Scotland split down the middle on 'sep rep' in conveyancing

Opinion has divided almost equally in response to a consultation by the Law Society of Scotland on a proposed separate representation rule in conveyancing.

The society voted in principle to introduce separate representation in March, by ending an exception to the current conflict of interest rules.

The rule change needs the approval of the society's regulatory committee, its council and a special general meeting (SGM), to be held on 23 September.

Alistair Morris, vice president of the Law Society of Scotland, said: "There has been tremendous change within the property market since the financial downturn and as a result many lenders have introduced new requirements on solicitors representing the borrower, which has led to a significant move away from the 'execution only' approach of the past.

"Many solicitors now believe that the interests of the buyer client and their mortgage lender are no longer in alignment so, in order to represent their clients fairly and with true independence, there should be mandatory separate representation in both commercial and residential property transactions.

"It is the buyer who pays the fees and should be able to have absolute confidence and trust that their solicitor will put his or her interests first, rather than those of their mortgage lender who can have different requirements which need to be met."

The society said organisations which responded to the survey were in favour of the change, with almost 60 per cent in favour, but 52.5 per cent of individuals were against.

The society has calculated that separate representation is unlikely to cost purchasers more than 0.1 per cent of the value of their home, based on what lenders are already charging for separate representation.

Based on an average purchase price north of the border of £148,174, this would amount to £200.

"We are well aware of the fears that have been raised around potential for delay or possible increased costs for the borrower," Morris said.

"It's worth noting that, in the Republic of Ireland, where separate representation is mandatory, banks are legally prohibited from passing on their legal fees to purchasers."