Property law in the digital age

The digital age has led to big changes in not only the amount, but also the quality of information available to everyone in the property world and much of this is not limited to the professionals – the consumer can now easily access information directly.

There are now several house price indices (almost too many) that regularly commentate on the trends in the market providing data that can be drilled down to local areas. Property portals such as Zoopla and Rightmove now offer a range of sold price information databases, meaning that consumers have a much more accurate view on how much a property might be worth and estate agency websites now provide home buyers with instant access to additional information from transport links and the best local schools through to local amenities.

All of this information inevitably places much more power with the client in terms of finding a property and agreeing property price. But what about the actual conveyancing process? How should the property lawyer ensure that they have completed satisfactory due diligence and are using the best information at their disposal to the benefit of their client?

Greater responsibility

The information age has certainly not fallen
short of providing data when it comes to the
due diligence side of transacting a property,
and with greater information available comes greater responsibility.

Now, there are so many different types of search available, depending on the type of property and the size of plot of land in question and, because of this, the lawyer requires even more knowledge and insight to choose which reports to order to provide the client with the most useful and relevant information for their transaction.

Whether the transaction involves a small residential property, a large commercial development, or a farm, there is likely be a report specifically designed to address the risks that size and type of property presents. Not only is there so much more information available, but there is better technology available to analyse the data, meaning that more potential risks can be assessed.

Whereas flood risk may have been assessed on a property’s proximity to the sea or a river combined with the recent history of flooding in the area, nowadays, sophisticated analysis of the geology combined with insurance data, and historic records combine to uncover unexpected risks such as those suffered by residents in Hull and Tewkesbury in recent years.

These days, with everyone’s time at a premium, combined with the fear and cost of losing a sale or the ultimate purchase, the importance of managing the client’s expectations and having timely access to information at the outset is paramount, and can only lead to a better solution for everyone.

Much of the additional information available to inform the transaction can assist a property lawyer by ensuring that they have covered their client’s back and are enabling them to complete the transaction with their eyes wide open. However, it does not all have to be about identifying potential problems as some of the data available now can also reveal hidden opportunities.

The challenge for the conveyancer is deciding which issues need to be investigated. Clearly, a property in Manchester does not need a report as to whether it is going to be affected by the London Underground system, but other risks may not be so easy to spot. For example, there are infrastructure reports for the Forestry Commission, Civil Aviation, and the Canals and River Trust.

Search ordering platforms will alert the conveyancer when an infrastructure report is required and the digital result can be returned and available to view within a day.

On a residential transaction where there is a mortgage involved, the conveyancer’s obligation is to also look after the interest of the lender and, in this case, the lender is likely to have their own list of requirements and expectations when it comes to due diligence.

Unwelcome questioning

Complying with their requirements as laid out in the CML Handbook presents another complication for the conveyancer – especially when the needs of each particular lender are subject to change on a regular basis. Keeping abreast of these changes is time consuming, but overlooking a change could lead to unwelcome questioning and could ultimately affect the firm’s PI rating.

Technology can help here too and there are online systems available which are integrated into search ordering platforms and provide property lawyers with up to date access to the CML Handbook and different lenders’ requirements. Use of such systems also provides the conveyancer with an audit trail which they can use to prove compliance to a lender and mitigate the associated risk of non-compliance.

It is hard to predict which ‘age’ will follow the information age, but the future of property information within the information age certainly seems to be pointing towards better interpretation of information and results.

As data and experience builds up, we will gain a better understanding of our environment and its potential and, as technology improves and processes are formalised, there will be more opportunity to cross reference results and dig deeper into issues to provide even more intelligence to drive decisions. Technology will also provide search suppliers with the opportunity to personalise the reports they create so that individuals within the transaction will be able to receive information relevant to their needs at the right time.

In this digital age, consumers will continue to be offered direct access to more and more information – without the knowledge and experience to interpret the findings and be sure of the next steps required. Therefore, the responsibility will remain firmly with the property lawyer to stay up to date with current risks and issues, to continue to maintain easy access to the necessary information to be able to respond to the client’s concerns, and to be able to add value to the transaction by highlighting issues that may not have been foreseen by accessing all of the relevant available information and ensuring they are on hand to advise their clients on how best to proceed.

Excellent client service in this area is what will help the individual property lawyer and department to stand out in future. SJ

Ben Harris is the sales and marketing director at TM Group