The ACT Attorney-General’s Department has signalled its intention to end the lawyers’ monopoly over property conveyancing in Canberra.
Letting others do conveyancing “would benefit consumers” it said in an issues paper on conveyancing made public today.
“The Government is committed to improving competition by removing restrictive practices,” it said. ” the opening up of conveyancing services to competition is a significant example of such reform. It is not desirable that the market for conveyancing services remain restricted.”
However, it thought that if non-lawyers did conveyancing they would have to be regulated and licensed.
Lawyers charge between $450 and $1000 to do a conveyance. They add out-of-pocket expenses, like government charges, of about $200. Stamp duty is $2015 for the first $100,000 of the value of the house plus 3.5% for up to the next $200,000 and thereafter 4.5%.
The issues paper said conveyancing in the ACT “”is a straightforward transaction”.
South Australia, Western Australia, the Northern Territory and NSW provide non-lawyer conveyancing.
Conveyancing is an $8.5 million business in Canberra, shared among 444 practising solicitors (less than half of whom doing conveyancing as the bulk of their work).
The issues paper said people could do their own conveyances, “”however, in recent times, there has been no conveyancing kit available”.
In NSW the Law Society had the power to license non-lawyers to do conveyancing. However, it quoted the Australian Consumers’ Association as saying that the Law Society “”existed to protect the vested interests of lawyers” and should not regulate conveyancers.
The NSW system has been criticised as being too restrictive for non-lawyers and in practice retaining the lawyers’ monopoly.
The issues paper canvassed the option of having non-lawyer conveyancers regulated under the ACT Agents Act which now controls real-estate agents, auctioneers, travel agents and the like. It had the provision for fidelity and insurance funds and had powers to audit, inspect, inquire and discipline.
It suggested a two-year part-time TAFE course for conveyancers who could practise after a period of employment with a conveyancer.
It cautioned against real-estate agents being permitted to do conveyances because of a conflict of interest: agents wanted a sale for commission; conveyancers had to look after the interest of buyers.
It said that commercial conveyancing, which comprised only 241 of 14,365 conveyances in 1991-92 would perhaps best be left with the legal profession.
The paper acknowledged that there was less need for non-lawyer conveyancers in the ACT than elsewhere because the Law Society permitted advertising. However, it noted that “”the practice in the local profession is not to advertise competitive services and rates”.
The Law Society opposes non-lawyer conveyancing. It says the ACT has had a very competitive market for some time because the Trade Practices Act has applied here to lawyers since 1974. There have been no scale fees.
The president of the society, Russell Miller, has said it is not a question of protecting lawyers, but of protecting consumers. Many things could go wrong with a conveyance that might not come to light until the house was resold. This could be avoided with professional lawyers, who were trained to foresee the problems, looking at the documents.
Many ACT lawyers have pointed to steeply rising government fees. They say these have done far more to add to house-transaction fees than lawyers’ fees which have remained static because of competition. They say stamp duty has risen almost exponentially and search and registration fees have gone up substantially in the past decade.
On the other hand, consumer concern at the lawyers’ monopoly has been fairly muted because it is usually a once- or twice in-a-lifetime transaction. So the concern about being stung again is not so high as with other consumer transactions.
Comments on the paper can be addressed to the ACT Attorney-General’s Department, GPO Box 158, Canberra ACT 2601.
Another aspect of property transactions is under inquiry by the Prices Surveillance Authority. The PSA is looking at real-estate agents nation-wide. The Trade Practices Commission is also inquiring into the legal profession nationwide and no doubt will look at some aspects of conveyancing in that inquiry.