Mortgage Soup reported on Tuesday last week how the PM Law Group, which handled conveyancing for home buyers and sellers, suddenly closed the day before.
Property Soup’s sister title revealed how hundreds and maybe thousands of borrowers had been left high and dry after a Cumbria law firm ceased trading citing unspecified regulatory issues and leaving property transactions across the country in limbo.
Now The Home Buying & Selling Council has published a guide for buyers and sellers impacted by the closure of PM LAW Group.
PM Law is now being investigated by its regulator, the Solicitors Regulation Authority (SRA).
PM LAW GROUP BUYER AND SELLER GUIDE
The guide below explains what has happened and what buyers and sellers can do next.
What has happened?
- PM Law Group has stopped trading.
- Staff do not know why the firm closed and through no fault of their own are unable to help clients.
- The SRA has stepped in to take control of:
- All paper files, for both live cases and those that have completed but still need registering
- All digital files
- Any client money held by the firm, and the firm’s office money
This is called an intervention and is designed to protect the public.
Who should you contact now?
For anyone who was using PM Law Group:
- For more information about what you can do and who to contact, visit: https://www.sra.org.uk/news/news/pm-law-clients/ and https://www.gordonsllp.com/pmlaw/
- The SRA, working with its intervention agent (another solicitor firm contracted to carry out work on this issue) will:
- Help you access your paperwork
- Work out what has happened to any money you paid
- Decide whether funds can be refunded or paid on to their original purpose (for example, a lender or a property purchase)
This process will take time, but it is the safest way to sort things out properly.
The intervention agents will prioritise trying to identify and contact clients with the most urgent or imminent matters. Where such cases are identified, they will attempt to contact clients to advise of the need to instruct another conveyancing lawyer to progress the work.
In some exceptional circumstances where there is no time for this to happen — for example if a client is due to complete on a house sale or purchase within a few days of the intervention—the intervention agent may, at their discretion, be able to act on the clients behalf on an emergency basis.
What happens to my money?
Any money in the firm’s bank accounts at the time of intervention will be held by the SRA in its Statutory Trust Fund while it finds out who it belongs to. Once it has completed that process, it will look to return money to its owners.
If a solicitor/conveyancer was holding your money and the SRA is not able to return it to you, for example if it has gone missing, you may be able to make an application to its compensation fund. This is a discretionary fund with set criteria for making a claim and the SRA will need to prioritise dealing with urgent claims soonest.
Contacting the intervention agents
The intervention agent has posted further information on its website here: https://www.gordonsllp.com/pmlaw/
If you need to make urgent contact with the agent, please use the following details:
Telephone 0113 227 0368
Email PM@gordonsllp.com
What buyers and sellers can do – four common situations
The Home Buying and Selling Council has identified four likely scenarios. Here is what each means and what can be done next.
- New instructions or cases that had not exchanged contracts
In most cases:
- No money will have been paid, or
- Only a small amount,
What to do:
- Gather any emails, letters or documents you already have.
- Find a new conveyancing lawyer and explain what has happened.
- If money is owed (for example, for searches), you can make a claim through the SRA, but this will take time so if you can afford to, do not wait for the money to be returned to proceed with your sale or purchase.
Helpful tip:
If you know which search company was used, contact them directly. They may be able to provide your new conveyancing lawyer with the searches if they have already been progressed and paid for.
- Cases close to exchange, or already exchanged, with deposit money paid
This is understandably very upsetting.
- At the moment, this money cannot be accessed
- The SRA must first identify your file and identify the funds.
- Please be prepared; this could take weeks or longer.
If you are badly affected, contact the SRA as soon as you can so they can prioritise urgent cases, however, they are trying to proactively identify cases close to completion and may contact you.
- You are in a chain with someone using PM Law Group
If someone else in your chain used PM Law Group:
- They may need time to appoint a new conveyancing lawyer
- Other conveyancers in the chain may be able to help by sharing information already received
If money has been paid or a mortgage has been released, everyone involved may need to be patient while the SRA traces the funds. This could take weeks or longer.
For sellers:
If you cannot wait indefinitely, speak to your agent about your options. There is a balance between giving the SRA and a buyer time to resolve the issues and restarting the sale.
- Remortgages where funds were released by your new lender but completion hasn’t happened
If this applies to you:
- Speak to your broker and/or lender
- They can confirm:
- Whether your old mortgage has been paid off
- Whether you could temporarily be paying two mortgages
If you have already completed but the property may not be registered
If your sale or purchase has completed:
- Check whether the property is registered with HM Land Registry in the new owner’s name or there is a pending application that has been lodged but not completed
- If the property isn’t registered in the new owners name and there is no application pending:
- You will need to instruct a new conveyancing lawyer to deal with the registration
- Registration is a legal requirement
If HMLR have received an application but it has not been completed yet:
- Instruct a new lawyer and ensure the contact details on the application are amended at HMLR to your new lawyers details
- It is common for HMLR to raise a query on an application so it is important that you still have access to legal advice and HMLR have the right contact details
Wider support and reassurance
The Home Buying and Selling Council has:
- Briefed key home moving organisations from lenders through to removal companies
- Asked them to be understanding and patient with affected buyers and sellers
If an agent, buyer, seller or lender/broker is not aware of what’s happened, please do send them this information.
The SRA is working as quickly as possible, but:
- Thousands of moves may be initially affected
- The SRA will be receiving a very high number of calls
- Urgent cases will be prioritised where possible
The Home Buying & Selling Council says: “We understand that this will be distressing for everyone involved, but a process is in place to move forward with your move, and we have asked everyone to do their best to help you.”
