About CQS Conveyancing

The High Street Practitioner’s Guide to Surviving the FCA

noreply@blogger.com (Simon Seaton) — Sat, 20 Dec 2025 19:44:00 +0000

For a sole practitioner or the MLRO in a small high-street firm, "AML compliance" often feels like just another mountain of paperwork standing between you and your actual work. When you are juggling a heavy conveyancing caseload, a sensitive probate matter, and the day-to-day survival of your practice, the last thing you need is a new regulator with a reputation for being data-heavy and "zero-tolerance."

But the ground is shifting. As the Financial Conduct Authority (FCA) takes over AML supervision from the SRA, the "high-street way" of doing things—relying on long-standing local reputations and gut instinct—is being replaced by a requirement for hard, documented proof.

The end of "I’ve known them for years"

In a small town, you often act for the same families for generations. You know their business, their parents, and their reputation. Under the old mindset, that felt like enough. Under the FCA, it isn’t.

The FCA supervises on evidence, not relationships. The FCA AML auditor won’t care that a client is a pillar of the community; they will care whether you documented a Source of Wealth check that explains how that community pillar actually acquired their funds. For a busy practitioner, this means the "mental note" must become a digital or paper trail. If it isn't written down, it didn't happen.

Moving past the "Tick-Box" trap

Many small firms use generic AML templates to save time. It’s understandable—you don’t have a dedicated compliance department to draft bespoke manuals. However, the FCA is famously allergic to "copy-paste" compliance.

Your Firm-Wide Risk Assessment needs to smell like your office. If you do 80% conveyancing, your FWRA shouldn't look like it belongs to a firm with a completely different profile. It needs to address the specific struggles you face: high-volume property flips, "gifted deposits" from overseas relatives, or the sudden appearance of cash in a probate estate. The FCA wants to see that you’ve actually thought about the specific risks walking through your door.

The "Sole Practitioner" burden

If you are a sole practitioner, you are the fee-earner, the manager, and now, the person the FCA holds personally accountable. There is no "compliance team" to hide behind.

The struggle here is capacity. The FCA expects the person in charge to have a "defensible" reason for every decision:

The SARs Dilemma: Filing a Suspicious Activity Report (SAR) on a long-term client feels like a betrayal; not filing one is a regulatory landmine. The FCA expects a recorded "reason why not" if you decide a red flag was a false alarm.
Ongoing Monitoring: It’s easy to check ID at the start. It’s much harder to notice when a matter starts drifting off-course six months later. The new expectation is active oversight throughout the life of the file.

Making it work on a high-street budget

The shift to FCA supervision likely means more data requests and more formal inspections. You don’t need a six-figure software suite, but you do need a system that works while you’re busy:

Document the "Why": When you decide a client is low-risk, write one sentence explaining why Do you hvae good technology or a way of recording client matter risk assessments.
Standardise the "Hard" Questions: Make asking for bank statements a standard part of your Terms of Business so it’s a firm-wide rule, not a personal judgment call.
Protect Your Time: Use the transition to tighten onboarding. A little extra time spent verifying source of funds at the start can save weeks of stress during a regulatory audit later.

The transition to the FCA is a "professionalisation" of AML. It’s a move away from the informal toward the deliberate. For the high-street firm, the goal isn't to become a corporate giant—it's to ensure that when the regulator knocks, you can show them a practice that is as disciplined as it is dedicated to AML compliance.

Paperwork is not a shield: Why your SRA aml audit demands more than just a dusty manual

noreply@blogger.com (Simon Seaton) — Fri, 19 Dec 2025 13:29:00 +0000

The Solicitors Regulation Authority continues its aggressive crackdown on financial crime with a recent fine issued against Whiteheads Solicitors (Staffordshire) Ltd. This decision serves as a stark reminder that the regulator is looking far beyond simple paperwork during an SRA aml audit.

The firm was fined 2,584 GBP plus 600 GBP in costs following an investigation into its compliance with the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017. While the firm had a firm-wide risk assessment and general policies in place, the SRA identified critical failures at the matter level.

Key compliance failures included:

Failure to conduct adequate client and matter risk assessments. The SRA found a consistent pattern where the firm failed to sufficiently assess client matter risk levels as required by Regulation 28.

Inadequate scrutiny of source of funds. In one specific property transaction, the firm failed to properly investigate the origin of funds provided by a third party, despite having access to savings account statements that should have triggered further inquiry.

Lack of AML documentation. The regulator emphasized that policies alone are insufficient if they are not applied to individual files.

This case highlights a common pitfall during an SRA aml audit: the gap between firm-wide policy and file-level execution. Even though the firm cooperated and the impact was deemed low because they had foundational AML policy documents, the SRA still applied a penalty due to the nature of the misconduct.

For law firms, the message is clear. Having an AML policy on the shelf is not enough. You must demonstrate that every client and matter undergoes rigorous scrutiny and that your CMRAs are active, documented, and accurate. The SRA is increasingly using desk-based reviews and proactive audits to find these gaps, and as this decision shows, they will not hesitate to issue financial sanctions for systemic oversight.

FCA AML Audit: The SRA Is Out, the FCA Is In

noreply@blogger.com (Simon Seaton) — Fri, 19 Dec 2025 08:21:00 +0000

For years, law firms prepared for AML scrutiny with one regulator in mind: the SRA. That era is over.

The UK Government has confirmed a fundamental shift in supervision. AML and counter-terrorist financing oversight is moving from the SRA to the Financial Conduct Authority (FCA).

This is not a cosmetic change. It is a full regulatory reset.

If your firm is still thinking in terms of an internal review, an FCA AML audit will feel very different, financially, operationally, and reputationally.

What Makes an FCA AML Audit Different

The SRA regulates professional standards. The FCA enforces financial crime controls. That distinction matters.

An FCA AML audit is not designed to guide or educate. It is designed to assess risk to the financial system and determine whether enforcement action is required.

This is precisely why firms can no longer rely on internal reviews alone. An FCA AML audit will expect to see independent challenge, most commonly through a Regulation 21 independent AML audit.

For most firms, a Regulation 21 independent AML audit represents the best return on investment in preparing for FCA scrutiny. It delivers the maximum regulatory assurance for the least disruption, cost, and management time.

Firms should expect:

far deeper information requests
formal interviews and compelled responses
tight regulatory deadlines
outcomes driven by deterrence, not improvement

This is the same regulator that fines banks at scale. Law firms are entering that world.

The End of the Soft-Touch AML Era

Historically, SRA AML supervision has focused on remediation. The FCA’s mindset is different. During an FCA AML audit, good intentions carry little weight. What matters is evidence.

Investigators will focus on:

quality of risk assessments
source of funds and source of wealth controls
ongoing monitoring of clients and matters
whether AML policies actually operate in practice

In this environment, a Regulation 21 independent AML audit moves from best practice to baseline expectation. It is also the most efficient way for firms to identify and fix issues before an FCA AML audit does it for them.

Reputation Risk During an FCA AML Audit

Many law firms underestimate how exposed they are reputationally. The FCA uses publicity as a regulatory tool. Even without a formal approach to naming and shaming, FCA Warning Notices, Decision Notices, and Final Notices attract national media attention.

An FCA AML audit can move from a regulatory process to a public issue rapidly. Firms that can point to a recent Regulation 21 independent AML audit are in a far stronger position to reassure clients, lenders, and counterparties when scrutiny intensifies.

Why Early FCA AML Audits Will Be High Profile

New regulatory regimes need visible enforcement. The FCA will want to demonstrate authority over the legal sector early. Firms with higher-risk work, historic compliance gaps, or previously fined firms by the SRA are likely to be prioritised.

One of the first questions investigators will ask is whether the firm has commissioned a Regulation 21 independent AML audit, and what action was taken as a result. No firm wants to become the first high-profile case study in the legal sector.

Double Jeopardy: FCA and SRA at the Same Time

The SRA is not disappearing. While the FCA will oversee AML systems and controls, the SRA will continue to regulate solicitor conduct and discipline individuals. This creates the real possibility of parallel investigations.

A firm could face an FCA AML audit at organisational level while partners, MLROs, or COLPs face personal scrutiny from the SRA. In both scenarios, a Regulation 21 independent AML audit is one of the clearest ways to evidence governance, oversight, and reasonable steps.

Powers Law Firms Are Not Used To

The Treasury consultation indicates the FCA will be given significant authority. Proposals include powers to intervene in firm ownership and control structures, including forcing changes where individuals are linked to financial crime concerns.

Under this level of scrutiny, regulators will expect firms to evidence not just compliance activity, but independent testing of AML systems. A Regulation 21 independent AML audit remains the most proportionate and cost-effective way to do that.

Preparing for an FCA AML Audit Now

The consultation closes on 24 December, with legislation expected to follow. Firms that wait for formal transition will be too late. Key questions firms should be asking now:

would our AML framework withstand enforcement-led scrutiny
can we respond quickly to compulsory information notices
do we have a current Regulation 21 independent AML audit
do partners understand their personal exposure
do we have a strategy if an FCA notice becomes public

Practical steps to take:

commission or refresh a Regulation 21 independent AML audit
stress-test AML systems, not just written AML policies
rebuild and evidence audit trails
review historic SRA audit outocmes with transition in mind
plan for crisis communications as part of AML governance

The Bottom Line

An FCA AML audit will be tougher, faster, and far more public than anything most law firms have experienced. For firms looking for the highest return on limited time and budget, a Regulation 21 independent AML audit remains the best way to prepare for FCA scrutiny.

Firms that prepare now will control the narrative. Firms that wait will be reacting under pressure. If you are concerned about your firm’s readiness for an FCA AML audit, the time to act is before the FCA makes contact, not after.

How Often Should Your Firm Conduct an Independent AML Audit?

noreply@blogger.com (Simon Seaton) — Thu, 18 Dec 2025 16:14:00 +0000

In the world of AML compliance, there is a significant difference between doing your work and proving that your work is effective.

Anti-Money Laundering (AML) compliance is no longer a "set it and forget it" task. For firms regulated under the Money Laundering Regulations (MLR 2017), the requirement for an independent AML audit is a critical hurdle. But a common question persists among MLROs and Compliance Officers: How often do we actually need to do this?

1. The Regulatory Starting Point: "When Appropriate"

The law (specifically Regulation 21 of the MLR 2017) states that a relevant person must establish an independent audit function "where appropriate, with regard to the size and nature of its business."

While the legislation doesn’t give a hard calendar date, the consensus among regulators—including the SRA and the Legal Sector Affinity Group (LSAG)—is that for most firms, an audit should be conducted at least every 2 years.

        "Compliance is not just about having a policy; it is about demonstrating that the policy works in practice."
    

2. Factors That Shorten the Clock (The 12-Month Rule)

For many law firms, waiting two years is too risky. You should consider an annual (12-month) audit cycle if any of the following apply:

High-Volume Conveyancing: If your firm handles property transactions, you are in a high-risk category. The speed of these transactions means a small systemic error can lead to a massive failure quickly.
High Staff Turnover: Significant changes in fee-earners can lead to a "culture drift." An AML audit ensures new starters are following procedures correctly.
Previous Regulatory Issues: If you have previously received a "letter of advice" or "compliance plan" from the SRA, an annual audit is your best evidence of remediation. In reality many firms take the view 'we have had a SRA AML audit so we have taken the hit and are safe for a while now'

3. Trigger-Based AML Audits (The "Change" Rule)

Outside of your regular schedule, certain events should trigger an immediate independent AML audit:

Technology Shifts: If you have recently implemented new Digital ID (eIDV) software, you need an audit to ensure the tech maps to your Firm-Wide Risk Assessment (FWRA).
Mergers and Acquisitions: If you have taken over another firm, you have inherited their risk. An independent audit is essential to "level the set."

4. Why "Internal" Isn’t Always "Independent"

A common mistake is thinking that the MLRO checking files counts as an independent audit. To satisfy a regulator (SRA or FCA), the AML auditor must be objective. They cannot be the person who wrote the AML policies or the person who oversees the daily AML checks.

The Bottom Line

Small, low-risk firms: Every 2 years (minimum).
Medium-to-large or high-risk firms: Every 12 to 18 months.
Firms in a growth phase: Annually.

Is your firm due for a check-up? Don't wait for a SRA AML Audit or FCA AML Audit to find out where your gaps are. Professional independent AML audits provide the "Safe Harbour" you need to operate with confidence.

The December 2025 AML Crackdown: Is Your Firm Next?

noreply@blogger.com (Simon Seaton) — Thu, 18 Dec 2025 15:40:00 +0000

The first half of December 2025 sent a blunt warning to the legal profession: the SRA will not accept poor AML compliance. A number of enforcement actions has resulted in thousands of pounds in fines for technical failings. In short, you don’t have to launder cash to be penalised—poor record-keeping will do the job.

The Case Files: December Enforcement

West Yorkshire (Mirfield) | Published: Dec 1, 2025. The firm was fined £6,236 for a seven-year gap in Firm-Wide Risk Assessments. The SRA cited a persistent disregard for statutory obligations, noting the firm failed to maintain compliant AML policies since 2017.
Manchester (Swinton) | Published: Dec 10, 2025. The practice was fined £19,013 following an inspection that found systemic failures in internal AML controls. While the firm had AML policies on paper, they were not being applied effectively at the client matter risk assessment level.
Gloucestershire (Stonehouse) | Published: Dec 11, 2025.A fine for £8,426 for failing to conduct Client and Matter Risk Assessments on the majority of files reviewed. The firm was found to be using a generic template that did not address the specific risks of their practice.
Oldham (Lancashire) | Published: Dec 11, 2025.A firm was hit with a fine of £11,271 for failing to establish and maintain fully compliant policies and controls over an eight-year period. The SRA noted that the absence of these controls created a potential for harm to the public interest.
Surrey (Reigate) | Published: Dec 12, 2025. £2,987 fine for failing to update AML policies and FWRA between 2017 and 2025. Although the firm admitted the breaches early, the SRA emphasised that compliance documents must remain current to be effective.
The AML Reality Check: It is Strict Liability Now

The SRA are looking for firms unprepared. Nearly every fine this month was triggered by three core failures:
- Missing or incomplete Firm-Wide Risk Assessments (FWRA).
- Reliance on generic templates that were not tailored to the firm's specific work.
- Outdated AML policies that had not been reviewed or updated for several years.
The Verdict: If your FWRA is gathering dust or your Client Matter Risk Assessments are one-size-fits-all, you are sitting on a regulatory time bomb.

Is your firm SRA AML audit-ready? These cases prove that the SRA is shifting from checking for existence to testing for effectiveness. Proactive compliance is now the only way to avoid the crackdown trend.

AML Audit Case Study - A Conveyancing CQS Frim

noreply@blogger.com (Simon Seaton) — Thu, 18 Dec 2025 15:14:00 +0000

During a desktop SRA AML audit the legal regulator help the practice to be non-compliant. This was due to the absence of a firmwide risk assessment and an updated AML policy and procedure, insufficient relevent staff training on AML, and the MLRO failing to have completed enhanced AML training.

The SRA sent written notice, providing two weeks to rectify the mentioned deficiencies. Failure to do so would result in disciplinary measures and perhaps fines.

Within the specified period, the law firm addressed the issues by submitting a compliant AML policy, an AML firmwide risk assessment, and PCPs as well as AML training for both the MLRO and relevant staff members.

AML Firm-wide Risk Assessment: No1 Document

noreply@blogger.com (Simon Seaton) — Thu, 18 Dec 2025 15:03:00 +0000

The foundational document when is comes to AML compliance is the AML firm-wide risk assessment. It is often described as the keystone of money laundering compliance in a law firms. Once a well drafted AML firm-wide risk assessment (FWRA) is in place the remainder your AML policies and procedures, training and due diligence will flow from it.

The Focus of the FWRA

The Money Laundering Regulations 2017 sets out five key areas for the FWRA to focus on:

Clients
Geographic areas
Products and services
Transactions
Delivery channels

However, there are many other elements that need to be considered. Regulation 18A of the money laundering regulations also requires firms to identify the risk of proliferation financing. This can either be considered separately or within the AML firm-wide risk assessment. Further guidance on how to carry out a proliferation financing risk assessment can be found in the Legal Sector Affinity Group (LSAG) guidance.

Common Pitfalls

I have been told by some of the AML assessors in Lexsure's Independent AML audit team that that most firms now have a firm wide risk assessment in place. That said, they say that to find a significant proportion of firm wide risk assessments which would fall short of the expectations of the SRA.

The requirement to have a firm wide risk assessment has now been in force since 2017. The purpose of a firm wide risk assessment is help identify the risks a firm is or could be exposed to, and the measures which should then be put in place to help mitigate the firms' exposure to financial crime. It is a crucial step in being able to prevent money laundering.

SRA Enforcement

The SRA have made it very clear that they will take robust action against any firms who do not have an acceptable AML firm wide risk assessment in place. Law firms should read the SRA decisions or firm wide risk assessment case studies to learn from the mistakes of others.

CQS Mortgage and Property Fraud Prevention Policy - What to Include

noreply@blogger.com (Simon Seaton) — Thu, 18 Dec 2025 11:52:00 +0000

It’s one thing to say you have a Mortgage and Property Fraud Prevention Policy; it’s another to have a document that actually works under pressure. If you are currently updating your firm’s manual to meet CQS requirements, you don’t need to reinvent the wheel. Below is a sample index of what a 'gold-standard' CQS Mortgage and Property Fraud Prevention Policy looks like. Use this as a checklist to identify gaps in your current procedures and ensure you’re hitting all the mandatory CPMS requirements

Introduction

Client Due Diligence

Identity of the Client and Client's Circumstances
Linked Transactions

External Parties

Identity of the Other Lawyers

Financial Considerations

Proceeds of Sale
General Considerations
- Proceeds being sent to non-client
- Variations in price, incentives and other material considerations

Risk Assessment and Valuations

Valuations
Mortgage Fraud Schemes
Types of Property Fraud

Safeguarding and Security

Safeguarding the Firm’s Client Account
Buyer-funded Developments
Unencumbered Property

HM Land Registry Procedures

General
HMLR Requisitions Procedure
HMLR Registration Procedure

Governance

Warning Signs
Monitoring & Review
Acknowledgement Provision

Appendix

Target 2026: Is Your Firm Ready for SRA Sanctions Audits?

noreply@blogger.com (Simon Seaton) — Thu, 18 Dec 2025 10:39:00 +0000

The regulatory honeymoon is well and truly over. As we move to 2026, the SRA Sanctions Audit has evolved from a peripheral compliance check into a central pillar of legal supervision. Firms still treating sanctions as a minor subset of AML are now finding themselves directly in the crosshairs of the Solicitors Regulation Authority.

While the industry anticipates a potential migration of AML supervision to the FCA, the current focus remains squarely on the SRA Sanctions Audit. The regulator has doubled down on its remit, initiating a wave of desk-based reviews and deep-dive inspections. Whether you are a small firm or a global player, the SRA Sanctions Audit expectations for 2026 are non-negotiable.

The 2026 Inspection Landscape

The SRA Sanctions Audit roadmap is clear. Remote desk-based reviews are now targeting high-risk sectors, specifically firms involved in conveyancing, trust and company services, or those with international client links. These are not light-touch queries. An SRA Sanctions Audit is designed to probe whether your controls are genuinely embedded in your daily operations or just gathering dust on a shared drive.

Onsite inspections have also shifted. Every standard AML visit now incorporates a comprehensive SRA Sanctions Audit. The regulator is no longer looking at money laundering in isolation; they are assessing how you identify, manage, and escalate sanctions risk as a distinct threat.

Lessons from Recent Failures

Data from 2025 revealed that nearly 500 firms lacked adequate controls, missing everything from basic risk assessments to robust screening processes. These firms are the primary targets for an SRA Sanctions Audit in 2026. The trigger for this crackdown is a simplified but more demanding UK framework.

The move to the Single UK Sanctions List means firms must have one definitive source of truth. Relying on outdated dual-list systems will almost certainly lead to a failed SRA Sanctions Audit. Furthermore, the new General Licence for legal services requires meticulous record-keeping. If you cannot demonstrate a clear internal process for reporting work under this licence, you will struggle during an SRA Sanctions Audit.

Bridging the Implementation Gap

The SRA Sanctions Audit is no longer a tick-box exercise. SRA auditors will be focused on the implementation gap. To survive an inspection, you must have:

A dedicated sanctions risk assessment or sanctions policy that analyses exposure to designated persons and jurisdictions.
Documented screening procedures that occur at onboarding and at regular intervals for existing clients. Good CMRAs have this.
Evidence of staff training regarding reporting obligations to the Office of Financial Sanctions Implementation.

If your staff cannot explain how to handle a sanctions alert or when to report a suspected breach, your SRA Sanctions Audit may trigger a full SRA AML Audit or result in enforcement action.

High Stakes and Fining Powers

This shift represents a significant regulatory culture shock. The frequency of the SRA Sanctions Audit is increasing at the same time the regulator’s fining powers have expanded. With enforcement outcomes nearly doubling in recent months, the financial and reputational cost of a failed SRA Sanctions Audit is at an all-time high.

The SRA is now using a data-led approach, arriving for inspections with a pre-analysed view of your firm’s risk profile. To navigate this new era of oversight, you must move beyond policy and focus on demonstrable operational controls. Investing in robust governance now is the only way to ensure your next SRA Sanctions Audit is a success.

Poor Service from Conveyancing Solicitors or Licensed Conveyancers

noreply@blogger.com (Simon Seaton) — Thu, 18 Dec 2025 10:21:00 +0000

The only people, by law, who can deal with the legal aspects of conveyancing are solicitors and licensed conveyancers. If you have had poor service from your conveyancing solicitor or licensed conveyancer, and they haven’t dealt with your complaint satisfactorily, you can do the following:

• In the case of a conveyancing solicitor, you can complain to the Legal Complaints Service (LCS). If it agrees with your complaint, the LCS can order your conveyancing solicitor to refund your fees or pay you compensation. If you are not happy with how the LCS handles your complaint, you can then take the complaint to the Legal Services Ombudsman.
• For a licensed conveyancer, you can complain to the Council for Licensed Conveyancers who, like the LCS can order your conveyancing lawyer to refund your conveyancing fees or pay you compensation.

If you suffer a financial loss as a result of negligence (i.e. the conveyancing solicitor or conveyancer didn’t do something they should have done, or did something they shouldn’t have done, and you lost out as a result), you may have a case for compensation. In this situation you need the independent advice of a litigation solicitor to take your case. Neither the LCS or Council for Licensed Conveyancers determine handle negligence claims. The Law Society has a ‘negligence panel’ of solicitors who are prepared to take action against other solicitors. Solicitors and conveyancers must, by law, be covered by negligence insurance, also known as professional indemnity insurance.

Investigation into Conveyancing referral fees

noreply@blogger.com (Simon Seaton) — Thu, 18 Dec 2025 10:20:00 +0000

Hot on the heals of the Law Society looking into the question of referral fees, commissions by conveyancers to estate agents and mortgage brokers are to be examined by the Legal Services Consumer Panel.

The Legal Services Consumer Panel will also look at other referral fees paid by lawyers to insurance and claims management companies.

London Conveyancing firm shut down over alleged dishonesty

noreply@blogger.com (Simon Seaton) — Thu, 18 Dec 2025 10:19:00 +0000

This morning’s Times contains an article Solicitors Regulation Authority closes down law firm Wolstenholmes. The article reveals that five solicitors have been suspended after allegations of dishonesty involving hundreds of thousands of pounds of clients’ money.

The Solicitors Regulation Authority has started an investigation into the activities of Cheshire-based Wolstenholmes, which was established in 1818 and carries out conveyancing in London, Manchester and Birmingham.

Customers have bombarded the forums of websites such as Money Saving Expert with complaints about the way the company takes £300 as a deposit and then allegedly does not return calls.

One client of the conveyancing firm has reportedly told the BBC that she had been left living in a caravan with her children. She claimed that the £445,000 she had transferred to Wolstenholmes, nearly half of which was her own money, had been frozen.

Landlord stung by failure to comply with service charge requirements

noreply@blogger.com (Simon Seaton) — Thu, 18 Dec 2025 10:19:00 +0000

In Daejan Investments Ltd v Benson and others [2009] UKUT 233 (LC), the Freeholder/landlord who owned a block of shops and flats gave notice to the leaseholders of the flats that it intended to carry out major works amounting to £270,000.

The landlord failed to comply with the statutory service charge consultation requirements leading to a service charge dispute. The Leasehold Valuation Tribunal (LVT) refused to grant a dispensation from compliance. This net result of the decision was that the service charge liability of the five leasehold owners was limited to £250 each.

At appeal, the Lands Chamber of the Upper Tribunal agreed with the Leasehold Valuation Tribunal that it could not take into account the disproportionate financial consequences for the landlord when deciding whether or not to make an order for dispensation: the statutory consequences of the failure to comply were an intrinsic part of the law relating to service charges, and there to be followed.

This decision should be seen as a warning to landlords to comply fully with the detailed service charge consultation requirements. This is particularly important in the case of major works, as non-compliance can result in a drastic reduction in the amount that the landlord can recover from the leasehold owners.

Land Registry launches new Flood Risk conveyancing search

noreply@blogger.com (Simon Seaton) — Thu, 18 Dec 2025 10:18:00 +0000

Adopting some of the latest IT, the Land Registry has recently combined its data with the Environment Agency's flood data to produce its new Flood Risk Indicator.
Homebuyers can use the Flood Risk Indicator to access clear and reliable information about the possible risk of flooding.

Customers can purchase Flood Risk Indicator on-line via the Land Registry website. After inputting address details, home buyers will receive a Flood Risk Indicator result in a couple of minutes – stating whether a specific area of land is likely to experience flooding. Customers can instantly download their result, which indicates whether or not their property is affected by a flood plain. This will assist in being able to obtain building insurance. Time will tell whether mortgage lenders will require this search to become a compulsory search within the conveyancing process.

Flood Risk Indicator raises customers' awareness of flooding, and helps them plan and prepare as a result of being better informed about the possible risks. Flood Risk Indicator is available now in the Find-a-Property section of the Land Registry website.

Mortgage Fraud Booming Like Never Before

noreply@blogger.com (Simon Seaton) — Thu, 18 Dec 2025 10:17:00 +0000

BDO, has come up with some frightening figures on mortgage fraud, against a backdrop of soaring UK losses to fraud in 2009 (over £2 billion) across all sectors. It predicts worse to come.

In 2009, mortgage fraud accounted for 18% of all reported fraud and 27% of fraud in the UK finance and insurance sector.

Simon Bevan of BDO commented rather frankly: “It may have become more difficult for the person on the street to secure a mortgage in the UK, but the mortgage fraud industry is booming!”

Mortgage fraud often works through a large loan being taken out on an overvalued property with a corrupt buyer, valuer and/or conveyancing lawyer working in collusion.

The same group will then apply the scam to a portfolio of properties, meaning that the fraud can escalate to large amount.

BDO warns of “a tidal wave” of fraudulent borrowing that has only just beginning to appear, particularly through the use of over-valued properties as security for mortgages .

Worryingly, he suggests many of these frauds are yet to be recognised by the banks, which still have them classified as non-performing loans. CQS now requires their accredited firms to have a Mortgage and Property Fraud Prevention Policy.

Council of Mortgage Lenders calls for abolition of Stamp Duty

noreply@blogger.com (Simon Seaton) — Thu, 18 Dec 2025 10:17:00 +0000

The CML in recent report expressed it’s belief that fundamental reform of stamp duty is necessary. It states that it regards Stamp Duty as a tax that discourages labour mobility, and with it’s “ tier ” structure has the effect of causing transactions to “bunch” just under each of the tax thresholds.

The CML state “ While abolition would be the best option, a move to a graduated structure would be an improvement on the current system, even if done on a cost-neutral basis. While the temporary concession was welcome as far as it went, it is disappointing that the government has not sought to implement this desirable reform of an anachronistic tax”.

Conveyancing solicitors urged to sign up to web portal

noreply@blogger.com (Simon Seaton) — Thu, 18 Dec 2025 10:16:00 +0000

The Land Registry Direct system will be ending on 31 March 2010. The technology platform on which it is rests will cease to be supported, meaning that conveyancing services in Land Registry Direct cannot be developed further. The new home for the Land Registry business e-services is the Land Registry Portal, which uses the most up-to-date online technology to provide conveyancers and the public with enhanced services.

The Law Society, the CLC and the Land Registry are all encouraging conveyancing lawyers to sign up if they haven’t done so already. If conveyancers send in their application forms by 15 February 2010, then they will avoid the risk of losing access to their business e-services. If conveyancing firms require additional services such as Network Access Agreements and Lender Services, these are optional and can be applied for at a later date.

Landlord and Tenant Act 1987 and unfair service charges?

noreply@blogger.com (Simon Seaton) — Thu, 18 Dec 2025 10:16:00 +0000

In the recent case of Morgan v Fletcher & others six leasehold owners (the "leaseholders") in a block containing of eight flats (the "block") applied to the LVT to vary retrospectively vary their leases.

The leaseholders argued that the service charge clauses in the leases were " not satisfactory" under section 35 of the Landlord and Tenant Act 1987 (LTA 1987). At the time of their application the total of the service charge proportions of all the leases amounted to 116% of the landlord's expenditure.

The landlord then went to vary the service charge provisions for the other two leasehold flats in the building, reducing the total service charge contributions for the building to 100% of the landlord's expenditure.

The LVT( rather logically ) adjusted the leases of the leaseholders to make the service charge contributions proportionate.

The freeholder appealed. The court allowed the appeal. It held that section 35 of the LTA 1987 was not intended to deal with unfairly disproportionate service charge provisions. It was only intended to deal with surplus contributions or a shortfall and not situations where the contribution amounted to 100% of the landlord's expenditure albeit the contribution proportions were unfair.

Even though the court the court expressed sympathy with the leaseholders, it could not retrospectively adjust their leases to rectify the unfair service charge since their circumstances operated outside the intention of the legislation. Accordingly the court was unable to interfere in the contractual freedom of the parties.

Conveyancers would do well to learn of of the difficulties when drafting fair service charge provisions, particularly where the individual flats are of disproportionate proportions.

Conveyancing Solicitors probed by SRA over mortgage fraud

noreply@blogger.com (Simon Seaton) — Thu, 18 Dec 2025 10:16:00 +0000

According to the Financial Times today over 100 law firms suspected of mortgage fraud were investigated in 2009 as part of a crackdown on rogue solicitors resulting in increased interventions.

The figures just released by the Solicitors Regulation Authority reveals that the completed 106 investigations into firms where there was suspected misconduct in relation to mortgages or property.

Of these One Hundred and Six practices, 22 were permanently closed down. Twenty four cases have been referred to the police for investigation, and 30 cases have been referred by the SRA to the Solicitors Disciplinary Tribunal, which has the power to strike off solicitors.

The FT comments “There has been concern about rising levels of property fraud with the SRA’s own figures showing an increase in reports of suspected property fraud involving solicitors up from 85 cases in 2005 to 400 in 2009.”

In the 1980’s property fraudsters used corrupt or incompetent solicitors to help them carry out property fraud and it now seems that history is repeating itself. Mortgage fraud continued its steady rise in 2009. There were 31 cases worth £77 million in the year, compared to ten cases worth just £3.7 million in 2007 and 25 cases worth an estimated £36 million in 2008.

For the full story click here

Argie Bargie over Home Information Packs

noreply@blogger.com (Simon Seaton) — Thu, 18 Dec 2025 10:15:00 +0000

In response to a question from Conservative MP David Amess on what methodology would be used to use to evaluate the effectiveness of the Home Information Pack programme, Communities and Local Government Minister Ian Austin was involved in heated argument. The wording of the debate ( reported in Hansard ) makes interesting reading, so I thought I would share it with you :

Mr. David Amess (Southend, West) (Con): What methodology his Department plans to use to evaluate the effectiveness of the home information pack programme; and if he will make a statement.

Mr. Andrew Mackay (Bracknell) (Con): What methodology his Department plans to use to evaluate the effectiveness of the home information pack programme; and if he will make a statement.

Mr. David Jones (Clwyd, West) (Con): What methodology his Department plans to use to evaluate the effectiveness of the home information pack programme; and if he will make a statement.

The Parliamentary Under-Secretary of State for Communities and Local Government (Mr. Ian Austin): As my right hon. Friend the Minister for Housing said in response to a written question from the hon. Member for Welwyn Hatfield (Grant Shapps), we intend to evaluate the effectiveness of HIPs by updating the HIP baseline research report, which was published in January 2007. A copy of that report is available on the DCLG website.

Mr. Amess: Whatever methodology the Department intends to use, is the Minister aware that Southend estate agents, without exception, believe that although HIPs may have been introduced with the best of intentions, in practice they have not worked out at all well and have damaged the housing market?

Mr. Austin: I do not accept that at all. Despite a difficult housing market, evidence shows that HIPs actually speed up sales. I am not sure whether there is a branch of Connells estate agency in the hon. Gentleman's constituency, but its survey of more than 37,000 transactions showed that sales with HIPs go through an average of seven days quicker.

Mr. Mackay: Why is the Minister in total denial? Nobody whatever thinks that HIPs work, and it would be sensible for the Government to knock them on the head before the election rather than have that albatross around their neck. For our part we are delighted that they are not doing so, but it is in his interests that he should.

Mr. Austin: As always, I am very grateful for the right hon. Gentleman's advice, but I can tell him that thousands of jobs and hundreds of small businesses depend on the HIP process and 13,000 people have invested thousands of pounds in training as energy assessors. The Opposition need to explain why they want to put all those jobs and businesses at risk. He needs to tell all the people in his constituency whose livelihoods depend on the process why the Opposition want to put them out of work.

Mr. David Jones: The interim results of the updated baseline research report are not due to be published until this summer at the earliest. Given that no empirical evidence is therefore available to the Government about the impact of HIPs on the current housing market, why do they not listen to bodies such as the Law Society, which has said clearly that HIPs

"add a significant layer of costs for consumers but produce no discernable benefit"?

Mr. Austin: As a result of HIPs, more than 2 million home owners now have an energy assessment and recommendations in their energy performance certificate that can help them cut their fuel bills by hundreds of pounds and reduce carbon emissions. That is just one of the many benefits of the HIP process that we have introduced. I thought that tackling climate change was one of the big priorities for the new, modern Conservative party. So much, I suppose, for voting blue to go green.

Rob Marris (Wolverhampton, South-West) (Lab): I have to tell my hon. Friend that as a member of the Law Society of England and Wales, I tend to agree with it. We have to have energy performance certificates under European Union law anyway, and we would have the jobs because of that. Does he really think that for most people, a cost of more than £500 to save an average of seven days, according to the Connells survey, is money well spent? A lot of my constituents do not.

Mr. Austin: Obviously, I am very grateful to my constituency neighbour for his intervention on this issue. He is a great man, he really is.

Law preventing pulling of rug from under tenants feet

noreply@blogger.com (Simon Seaton) — Thu, 18 Dec 2025 10:14:00 +0000

Last week saw the second reading, in the House of Commons, of The Mortgage Repossessions (Tennant Protection ) Bill. The proposed legislation aims to give private tenants greater protection from repossession if their landlord defaults on the property mortgage. If passed it is believed that the Bill would close a legal loophole causing problems for at least 3,000 tenants a year.

The Bill:

- Gives courts the power to suspend (for up to two months ) the repossession of a property in cases where the mortgagee had rented it out without informing the mortgage lender
- Requires the lender to give notice, at the property, of the proposed execution of the possession order.

The Bill, which has cross party support, also has the backing of the three national landlord organisations as well as the Citizens Advice Bureau, Shelter and Crisis, and is likely to become law in the next few months. The most vociferous opponent to the Bill is the CML

Recent OFT Report on Estate Agents seems to please no one !

noreply@blogger.com (Simon Seaton) — Thu, 18 Dec 2025 10:14:00 +0000

Conveyancing Solicitors :

Conveyancing Solicitors have expressed the disappointment that the OFT did not propose the regulation of estate agents in its home buying and selling.
Commenting on the report Paul Marsh, Law Society property spokesman, said: ‘We’d have liked to see them recommend that regulation of estate agents was put in place to create a level playing field with solicitors, who are very heavily regulated.’

Strange that government deems that solicitors must be heavily regulated by independent bodies and cannot regulate themselves, despite the fact that satisfaction surveys say they do a good job.

Estate Agents :

Peter Bolton King, chief executive of the National Association of Estate Agents, added: ‘Once again the OFT has categorically failed to see that better regulation of the home buying and selling market is required… it is disappointing that the OFT has not thought it appropriate to acknowledge that a robust and appropriate level of consumer protection is needed.’

‘The NAEA would like to see a greater level of regulation to ensure that professional, qualified estate agents are not confused with agents that, all too often, fail to meet the basic professional standards we would expect from our members,’ he said.

Land Registry portal e- conveyancing services

noreply@blogger.com (Simon Seaton) — Thu, 18 Dec 2025 10:13:00 +0000

The Land Registry has announced that the changes to portal Business e-services which were scheduled for 6 September, have not been released. This has been due to an unexpected electricity failure.

The much awaited changes will now be released on 13 September 2010. This includes the planned electronic delivery changes for portal Business e-conveyancing services transactions and application for Deputy Responsible Persons.

Mind the Gap: SRA Targets the "Disconnect" in AML Policies for 2025 Thematic Review

noreply@blogger.com (Simon Seaton) — Thu, 18 Dec 2025 09:33:00 +0000

The SRA has confirmed that its 2026 AML thematic review will focus squarely on AML Policies, Controls and Procedures (PCPs) — and it’s not just another paperwork exercise.

This latest review follows previous deep dives into firm-wide risk assessments, client matter risk assessments, and source of funds. But the regulator says a familiar problem keeps resurfacing: firms have AML manuals, yet those policies often fail to translate into day-to-day behaviour.

In short, the SRA has identified a persistent disconnect between policy and practice.

Why the SRA Is Turning the Spotlight on PCPs

AML compliance has been a legal requirement for years — in some cases, decades. Yet supervisory work continues to reveal the same weaknesses:

Processes exist, but aren’t followed
82% of firms referred for investigation had risk assessment processes in place; they simply were not being applied at client matter level.
Policies frozen in time
Some firms still lack mandatory policies that have been required since 2003.
Generic, off-the-shelf manuals
A recurring issue is firms relying on templated PCPs that bear little relation to their size, work type, or actual risk profile.
Collection without scrutiny
Recent SAR reviews show that even where documents are on file, fee earners often fail to properly review them for red flags.

These findings highlight why independent AML audits are increasingly valuable. External reviewers are far more likely to spot where written policies diverge from real-world behaviour — particularly issues that have become “business as usual” internally.

What the SRA Will Be Looking At in 2026

This review goes well beyond checking whether a policy exists. The SRA will be examining how AML operates in practice, including:

Monitoring under Regulation 19

How effectively firms monitor compliance with their own PCPs — and whether that monitoring genuinely tests behaviour rather than confirming paperwork.

Independent AML audits often provide firms with a practical benchmark here, helping MLROs evidence that monitoring is robust, objective, and capable of identifying real gaps before the regulator does.

Understanding the “why”, not just the “what”

Whether staff understand the purpose behind the controls they are applying, or whether AML has become a tick-box exercise.

Quality of internal file reviews

The SRA has already found that a third of internal reviews failed to consider source of funds — one of the most effective AML controls. Independent audits can strengthen this process by stress-testing file reviews and highlighting where AML risks are being overlooked.

How Firms Should Prepare — Before the SRA Arrives

MLROs do not need to wait for the thematic review to start testing their controls. Practical steps firms should be taking now include:

Bridge the policy–practice gap
Ensure that what is written in your PCPs genuinely reflects how fee earners work in practice. Independent AML audits are particularly effective at identifying this disconnect because they assess files, workflows, and staff understanding together.
Deliver targeted AML training
Where internal reviews show recurring errors — such as weaknesses in ongoing monitoring — firms should move away from generic refresher training and focus on targeted interventions that address specific failures.
Treat client matter risk assessments as live documents
Cleint Matter Risk Assessments should evolve as transactions progress, rather than being completed once and forgotten. Independent reviews frequently identify static risk assessments as an early warning sign of wider AML control failures.
Prioritise scrutiny over collection
The aim is not simply to gather documents, but to understand them. External AML audits reinforce this message by focusing on decision-making and risk analysis, not just document presence.

What Comes Next

The SRA has confirmed it will use the findings from the 2026 thematic review to issue further guidance and support to the profession.

For firms that still view AML as a documentation exercise, this review is a clear warning: the regulator is increasingly focused on how controls are applied in reality.

Independent AML audits are no longer just a “nice to have”. They are fast becoming a practical way for firms to identify weaknesses early, strengthen compliance, and demonstrate a proactive approach to AML — long before the SRA comes knocking.

The Big Move: Nationwide and Virgin Money Set a Date

noreply@blogger.com (Simon Seaton) — Wed, 17 Dec 2025 12:37:00 +0000

It’s official—or at least, the timeline is. Following the news of the acquisition late last year, Nationwide Building Society and Virgin Money have announced that they are aiming to fully integrate their businesses on April 2, 2026.

For customers and observers of the UK banking landscape, this marks the beginning of a significant shift. Here is the breakdown of what is happening and what it means.

What’s the Plan?

While the two companies are already part of the same group, they currently operate as separate entities. The goal is a formal "Part VII transfer," a legal process that moves Virgin Money’s entire business under the Nationwide umbrella.

The Key Date: April 2, 2026 (subject to court approval).
The Legal Hurdle: A High Court hearing is scheduled for February 23, 2026, to give the final green light.
The Process: If approved, the transfer happens automatically. You won't need to fill out new forms or move your own data.

Why Does This Matter?

This merger creates a banking powerhouse that combines the member-owned ethos of Nationwide with the digital-forward scale of Virgin Money. For now, the message from both brands is clear: stay put. There is no immediate action required from customers, and services should continue as normal during this transition period.

Impact on Legal and Mortgage Services

For those currently in the middle of a property transaction, it is important to note how this may eventually affect professional services. Currently, firms on the Nationwide BS conveyancing panel and the Virgin conveyancing panel continue to operate under their respective existing guidelines. However, as we move closer to the 2026 integration, legal professionals and mortgage applicants should watch for updates regarding a unified panel structure.

What to Watch For

While the technical transfer is slated for 2026, keep an eye on:

Product Changes: Potential updates to interest rates or account features as the portfolios align.
Branding: How Nationwide chooses to integrate the Virgin Money brand over the long term.
Communication: Check the official transfer hub for updates if court dates shift or if there are updates to the Nationwide BS conveyancing panel requirements.

The Bottom Line: This is a massive administrative undertaking, but for the average user, it’s a "wait and see" situation. For now, your money stays where it is, and the banks handle the heavy lifting.

About CQS Conveyancing

The High Street Practitioner’s Guide to Surviving the FCA

The end of "I’ve known them for years"

Moving past the "Tick-Box" trap

The "Sole Practitioner" burden

Making it work on a high-street budget

Paperwork is not a shield: Why your SRA aml audit demands more than just a dusty manual

FCA AML Audit: The SRA Is Out, the FCA Is In

What Makes an FCA AML Audit Different

The End of the Soft-Touch AML Era

Reputation Risk During an FCA AML Audit

Why Early FCA AML Audits Will Be High Profile

Double Jeopardy: FCA and SRA at the Same Time

Powers Law Firms Are Not Used To

Preparing for an FCA AML Audit Now

The Bottom Line

How Often Should Your Firm Conduct an Independent AML Audit?

1. The Regulatory Starting Point: "When Appropriate"

2. Factors That Shorten the Clock (The 12-Month Rule)

3. Trigger-Based AML Audits (The "Change" Rule)

4. Why "Internal" Isn’t Always "Independent"

The Bottom Line

The December 2025 AML Crackdown: Is Your Firm Next?

The Case Files: December Enforcement

The AML Reality Check: It is Strict Liability Now

AML Audit Case Study - A Conveyancing CQS Frim

AML Firm-wide Risk Assessment: No1 Document

The Focus of the FWRA

Common Pitfalls

SRA Enforcement

CQS Mortgage and Property Fraud Prevention Policy - What to Include

Target 2026: Is Your Firm Ready for SRA Sanctions Audits?

The 2026 Inspection Landscape

Lessons from Recent Failures

Bridging the Implementation Gap

High Stakes and Fining Powers

Poor Service from Conveyancing Solicitors or Licensed Conveyancers

Investigation into Conveyancing referral fees

London Conveyancing firm shut down over alleged dishonesty

Landlord stung by failure to comply with service charge requirements

Land Registry launches new Flood Risk conveyancing search

Mortgage Fraud Booming Like Never Before

Council of Mortgage Lenders calls for abolition of Stamp Duty

Conveyancing solicitors urged to sign up to web portal

Landlord and Tenant Act 1987 and unfair service charges?

Conveyancing Solicitors probed by SRA over mortgage fraud

Argie Bargie over Home Information Packs

Law preventing pulling of rug from under tenants feet

Recent OFT Report on Estate Agents seems to please no one !

Land Registry portal e- conveyancing services

Mind the Gap: SRA Targets the "Disconnect" in AML Policies for 2025 Thematic Review

Why the SRA Is Turning the Spotlight on PCPs

What the SRA Will Be Looking At in 2026

Monitoring under Regulation 19

Understanding the “why”, not just the “what”

Quality of internal file reviews

How Firms Should Prepare — Before the SRA Arrives

What Comes Next

The Big Move: Nationwide and Virgin Money Set a Date

What’s the Plan?

Why Does This Matter?

Impact on Legal and Mortgage Services

What to Watch For