Crime & Law

More solicitor transparency in house-buying legal costs sought by regulator

Property buyers/sellers highly satisfied with solicitor conveyancing services but few shop around - survey

In its report, Indecon, having reviewed comparable international models, concluded Ireland has a 'well-working' conveyancing market. Photograph: Pattanaphong Khuankaew/iStcok

Mary Carolan
Thu Apr 11 2024 - 00:01

The Legal Services Regulatory Authority (LSRA) wants the Minister for Justice to give it powers to require solicitors to be more transparent about the costs of their conveyancing services prior to clients engaging them.

Having commissioned independent expert research on Ireland’s complex conveyancing service, the authority identified enhanced costs transparency as one of three priority areas of reform of the service’s operation.

The other priorities are to increase awareness among consumers to enable them make informed decisions when seeking conveyancing services from solicitors; and digitalisation of the conveyancing system and greater use of technology.

These reforms are “more pressing” than creating a new profession of conveyancer, the Minister is told in a report by the regulator published on Thursday.

READ MORE

The authority also published a detailed expert report by consultants Indecon on the Irish conveyancing system and a national survey by Ipsos concerning consumer use of conveyancing services.

LSRA chief executive Dr Brian Doherty said the “comprehensive” evidence gathered “clearly shows that conveyancing in Ireland is very much a paper-based system in a digital age, and there is not enough transparency in the market to enable consumers to make informed decisions”.

“Our recommended reforms are aimed at bringing about an easier, more efficient and more transparent conveyancing process, whilst also protecting and empowering consumers and promoting enhanced competition,” Dr Doherty said.

In its report, Indecon, having reviewed comparable international models, concluded Ireland has a “well-working” conveyancing market served by a large number of solicitor practices and there are high levels of consumer satisfaction with it.

Noting that almost 61,000 residential property transactions were recorded in 2022, and assuming an average conveyancing fee of €1,800, Indecon estimated total residential conveyancing fees at €109.6 million. While there is a lack of “definitive data” on commercial conveyancing, it estimated commercial conveyancing costs at about €25-30 million a year, possibly higher.

The report identified some issues with the market relating to delays and registration of titles, and said there are inefficiencies in the current system of conveyancing property which are external to how legal services are provided, raising issues wider than that of the introduction of a profession of conveyancer, it said.

Potential issues in introducing a new profession of conveyancer included regulatory costs, the report said. Some risks to consumer protection could be addressed by appropriate regulatory actions, it said.

The Ipsos survey of 100 property buyers and sellers who had used conveyancing services found strong consumer satisfaction – 93 per cent – with services provided by solicitors and what they were charged.

The average time for completion of a conveyance was almost five months and more than half of respondents faced additional issues requiring extra legal services. About half said conducting more of the service online would be beneficial.

The survey found little public transparency about the costs of the services prior to the solicitor being instructed but, once instructed, most users found fees were as stated at the outset. Fees varied, with six-in-10 home buyers and sellers paying between €1,000-€3,000 to their solicitors, excluding stamp duty.

Five per cent looked online for a solicitor with most choosing solicitors they had used before or were recommended.

The regulator has provided the Minister with the survey and reports for consideration of issues concerning the conveyancing system with a view to informing a decision about establishing a conveyancer profession.

In a statement, the Competition and Consumer Protection Commission said it welcomed the reforms proposed by the LSRA but was disappointed the report contained no recommendation or timetable for introduction of a conveyancer profession to end the solicitors’ “monopoly” on conveyancing services and drive competition.

Mary Carolan

Mary Carolan

Mary Carolan is the Legal Affairs Correspondent of the Irish Times

LATEST STORIES