Conveyancing has always been a high risk to Insurers and at the moment this is the main topic of conversation due to so many issues going on for example:
Cyber Crime – Significant number of claims occur with conveyancing where monies are released to a fraudster where either they call the Solicitor Branch to change bank details, or they intercept emails to change bank details.
They can even pursue a solicitor to act on the sale of a property they do not own. Some Insurers are requesting that firms have safeguards in place such as MFA and VPN in place. A separate Cyber Policy is always recommended.
Stamp Duty Holiday – During this time Solicitor Practices were extremely busy causing high volume of workload as well as the additional issue of remote working, this increased the risk of errors being seen by Insurers such as failure to report on title and failure to obtain searches, as well as missing deadlines.
Escalated Ground Rent – This is where developers sell new build houses on a leasehold basis and enables them to charge ground rent and other charges at a higher amount than normal and are able to increase these as they see fit.
Claims have been notified for failing to identify the escalating ground rent in leases or have not advised their clients of the implications of these.
The SRA published an article for advising on leasehold provisions including ground rent clauses to assist for anyone dealing with conveyancing work.
Submitted by Simon Ong