Energy Performance Certificates
One example of the perils of relying on the current state of AI Internet searches instead of taking professional advice is what the legal requirement is for EPC ratings on property. Internet search results cite as a legal requirement what in fact are still only Government proposals. Even property portfolio owners are confused as to what is required of them.
At present we are waiting for the outcome from the Government consultation. The consultation lasted 12 weeks to 26 February 2025. The global economic climate having been in such a state of flux since then, it is unclear whether the Government’s intention to use EPC regulation to “accelerate towards net zero” will slow and the likely outcome alter as a result.
The EPC rating is designed to measure a building’s energy efficiency. Currently rental properties have to have an EPC rating of category E. Internet searches suggest that, as of 2025, a C rating is required. This is not the current legal requirement, which remains at E, but instead was a Government proposal. That proposal will be confirmed in draft legislation, following the outcome of the Government consultation, the result of which is not yet available.
This is one example of why it is always best to seek professional advice rather than relying on Internet searches as fact.
Exchanging Residential Property Contracts Before Mortgage Offer
Buyers of residential properties on a new development in Leeds have found themselves seriously out of pocket as a result of exchanging contracts on their off-plan purchase before obtaining a mortgage offer. Speaking to the BBC, some of the buyers claim that their Solicitors told them that they did not need a mortgage offer before exchange. The Solicitors deny having given that advice. Regardless of how those decisions were reached this development shows why it is never advisable to proceed to a binding contract price by exchanging contracts without a mortgage offer.
In the particular case that highlighted the risk, by the time that mortgage offers were obtained the market value of the properties was less than had been agreed at exchange of contract. Those buyers who could not bridge the gap lost their deposits. The three years between exchange of contracts and completion of the build triggering applications for mortgage offers had seen a reduction in market value for the properties from the contract sale price. Surveyors cited a number of reasons for the fall in market price including the increased supply of similar properties and changes in standards of finish from those in the plans.
Before signing up to a contractual obligation where you risk losing a deposit you should first check that you are in a position to proceed once the obligation takes effect.
Probate Timescales
There seems to be some dispute over the time taken by HMCTS to process applications for a grant of probate. One of the first questions that a Probate Solicitor is asked when instructed is how long the application for the Grant would take. The answer during COVID was anything from 18 months. HMCTS has recently announced that waiting times have halved in the six months between June 2024 and December of that year. By the end of 2024 HMCTS say that waiting times are down to 4.8 weeks for digital applications and 14.6 weeks for paper applications.
The impact of these delays, in addition to the emotional and financial cost, has been that Inheritance Tax was payable before property sales could go through. This required some Executors to take out loans to meet the tax liability that would not have been necessary were it not for the delay in processing the application. Whilst the significant efforts applied have made a considerable impact on processing times there are inconsistencies that are adding to an ongoing uncertainty for clients. It is the complex applications which still need to be made on paper that continue to take a long time to process. Practitioners point to their current complex applications continuing to take over a year to process.
HMCTS’s nine-year program of reform has ended. There are still only a few HMCTS employees who are qualified to consider complex paper applications. The delays caused as a result are sometimes more thsn a year. Some firms have complained to HMCTS as a result. It remains to be seen whether more experts are recruited in order to avoid unreliable timescales and further cost to clients at a vulnerable time in their lives.
For further information on any of the issues in this month’s briefing please contact info@meedlaw.com. We are based in the Cotswolds, Chilterns London and Oxford but our clients are country and worldwide. With offices and Solicitors based in Moreton in Marsh, Oxford, the Chilterns and London, as well as the technology to enable us to accommodate your legal needs wherever you are.
