The Real Estate Institute of the ACT has come out in favour of the Government’s plan to take away the lawyers’ monopoly over conveyancing.
It said in a submission to the government that there would be benefits to consumers in lower prices, but acknowledged the ACT conveyancing market was highly competitive and the gain would be small.
The general manager of the institute, Bruno Yvanovich, said this week (sept 21, so change to last week if used on sunday) that there was a trade-off for lower fees. This was a reduction in the level of expertise, which would more likely hit the less-experienced first-home buyers would be more likely to use cheaper conveyancers rather than lawyers.
The institute thought real-estate agents should be allowed to do conveyancing. The government’s discussion paper said they should not because of what it said was a conflict of interest.
The conveyancing market is worth about $8.5 million a year in the ACT. Lawyers are the only ones permitted to charge the public for conveyancing. About 14,000 residential conveyances a year are done in the ACT.
The Government’s discussion paper was issued early last month. It came down on the side of ending the lawyers’ monopoly and instituting a TAFE course to train specialist licensed conveyancers.
The ACT Law Society has said the setting up of TAFE courses and a bureaucracy to supervise conveyancers would result in the public being worse off. Training and supervision were already in place for lawyers.
Mr Yvanovich said the Government should look at cutting stamp duty and the problem of gazumping (where a seller refuses to go ahead with a sale in the period leading up to a formal exchange of contracts, preferring to sell at a higher price to someone else).
The institute said it “”does not see any evidence that conveyancing is a price-sensitive service. Rather, buyers and sellers are concerned to get the best quality of service.
“”Deregulation of conveyancing has the potential to offer consumers an improved quality of service because it would enable providers to specialise, rather than having conveyancing as part of a general legal practice.”
Agents had experienced a wide variation in the quality of services offered by solicitors. Some were efficient where conveyancing was a major part of the practice.
“”Others are less efficient and see conveyancing as a minor (and possibly tedious) part of their practice,” the institute said. “”Mere legal qualifications in themselves do not produce good conveyancing solicitors.”
It thought solicitors would still be called upon in cases where special conditions applied or where there was other concurrent business such as wills. But in 80 per cent of cases a straight-forward standard-form contract would apply. Commercial conveyancing should stay with solicitors. (There are less than 300 commercial conveyances a year in the ACT).
The institute submission said real-estate agencies should be allowed to employ a conveyancer. The government paper had offered no evidence of conflicts of interest. It was no different from financial institutions preparing and getting people to sign mortgage documents. Financial institutions should be able to employ conveyancers.
Conveyancers could come under the control of the existing Agents Board. The institute would be happy to contribute to development of a code of ethics for conveyancers.
The institute sought an urgent review of the stamp duty rates, pointing out that rates had not been adjusted enough for inflation. First-home buyers were now being levied at a rate designed for upmarket houses. (Stamp duty on an average house is now about $3000.)
The institute received two or three phone calls a day complaining about gazumping. Something should be done soon. Legislation had been passed in most other places to overcome gazumping.