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Land Registry Transfer of Local Land Charges The Consultation

Subject: Blog Posts

Description: The house buyer will ultimately benefit from reduced conveyancing costs, standardisation and turnaround times but is the land registry becoming the ultimate search provider the only way to achieve this?


submit to reddit Posted by David Caldwell on 17/01/14 at 19:32

Land Registry Local Land Charges Consultation

 

An eight week public consultation has started on the Land Registry widening its powers and becoming the sole registering authority for local land charges and the provider of searches of the register.

 

Why it has been reduced from the standard 12 weeks to eight has not been explained.

Local Land Charges

The scope of the consultation centres on the provision of the Local Land Charges public task that is currently undertaken 348 local councils in England and Wales.

There will be a further consultation regarding the delivery of Con29 information.

The project was instigated by LRAC (land registry advisory council) after they identified a lack of consistency and standardisation in the market It also supports the government’s digital by default and transparency policies. 

Number 10 hopes that it will also boost the UKs rating in the World Bank Report.

It could also be used to clear up the mess surrounding EIR.

Failing Market 

Land registry sees the property search sector as a failing market which cannot achieve economic efficiency and requires government intervention. 

Transfer

The transfer of the local land charges function to the Land Registry will be a gradual and most likely be done monthly county by county starting from October this year (2014) and conclude as early as April 2016.

Transferring the function would require a change to section 3 of the Local Land Charges Act 1975, but not the Land Registration Act 2002

The land registry anticipate that only 57% of searches will be able to be done automatically which introduces doubt that the land registry can take on the LLC with existing staffing levels.

The Con29 questionnaire will remain with the local authority however it will be requested by and returned to the land registry either via a terminal similar to Norway’s ‘infoland ‘ for councils with manual records or an interface module for those more automated.

Revenue sharing is being explored as an incentive to digitise with the more computerised councils receiving more income.

Local authorities will still be liable for incorrect search results and will continue to pay for insurance cover 

But what obligation are LAs under to hold and collect Con29 information? 

Redundancies 

There is an average of 2.4 FTEs (full time equivalents) in local land charges departments across 348 different councils.  This equates to roughly 850 jobs that are now at risk of redundancy.  The average cost of redundancy is around £11,000 which results in costs to the tax payer of £1,000,000.  But who will pay for redundancies?  The land registry says this is a transfer of administrative functions and exempt from TUPE so the councils may have to foot the bill.

Fees will remain VAT exempt and will be reduced to only £12 for a LLC1 search until 2015/16 when it will be reduced down to a bargain basement £5.

The effect is obvious for the staff in land charges departments but what is the cost to the wider economy? 

Personal Search Companies

LLC data will be available to access remotely free of charge however Con29 data will still need to be sourced by visiting a local authority, the majority of this will be relating to building control, planning policies and planning histories. 

There may be opportunities as companies will no longer be tied to a single geographical area and be free to expand nationwide. 

On the other hand reduced fees for property searches provided by the land registry will be difficult to compete with.  

The land registry is forecasting a decline in VAT and Corporation Tax being collected by the treasury as the industry runs into difficulty.

Service providers who act as a single point of contact for sourcing property searches will also go to the wall as the Land Registry realises its ambition to become the ultimate one stop shop for conveyancers. 

Solicitors and Conveyancers

It is anticipated that conveyancers will obtain their searches directly from the land registry, but will they be able to advise their clients based on the proposed 15 years of notices when many obligation have a shelf life of nearly seventy years  (for example agricultural ties)? 

Self-Conveyancing

It is possible that you can exchange without the use of a conveyancer as the general public will have easy access to land registry e-channels.

Is it Legal?

A recent freedom of information request submitted to the Office of Fair Trading reveals that during recent discussions with the land registry it was highlighted that the land registry must conform with the Competition Act  1998 and in particular those relating to the abuse of a dominant position. 

However the land registry believes that its market share would be too large would be exempt from the act.

Conclusion

While it is easy to be critical of the proposal particularly if you are an affected party it is important to recognise the benefits as well. 

More public data will be available and no doubt new applications and market models will emerge. 

The house buyer will ultimately benefit from reduced conveyancing costs, standardisation and turnaround times but is the land registry becoming the ultimate search provider the only way to achieve this?

Keywords: land registry, local land charges, consultation, takeover, redundencies




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