swimmingly, for certain, and you'll be very happy with their service.

When you come to sell it might be a different story. When a buyer's own solicitor gets to trawl through it all, on the lookout for problems the future buyer might have, they will gleefully point them all out to you. Only then will you discover how good or bad a job the developer's solicitor did in advising you of any 'gotchas' in the lease or in the title.

The most common recent problem has been ground rents that compound up, doubling (say) every ten or even five years. Buyers claim to have been unaware of this until they came to sell and the buyer sols advised against purchasing.

So the solicitor that you have appointed to do the conveyancing on a property purchase is not legally obliged to point out any gotchas such as doubling ground rent/service charges etc, because he is in hock to the developer? How is this legal?

It probably isn't legal, but pragmatism roolz, as the graffiti sometimes says. If you'd prefer to rely on what ought to happen as opposed to what often or even sometimes happens, go ahead and use the recommended solicitor. It may well work out fine but if it doesn't, you're stuffed. (Technical legal term.)

We never hear about the cases where developers' solicitors do a great job and tell the buyers about all the lease terms benefitting the builder rather than the buyer, thereby losing the builder a sale, because the law requires them to. Or about all the cases where the lease contains nothing dodgy and there was nothing to worry about in the first place. You may well be dealing with decent, honest and honourable developers and solicitors. We are just pointing out things that could go wrong, not will.

Mike4 wrote:You may well be dealing with decent, honest and honourable developers and solicitors. We are just pointing out things that could go wrong, not will.

I know - thanks

Fluke wrote:

Yeah you're right about the cost and that wasn't my main concern, more the size and complexity of the pack that could derail things, but yes the recommended route does have a certain whiff of 'what could go wrong' about it doesn't it.

I bought and renovated properties for a living before moving into buying and renting out. Part of that involved buying and selling quite a number of properties. If internet solicitors were acting for the other party things never went smoothly. Documents lost, late replies, answers that couldn't be true. It was horrific.

In many cases I contacted the other parties to break through logjams, usually they were as frustrated as I was and even contacting their solicitors didn't help. In the end I refused to sell properties to people using internet solicitors. When I explained why, buyers would usually be happy to use a proper high street solicitor despite the higher cost to them.

sg31 wrote:

Fluke wrote:
Well this was my first instinct and I'd read horror stories about the fall out from this sort of arrangement in the past, but if it's so dodgy why does the law society still allow it?

Probably for the same reason they allow internet solicitors who in my experience have been universally abysmal.

And internet licensed conveyancers are even worse!

https://www.thisismoney.co.uk/money/mor ... ected.html

Fluke wrote:Hi, I'm interested in a flat in a town centre department store conversion. On the face of it it looks to be being done to a high standard, the developer is Genesis Developments who seems to specialise in this sort of thing looking at their website, they're an Israeli outfit by the looks of it, I hadn't heard of them before. I haven't made up my mind yet but wanted to ask about the pitfalls of using their recommended solicitor, if I do they'll put £1000 towards the legal fees, presumably to speed things up as the pack will be thick and complicated and another solicitor will take that much longer.

I expect it's being done under the new permitted development rights rather than full planning permission, which came in earlier this year I believe. If so I imagine that that adds to the legal complications.

Any thoughts?

Many national home builders prefer buyers to use their solicitors. Essentially the terms and conditions put in place handcuff buyers later if they have serious issued with the standard of build. Smaller builders may have a similar view of passing the risk to a buyer and limiting their exposure.

Caveat Emptor - let the buyer beware.

There's been a massive effort by house builders to improve the quality of their build and after sales service. But there's also an insidious under belly that still pervades within the industry of skill shortages, poor workmanship and risk aversion. You may feel that what you see looks good. Unless you know what you're looking at and understand what you can't see you need to show some extreme caution.

Be careful. [very]

AiY