*Updated: This article was originally published on Lockton’s website on October 25, 2024, and was subsequently shared. We have updated it in light of recent changes issued by the Law Society on November 6, 2024 in an attempt to more accurately represent the position following this date. The information provided in this article is for general information purposes only and should not be construed as legal or professional advice. Nor does it reflect our support for any changes.
Under the Consumer Protection Regulations (CPRs), there are obligations to disclose certain Material Information (opens a new window) to consumers about residential properties. The National Trading Standards Estate and Lettings Agency (NTSELAT) issued guidance on what should be classified as Material Information under the three key categories: Part A, which came into force in 2022; and Parts B and C, which came into force in November 2023.
The purpose of the updated guidance is to further aid buyers/renters by ensuring they have access to key information at an earlier stage in the buying/renting process. This is supposed to allow them to make a more informed decision on whether they’d like to proceed with the property. By reducing the likelihood of a prospective buyer/renter finding out detrimental information about the property later on in the process, the new guidance intends that fewer transactions fall through at a late stage (i.e. after conveyancers have been instructed).
Following this guidance (and not without hesitation of those affected by the guidance), several changes have been made by those involved in the buying and selling process of homes, including estate and lettings agents asking additional questions about properties, and property platforms such as Rightmove adding extra fields in their listing templates. Other professionals, such as solicitors, have since been looking at the guidance in the context of how it may affect them professionally and in relation to their already-busy workload. This article looks at some of these changes from a high-level perspective.
In March 2024, the Law Society issued a revised version to the TA6 and TA7 Property Information Forms. Compulsory use of the TA6 revised form was due to come into effect on January 15, 2025. However – and underlining what a difficult topic this has been and continues to be - the Law Society published an update on November 6, 2024 that this deadline has now been extended (opens a new window). A further update is expected in the new year to allow the Law Society more time to engage with members on the topic. As it currently stands, there is no set date on when the compulsory use of the updated form is expected to come into effect.
What’s being changed?
The revised TA6 and TA7 forms include updated and new questions in support of the recent NTSELAT material information guidance. This is intended that material information is shared between each party to the transaction and their conveyancers.
Implications for conveyancers
If and when the changes come into effect, for conveyancers that are affected by these changes the updated guidance may mean that they are instructed earlier on in a transaction. They may also be able to provide more accurate advice to their clients, given that key information should be more readily accessible, or will be shared by relevant estate agents that are involved in the transactions. Overall, it is suggested that this may encourage quicker transactions from start to finish, resulting in more satisfied clients.
However, there are risks that come from the update. Failure to use the updated TA6 form if and when it becomes compulsory (and thus failure to comply with CPR requirements) could result in fines, and penalties. This is in addition to the consequences of any failure to comply with Solicitors Regulation Authority (SRA) principles, such as treating customers fairly, and any potential negligence claims from clients and lenders relating to any additional information that may be required to be obtained and/or given following the updated form.
The deadline has been extended – but should I start using the new form now?
Following feedback received from its members through consultations done with an independent research agency, the Law Society decided to extend the deadline for the compulsory use of the new TA6 form until further notice so that it has time to consider the “huge amount of evidence collected”. Further updates are now expected in early 2025, which shows how challenging this topic is for the Law Society and those affected. This now gives conveyancers the option to use the previous version (Fourth Edition, Second Revision, 2020) or to start using the new Fifth Edition now.
Given that it is looking likely that conveyancers may need to adopt the Fifth Edition TA6 form at some point, conveyancers should start thinking about how these changes may affect their current processes, and may wish to consider updating their processes to use the new form sooner rather than later. By doing this, conveyancers will already be complying with their duties and will minimise any risks of any potential complaints, fines, and penalties arising from being caught out should the new form become compulsory, and conveyancers have accidently missed information on the new mandatory adoption date.
There may be further practical reasons to adopt the revised form. Some of the additional information will be easy to obtain, and may already have been disclosed by sellers to their estate and/or lettings agents. It is therefore quicker and easier to share this with conveyancers at the same time. All parties involved in the process from agents to conveyancers should all have the same information about the relevant property – or where there are any discrepancies, they should be easier to identify and rectify at the earliest stage possible.
Firms should consider the potential for information to be present in a transaction due to actions of other parties in response to the NTSELAT guidance, and where a solicitor may face criticism for not having identified, challenged or otherwise reacted to it. Firms will need to consider how they would address such exposures or criticisms, whether through the use of a TA6 form or other means. This will no doubt be more time-consuming for conveyancers, and they will need to be more alert to the increased risk of inaccurate information and advice being given.
Insurance and reputational considerations
Potential implications of administrative errors around information provided can be serious, and may apply regardless of the changes being proposed by the Law Society. Following any decision on the compulsory use of the updated form, conveyancers found not to be using the form, when required to do so, may be found to be negligent in their duty of exercising reasonable skill and care when providing services to a client. Additionally, firms should be mindful of not being in breach of their professional duties with the regulator. While a PII policy may cover a liability claim in the civil courts, fines and penalties are usually excluded under PII.
Another point to consider is that firms may also be exposed to reputational harm where they fail to comply with any compulsory requirements with the potential consequences of unsatisfied clients and loss of business.
Ultimately, it’s important for firms to be aware of the guidance, to be on top of changes in practice of the wider property market and to keep an eye on the latest developments with the Law Society on this topic.
Further guidance
NTSELAT: Material Information - National Trading Standards (opens a new window)
The Law Society: TA6 consultation: two-form approach temporarily extended (opens a new window)
The Law Society: TA6 form changes: frequently asked questions (opens a new window)
The Law Society Gazette: Law Society extends period for using different TA6 property information forms (opens a new window)
