A recent article in the legal press this week suggests that a new method of online conveyancing would render solicitors redundant. Could this really be the case?
Apparently a Swansea dentist is the first property buyer exchange contracts digitally. The buyer acquired a £700,000 commercial property in an online deal secured by Block Chain Digital Encryption Technology – best known for underpinning the bitcoin virtual currency.
Promoters of the system say it is a way of sharing information such that the data cannot be tampered with and claim it has a potential to remove the need for solicitors in transactions.
There is also a suggestion it could also be used for creating “smart” contracts.
Ease and certainty?
The company carrying out this transaction claim “it is a technology that will bring speed ease and certainty. It makes the process more efficient and removes intermediaries”.
The suggestion then is that it could render redundant the Land Registry as well as the role of solicitors in checking every stage of a transaction. Again the company involved said “solicitors’ main function is to check that the seller owns the property and secondly the title is okay. If you have an irrefutable digital file you don’t need a lawyer to check it so half their jobs are gone”.
If only this were true.
Solicitors do not just look at Land Registry documents and check that they are correct. If these claims were correct solicitors would not be needed now. Everyone would know the Land Registry was accurate and therefore why is a solicitor checking the title at all?
This online system can no more check that the Land Registry title is correct than a photocopier can. If we all knew that the Land Registry’s documents were always correct, solicitors would not need to check them.
How do you know if the title is acceptable to you?
Just as importantly it is not only the title that is checked. The title might be perfectly acceptable to 99% of buyers, but is it acceptable to you? Does the title say that you cannot develop it when you are developer that wants to do it? Does the title say that you cannot erect fences when you would like to have a fence separating you from your neighbours? Does the title stop you doing something that you want to do even if someone else did not want to?
Further, solicitors carry out local authority searches, check planning permissions, carry out mining searches and environmental searches. Solicitors also assist with the finance arrangements by acting for lenders on mortgages.
Certainly new online technology could help by money not having to pass through banks and it may well bring speed, ease and certainty in that regard. It cannot bring any additional certainty in relation to checking a title as is claimed.
Solicitors and conveyancers can perhaps breathe easily for a little longer.