Today is the day that CHAPS settlement will be extended by one hour and 40 minutes.
The Clearing House Automated Payment System guarantees same-day payment so long as funds are available by a certain time on a working day. That time, from today, is now 6pm.
The Bank of England expects the direct participants in CHAPS to pass on the full benefits to their customers.
But what this will mean in practice for the home-buying and selling public, estate agents, conveyancers and removal firms remains to be seen.
On the face of it, extending the hours for CHAPS will be a bonus and will allow some completions to possibly take place on the actual day of completion when they previously may have been delayed until the next day.
The most commonly used form of contract used by agents is the Standard Conditions of Sale (fifth edition) which has a printed time of 2pm. That can be varied with the agreement of both sides.
However, the Law Society is not currently proposing to change clause 6.1.2 as it might be viewed as encouraging later completions.
Most contracts do not require completion to take place by a certain time, but merely provide that, where the completion monies arrives after a specified time (the contract says 2pm) they are deemed to have arrived on the next working day.
However, at the moment, provided each set of funds in the chain reaches its destination before bank closing on the day of completion, the 2pm deadline is unlikely to be enforced.
Let’s assume a firm sends the completion monies late in the day (or the delivery of the funds is delayed for some reason) and they arrive at 5.15pm but the conveyancer has closed up and gone home.
Despite the purchaser’s and estate agent’s protestations, the keys won’t be released.
Currently, assuming most conveyancers work until 5pm, completion funds arriving at 4.45pm would normally allow completion to take place, albeit late. However, from today, although funds might now arrive at 5.45 pm, if the seller’s conveyancer has departed, completion will be deemed to have taken place the next day.
This looks to me like a can of worms that has just been prised open.
On top of the issues that conveyancers might have with this situation, we also have to consider the issues that estate agents and removal firms (who both tend to work later) might encounter. They could be far more distressing and frequent.
Will the public and estate agents end up preferring to instruct and work with conveyancers who are prepared to extend their working hours to line up with the new CHAPS times, or will nothing really change?
As the days, weeks and months go by, I would be interested in hearing from you as to how this change has impacted on you, your clients, plus your removal and your conveyancer contacts.
If I gather enough information, I will prepare a report/summary for EYE to publish in due course. Please send any thoughts or comments to rh@boldgroup.co.uk
Comments (15)
The email below has been received by one of my member firms:
“Chaps Co has extended the settlement day for CHAPS, the UK’s high value payment system for same day electronic funds transfer, by 100 minutes for direct participants, for example: banks and building societies.
Lloyds Banking Group is reflecting the revised operational hours as fully as possible in our own operations in order to extend the benefits to customers, and give customers greater choice and convenience when making a critical or high value sterling payment, for example: mortgage advance payments.
As a result of this, Lloyds Banking Group will now send CHAPS payment instructions for mortgage advance payments by 4.40pm – rather than by the previous cut-off time of 3.00pm – for arrival in solicitors’ accounts by close of business on the same working day. This will apply to payments made on behalf of Halifax, Lloyds, Bank of Scotland and Birmingham Midshires customers.”
Looks great if the day before completion, but not on the day itself.
@smile please
You are without doubt, from my own eighteen years experience, absolutely spot on.
@Rob Hailstone
We too have the misfortune to deal with a vast majority that just do not share our passion to see the job through. I can name operatives within firms that treat clients with total disdain. It’s incomprehensible to me as a service provider why others do not share the service vision.
Yes without doubt, as in any profession, there are those solicitors that go the extra mile around us. I can vouch for one that I have corresponded with before 6am! We of course refer, but only ever to one particular person in a firm WITHOUT KICKBACK because we know he will call us and importantly, respond to his own clients, when things start going out of shape. That’s all we want, for the benefit of the client.
Appalling agents? Absolutely but that’s not the issue on the table. Solicitors and conveyancers are long overdue the need to start shining. In my view, those that don’t are only in it for the fee that they will earn regardless of whether their client secures the property or not. Hardly the right attitude.
With all due respect smile, I think we all know that the speed of some transactions is a major issue with the public.
I agree that one solution is that fees could be increased along with staffing levels. However, as agents are normally the first foot through the door they would have to be the ones prepared to recommend the more expensive firms and not increase referral fees.
I’m not sure your £150.00 increase per case stacks up. Surely, that depends on volumes and set up and running costs etc. Seems like a finger in the air guess to me.
I think you are missing the point that constant interruptions stop conveyancers progressing the legal work. Extending the hours that they are seen to be open would not really help and as I have said, many already work evenings and over a weekend. Conveyancers would like nothing more than reasonable hours and fair fees. I don’t know any that delay transactions for fun.
We will have to wait and see what the Governments, A better deal: boosting competition for families and firms, brings us!
Anyway, back to CHAPS. Let’s see what happens over the coming weeks.
One final point. I don’t actually vouch for my member firms (although most are great), just make sure they are as up to date, well informed and protected against frauds and scams as I can.
Rob,
i honestly think your heart is in the right place, but for someone that is at the coalface i can tell you its not what you think it is.
The figures i am basing the £150 on are on the volume of sales my office agree per week. If my offices are agreeing at least 5 deals a week it stands to reason there are at least 5 (possible 10 with a sale / purchase) instructions a solicitors could gain. this gives circa 3k per month extra to a firm that could pay for a good member of staff.
This member of staff could then be taken on a new contract to other members within the firm and their hours are 5 days a week (including Saturdays) working 8.45am – 6pm. They can be trained how to deal with clients and agents to give MEANINGFUL updates thus relieving the solicitor having to do so freeing their time to crack on.
Over time all new members of staff are placed onto this contract, over a few years this becomes the norm and the silly hours that are kept go the way of the dinosaurs.
As for the public, yes they can be slow but to be honest are they chased enough from the solicitor, do they truly understand what is needed from them? More staff to HELP clients, couple with working hours that fit with today’s society would go a long way to sorting this.
i Saw an article (may even have been from you) over 50% of movers take the recommendation the agent offers. Do you ever hear that you are too expensive? Its not really an issue. Round my way average legal fee for a freehold is £600 plus vat – Why not increase the fee to £800? Yes bit more expensive but as has been pointed out over 50% of transactions are by way of referral by the agent. If the agent knows they will get a better service why would they not offer this?
I like many others can give this advice on what would make the process smoother, but complete denial is the issue and why in the 20 odd years i have been involved in agency things have only got worse not better in the conveyancing process.
I know why don’t we have all the conveyancing done when the property is put on the market we could call it a home information pack. Then when we sell the property the buyers just simply exchange.
Now what could possibly go wrong with that idea?
Answers on a postcard to:
Stupid Idea
BBC
etc
Got to comment on this one…..
Harsh to brandish all solicitors as “not hardworking” many I know are in from 6am and well past 6pm – and to be fair some of the work they have to get through for a fraction of the Estate Agents fee is astonishing in comparison to what the Estate Agent might have to do.
Most solicitors around me and certainly the longer standing family firms who have not sold out or merged to many times are superb and real problem solvers, working with us rather than against us.
A few horrors out there too, but then a few horror EA’s also!
Ric,
I am not saying the majority are not hard working i am saying the workload they have, the resources they use and the hours they keep are not in line with what is needed today in 2016.
You must work in a highly motivated area as not a single solicitor in the 25 mile radius we cover are in at 6am as far as i know.
And even if they are that just shows they need to increase fees and invest in more staff.
Does your office Secretary come in at 6am to type details up because they do not have time in the day? – Course not. You have to staff your offices to get the most out the day without losing money. You charge a fee to cover the running costs of your offices and give you a healthy profit, you also offer advice and viewings after 5.30pm when most of the public are available. You also have cover in an office at lunchtime so your firm does not close. You are also open 6 or 7 days a week not 5. Do you do this because you are just a great guy, no you do this because it what is needed in 2016.
If solictors just put up their legal fee by £150 per case they would have more than enough extra income to pay for at least one additional member of staff. Which in turn could be used to open later hours or offer weekend service.
My response to smile please:
No offence but comments like that show how out of touch you and estate agents really are.
John,
Feel free to expand.
Are solicitors offering a service that you and your clients find acceptable?
How long is the average time taken from sale agreed to completion?
I accept that different pockets of the UK have different firms but my experience is that in the most solicitors can do a far better job then they currently offer.
If you are the person i think you are, you have multi office sites and multiple members of staff. You have invested in what the market dictates and moved with what is needed and responded otherwise you have been left behind.
If you opened at 9am closed at 5pm with just 2 people working in an office trying to service 30 vendors looking to sell / rent and chase existing sales through to completion. Photographing properties, measuring properties, advertising, putting properties on the system. Conducting viewings etc – You would not be fit for purpose so why do solicitors basically do all of the above?
The problem is solicitors are not forward thinking, they use an antiquated format to deal with the process, because others have not changed their system they see no reason to change theirs.
This is evidence above in that to help with the timescales chaps deadline has been extended but as Rob points out solicitors will not be there so makes no difference.
I didn’t say solicitors won’t be there, I questioned as to whether they would or not. In fact, I doubt whether many solicitors or conveyancers have actually left their offices before 6.00 pm.
To be honest makes little difference as how many properties are exchanged and completed same day.
Its nice to see though that some people understand the time taken is stupidly slow and trying to do something to move it along.
But to be honest this is a plaster over a gaping wound reaction.
I get the impression smile please that you have no idea of the large number of conveyancers who work long additional hours, ‘behind the scenes’.
I receive many emails from working conveyancers, early in the morning, evenings and weekends. These are the only times they can concentrate on the ‘legal work’ without being interrupted.
Rob,
No offence but comments like that show how out of touch you and conveyancers really are. The biggest complaint from property professionals and movers is the time it takes to complete once a sale has been agree.
I appreciate that there are many factors that can effect this but the biggest by far is the attitude and work rate of conveyancers.
If conveyancers cannot get work done in a timely manner and having to work outside their normal working hours (these people are few and far between). Then they need to look at their infrastructure and invest in either staff or tech that helps them offer a better service.
If a conveyancer has 30 cases on their desk and share 1 person for admin support that is the fault of them and their company. It is easily rectified by taking on another conveyancer or more admin support.
Of course your argument will be “Well that means costs go up” – Well nobody i speak to worries about cost at the moment so why not increase it and offer a service.
I will not embarrass you or your firms Rob but 1 of your affiliates works in my patch and the are notorious for being slow. In fact i have clients that go in and see them and at times the solicitor is not at the desk and nobody knows where they are! (this is quite often happening).
Why not open 8.30am close at 6.30pm (in line with clients needs, estate agents and movers) loose the hour for lunch, straight away that gives you another working day in the week, given the chaps deadline has been extended would make sense to make this the ‘norm’
We could even look at why solicitors need Saturdays off. If the practice was staffed as it should be they would be able to open Saturdays and give updates, and take signatures, help clients fill in your confusing paperwork.
But hey there is no problem, keep burying your heads in the sand ….. Of course its the fault of an estate agent chasing a commission (tongue in cheek nothing further than the truth).
Our conveyancing system is antiquated, deeply flawed and requires a total re-write. It will never happen but, we can dream.
In other words because conveyancers are too lazy to work past 5pm it will not make a difference.
As I have said many times attitudes of conveyancers need to change to get in line of what their clients and other property professionals expect.