Family Building Society Conveyancing Panel Information

As is the case with the Law Society the Council of Licensed Conveyancers has begun discussions with banks and their representative bodies to see whether and how the risks that lenders wish to mitigate could be addressed through the regulatory framework rather than via ad hoc arrangements that can differ from lender to lender. We expect that that the CLC have been in touch with lenders such as Family Building Society in recent years.

You might expect Family Building Society via their Part Two obligations to address this but the Handbook makes no mention on time frames. Do look at the Terms of Family Building Society’s Conveyancing Panel Appointment that you are bound by. For a number of banks these Terms have a provision along the following lines: ‘To keep us informed of the reasons for any delay in your being able to send the title deeds and documents we require to us within 3 months of completion or evidence of proof of registration within that period. (We will send reminders if the deeds have not been received but will not acknowledge receipt of deeds’ It is imperative to keep Family Building Society updated. Law firms can often compound their problems by not communicating with the lender when there is a delay or problem.

What you should do largely depends on the reason that your firm has been removed off the Family Building Society conveyancing panel. The top 3 reasons are as follows:

1. lack of transactions
2. the lawyer is a sole practitioner
3. as part of the HSBC panel reduction.

In these three circumstances it is unlikely that you would expected to take any action. Disclosure and other compliance considerations are more likely to be relevant if the reason for removal is due to breaches of lender requirements or allegations of fraud or negligence. Whether the reasoning should trigger a disclosable 'material' breach will depend on the firm and the circumstances around possible failures to comply with the SRA Authorisation Rules, and the SRA will judge each case on its own merits. Factors such as the detriment or risk of detriment to clients, the scale of the issue and overall impact on the firm will need to be considered in deciding whether a failure is 'material'. As the COLP you will need systems to identify patterns of breaches. Even if you don't consider there to be regulatory implications the firms COFA should give some thought to whether she/he needs to take any action as result of being removed from the Family Building Society conveyancing panel.

You will be aware of the trend in recent years for lenders such as Family Building Society to take a much more pro-active approach in relation to the management and make up of their conveyancer panels. The knock on effect of this is that it is more likely that there will be a higher number of cases where a conveyancer is not on the Family Building Society panel. The situation that you find yourself in is where your client’s purchaser has his/her own lawyer and Family Building Society have appointed a separate lawyer to act on their behalf where the new CML Part 3 requirements apply. Section 11.1 of the UK Finance Lenders’ Handbook Part 3 requires Family Building Society’s panel solicitor to ‘ ...transfer the mortgage advance directly to the Seller’s conveyancer. The Seller’s conveyancer must be required to hold the mortgage advance on the terms of the required undertaking. The example borrower’s conveyancer’s undertaking letter includes a specific example of the seller’s undertaking’. You should expect to be advised to received the mortgage advance directly from the conveyancing solicitors for Family Building Society. You will no doubt be required to undertake directly to Family Building Society’s solicitors to discharge any charges secured on the property and to send directly to them the executed transfer and any other documents required to enable us to effect registration. Please remember to carefully consider undertakings in accordance with your firm’s protocol and record them in your undertakings logg. Please remember that as well as this breach of this undertaking having regulatory and compliance implications it’s breach could also result in your firm being removed off the Family Building Society conveyancing panel.

CQS membership is no guarantee to lender panel acceptance. Nevertheless the Council of Mortgage Lenders have indicated that it is likely to become a prerequisite for firms wishing to join their approved list of firms. Some mortgage companies now use the scheme as the starting point for Panel membership such as HSBC.

You would be advised to communicate with Family Building Society to obtain standard documents. The The Council of Mortgage Lenders Handbook includes an individual section for lenders to reveal who to contact to obtain standard documents. Family Building Society in their Part 2’s state: Don’t forget to quote the firm’s Family Building Society solicitors panel number.