BSA brings in standard instructions

The new year typically heralds several changes in a variety of business areas. One such area to witness change is the conveyancing framework and instructions issued by lenders to solicitors and licensed conveyancers acting for them in property sales.

The Building Societies Association (BSA) will be introducing a new set of mortgage instructions on 1 January 2010. These instructions aim to ensure all BSA members benefit from a complete standard set of conveyancing instructions, which they may not otherwise have. It prevents the need for individual lenders introducing separate instructions for themselves.

Scotland, as you would expect, has its own set of instructions. There are also versions for lending taking place in England & Wales, Northern Ireland, and the Isle of Man. Each version reflects local lending issues and property law in each of these jurisdictions.

The BSA package will provide common instructions for all users, as well as enabling individual lenders to set out their specific requirements (SRs) to reflect their lending practice that conveyancers will need to comply with.

The instructions are being introduced on a voluntary basis and it is for individual building societies to determine, in line with other business decisions, whether they choose to adopt the BSA instructions. Many building societies have chosen to do so from January, though others may opt to use their own or alternative instructions.

More confusion?

The decision to introduce another set of conveyancing instructions will meet some criticism from solicitors and conveyancers as unnecessary and a cause of confusion among practitioners. The BSA understands the concerns practitioners may have; however, in the development of the new instructions it has endeavoured to ensure that there is minimal disruption.

First, there should in practice be little confusion as to which set of instructions should be followed. The lender, whether a building society or not, will clearly set out in their initial contact with the relevant practitioners the basis that they are being instructed upon.

Furthermore, as building societies, and their lending subsidiaries, decide whether and when they adopt the BSA instructions, they should be notifying their solicitors and conveyancers of the change. Similarly, those involved in the conveyancing process, particularly those acting for building societies, will want to check with their lender clients whether they will be affected and familarise themselves with the BSA instructions.

Adoption of the BSA Mortgage Instructions should not have any significant impact as to how practitioners do their job. In preparing any new standard it is essential that building societies, as well as the solicitors and licensed conveyancers instructed by them, should be able to apply the new instructions without substantial changes to procedures and process. The BSA instructions achieve this.

The BSA has also taken this opportunity to make subtle but important improvements in the instructions. The BSA instructions are of the same standard as existing conveyancing instructions available to lenders. However, a benefit of the new set is their streamlined approach.

Though existing instructions used by the industry have, on the whole, served lenders and conveyancers well, over time they have grown and developed into a labyrinth to navigate through. The BSA instructions are simpler, arranged in fewer sections and with fewer sub-headings, making the instructions more user friendly.

Individual lender SRs are also more clearly set out, making them easier to find and understand. The BSA has made efforts to ensure that SRs are presented in a uniform way and adopt common language to help users.

The BSA has engaged with a wide range of relevant stakeholders during the development of these instructions. The Law Society of Scotland and Registers of Scotland have both been in dialogue with the BSA as the framework was finalised. The Royal Institute of Chartered Surveyors has also been consulted on issues affecting valuers.

The instructions will be supported by guidance tools, all of which will be available online from the BSA website.

The BSA Mortgage Instructions will be available in full on the BSA website from 1 January. Further information on the instructions is available from the BSA at www.bsa.org.uk/policy/policyissues/mortgages/bsa_mortgage_instructions .

Amir Ghani is policy adviser, Mortgage Policy Team at the Building Societies Association