The sudden closure of PM Law Group last week has thrown thousands of property transactions into uncertainty after the conveyancing firm stopped trading without warning to staff.
Mortgage Soup reported on Tuesday last week that the firm, which acted for home buyers and sellers across England and Wales, ceased operations on Monday, February 2. Staff were reportedly given no advance notice and are unable to assist affected clients.
The Solicitors Regulation Authority (SRA) has now intervened and taken control of all paper and digital files, along with client and office money held by the firm.
The regulator has launched an investigation into the circumstances surrounding the collapse.
SIGNIFICANT DISRUPTION
While interventions of this kind are rare, the disruption is likely to be significant, particularly for buyers and sellers close to exchange or completion.
Under the SRA’s intervention process, client money is placed into a statutory trust while the regulator works to identify ownership and determine whether funds can be returned or transferred to their intended purpose, such as completing a property purchase.
In cases where money cannot be recovered, clients may apply to the SRA’s compensation fund, subject to eligibility criteria.
The SRA’s appointed intervention agent, Gordons LLP, is contacting clients with urgent or imminent completions as a priority. In exceptional cases where completion is only days away, the agent may act on an emergency basis, although most clients will need to instruct a new conveyancing solicitor to continue their transaction.
HOME BUYING & SELLING COUNCIL
The Home Buying & Selling Council says buyers whose cases had not yet exchanged contracts are likely to face the least disruption, particularly where only limited funds have been paid.
Those who have exchanged and lodged deposits may face weeks of delay while the SRA traces and reconciles funds.
The closure may also affect entire chains.
The closure may also affect entire chains, with transactions stalled while new lawyers are appointed and mortgage funds accounted for.
Remortgage borrowers whose lenders have already released funds are being advised to contact their lender or broker to confirm whether their previous mortgage has been redeemed.
Completed transactions may also be affected if registration at HM Land Registry has not yet been finalised, requiring new legal representation to ensure title is properly recorded.
The Council said it has briefed lenders, estate agents and removal firms to encourage flexibility and patience while the regulator works through what could amount to thousands of affected moves.
The SRA has warned that high call volumes are expected and that urgent cases will be prioritised.
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