The new guidance released by National Trading Standards Estate and Letting Agency Team (NTSELAT) on material information is driving transformation across all those involved in the home buying and selling process.
For example, Rightmove - the UK’s largest online real estate portal – has recently updated its requirements for new listings to ensure compliance with the new guidance. We released an updated version of the TA6 form in March to reflect the changes put forward by NTSELAT.
Our understanding is that the new TA6 form, which will become mandatory for Conveyancing Quality Scheme firms on 25 June 2024, has already been used in tens of thousands of transactions.
The aim is that by providing an opportunity for solicitors to be instructed earlier, together with the requirement for more information to be provided upfront, will help create stronger chains and a more efficient process by reducing the likelihood of a sale falling through.
The changes are also designed to support your compliance with consumer protection regulations, meet your overall professional obligations and ultimately provide an even better service to your clients.
We have listened to recent feedback from parts of the profession and recognise that earlier engagement to seek input ahead of the changes being introduced would have been helpful.
We are grateful for this feedback and are determined to apply this learning to future significant changes to the transaction forms.
We have developed a range of resources to support you and your firm in collaboration with specialists in the field to provide a full and considered response.
Why did the Law Society update the TA6 form?
The TA6 form was updated to help provide prospective buyers with the information suggested in the National Trading Standards Estate and Letting Agency Team (NTSELAT) guidance on material information.
'Material information' will come into the marketing materials in a variety of ways.
We believe it is important for the profession to take a lead on how this new guidance is introduced, so this is achieved in a way that works best for solicitors and their clients.
It is an opportunity for solicitors to help their clients provide the information required to market the property and enable consistency of the information provided during marketing through into the legal process.
Our aim with the new TA6 form is to help solicitors and consumers follow the NTSELAT material information guidance as seamlessly as possible.
We believe the benefits to solicitors include:
- having well-prepared sellers and well-informed buyers, which should reduce the incidence of conveyancing transactions falling through and strengthen the quality of chains
- having consistent information across estate agents, buyers, sellers and consumers to facilitate the process, making it smoother and more efficient
Firms will be able to:
- ensure they are complying with their professional obligations, regulatory requirements, the law (see below) and the NTSELAT guidance
- provide an improved service to their clients
How will the forms improve the process?
If a TA6 form is completed by a seller, with their solicitor's help, at the same time as the seller's estate agent starts preparing the sales particulars, a copy of the completed TA6 form can be given to the estate agent to enable their property listing to include the material information from the seller.
We know some estate agents will obtain the information directly from the sellers themselves. They have several different means of doing this.
If the estate agent encourages the seller to go to their solicitor and use the TA6 form, this can then be used in the conveyancing process once an offer from a buyer has been accepted (subject to contract).
The new TA6 form will help ensure that once the conveyancing process is underway, the information disclosed by the seller to the buyer through their solicitors in the transaction forms will match what was disclosed by the seller's estate agents in the marketing.
This is desirable even if the TA6 was not completed for marketing purposes.
If the TA6 form covers the same material information that was required for disclosure in the marketing, it should reduce inconsistencies and allow any inadvertent errors in the marketing information to be corrected before contracts are exchanged.
Why did the Law Society not consult with members on the changes?
We keep our transaction forms under regular review and update these when necessary.
We do not usually consult with the whole conveyancing or property membership when making these updates and changes to the TA6 form. We followed the same process for this update.
However, we recognise that some members have been surprised by the number and nature of changes to the TA6 form.
We have understood from the feedback we have had that members would have preferred us to consult and be more transparent as the forms were developed.
We agree that, on reflection, we could have communicated the nature of the changes to the TA6 form while the working group was working on the new version and sought feedback as we went through the process.
We are grateful for this feedback and are determined to apply this learning to future significant changes to the transaction forms.
You consulted on the forms in 2012. Why is this different?
We carried out a consultation, prospectively, in 2012 in relation to changes we were looking to make to the transaction forms on a wide range of issues.
Those changes were generated by the Conveyancing and Land Law Committee and by some of the wider membership.
This was a different exercise from the recent update, which sought to incorporate guidance from an external official body (National Trading Standards) that aimed to establish what constitutes 'material information'.
We incorporated this with the aim of benefitting consumers, conveyancing solicitors and the process in the public interest.
Who was involved in the update of the TA6 forms?
Those engaged in the development of the latest edition of the TA6 and TA7 forms included practitioners from across the spectrum of the membership – small, medium and large firms– as well as professional support lawyers and academics.
Many members of the working group have a wealth of experience working on the transaction forms.
What was the legal position before the changes?
The Consumer Protection from Unfair Trading Regulations 2008 (CPUTR 2008) will be revoked and replaced by the Digital Markets, Competition and Consumers Act 2024 at a date to be appointed.
It is understood currently that the Digital Markets, Competition and Consumers Act 2024 will contain materially the same provisions as those in the CPUTR 2008 so far as the contents of this Q&A are concerned.
The Consumer Protection from Unfair Trading Regulations 2008 (CPRs) have applied to 'immoveable property' since 26 May 2008.
We released a practice note on Consumer Protection Regulations for conveyancersin 2016.
The practice note made clear that infringements of the CPRs by solicitors are potentially offences punishable:
- on summary conviction by a fine not exceeding the statutory minimum,
- on conviction on indictment to a fine, or
- by imprisonment for a term not exceeding two years
The practice note also noted that "many of the obligations placed on you as a solicitor under the CPRs are already covered by your obligations under the SRA Standards and Regulations and, provided that you treat consumers fairly, you are unlikely to be in breach".
The CPRs provide that 'material information' is "information which the average consumer needs, according to the context, to take an informed transactional decision".
The test is whether omitting to disclose material information is likely to cause the average consumer to take a transactional decision they would not have taken otherwise.
On the basis of Office of Fair Trading v Purely Creative Ltd [2011] CTLC 45, what a purchaser "needs" is to be understood in its proper "context", which includes:
- the fact that sellers can rely on thecaveat emptorprinciple, and
- their solicitors owe them a duty of confidentiality
There is unlikely to be an omission of "material information" (and a solicitor will not, therefore, be in breach of the CPRs) if a solicitor fails to disclose information which:
- is confidential, or
- falls within thecaveat emptorprinciple
What is the legal position after the changes?
The legal position does not appear to the Law Society to have changed.
The expanded information sought by the amended transaction forms fits into the two categories that applied before the forms were amended, that is, concerning:
- potential physical defects
- defects as to legal title
The amendments do not extend civil liability for solicitors acting for either buyers or sellers for either category as a result of having to provide more material information under the CPRs.
NTSELAT has developed, with wide cross-sector input, what it considers might constitute 'material information' for sales and letting agents to provide.
The introduction of the new TA6 form means solicitors now make consistent enquiries of sellers to establish whether there is material information that should be provided to prospective buyers.
Our practice note on the CPRs in conveyancinghas been updated.
What is the legal position now for seller's solicitors?
For those acting for sellers, there is no additional liability.
Depending on the retainer, contractual or tortious liability could arise under normal principles applied in the usual way in relation to any additional material information provided or omitted.
For the seller, that might be misrepresentation.
For the seller's solicitor, that might occur where, as a matter of professional obligation, there was a duty to advise the client properly regarding proper disclosure, but the solicitor failed to provide that advice. That is not an extension of liability per se.
In terms of criminal liability, this is very unlikely to be an issue, other than in the highly unlikely scenario in which a solicitor acting for a seller behaves towards the buyer in a way which would fall within the definition of an "unfair commercial practice".
For example, by engaging in an aggressive or threatening behaviour against a purchaser who was a vulnerable elderly pensioner.
In those circ*mstances, it would not matter that there is no contractual relationship between the seller's solicitor and the buyer.
Such behaviour would, in any event, be in breach of the CPRs as well as the SRA Principles and SRA Code of Conduct, mainly:
- Principle 2 (upholding trust in the solicitor's profession)
- Principle 5 (integrity)
- paragraph 1.2 of the code (not taking unfair advantage of clients and others)
What is the legal position now for buyer's solicitors?
Additional liability for those acting for buyers does not arise because of the amendments to the TA6 form.
Criminal liability would only ever arise in blatant cases of aggressive behaviour or sharp practice towards either the buyer or seller, but this is most unlikely to be an issue.
Other questions above address the legal position.
What are the main changes to the TA6 form?
NTSELAT's guidance says that 'material information' includes:
- council tax
- asking price
- tenure – leasehold or freehold
- physical characteristics about the property
- number of rooms
- parking
- building safety
- erosion risk
- property accessibility/adaptations
- coalfield or mining area
See full details on the changes and links to the form and guidance
What are the differences between the 4th and 5th editions of the TA6 form?
Topics of questions asked in the 5th edition (Part 1) that already appear in the 4th edition include:
- additional charges
- parking arrangements
- conservation areas
- tree preservation orders
- listed building
- utilities
- contribution to cost of additional services (shared driveway, private road, drains, etc.)
- rights of light etc.
- flood risk
- proposals to develop land nearby
- breaches of planning permission
- notices
Topics of questions asked in the 5th edition that do not appear in the 4th include:
- council tax
- asking price
- tenure
- physical characteristics about the property
- number of type(s) of room(s)
- construction materials
- building safety
- erosion risk
- property accessibility/adaptations for users with extra needs
- coalfield or mining area
Will sellers be able to respond to questions about these matters?
If the sellers do not know about these issues, they are not obliged to respond.
The TA6 form provides instructions to sellers that "you should answer the questions as accurately as you can from your own knowledge".
If you are instructed by the seller and are supplying this information to estate agents, you should make it clear that the sellers have provided answers on this basis.
If you are instructed by the estate agent to provide this information, you may negotiate to supply this information to a different level of assurance and change and have terms and conditions developed accordingly.
If sellers are only to respond using their own knowledge, how much should I help them to complete the responses?
A seller's solicitor should approach the TA6 form in the same manner as they did in respect of the previous edition.
That is, to advise the client in accordance with the "instructions to seller" at the front of the form.
What are the new requirements from National Trading Standards on material information?
The November 2023 guidance from NTSELAT seeks to set out a view as to what a potential homebuyer will want to know about a property before making a transactional decision.
While it is primarily designed to help estate agents comply with the CPRs by putting key information about a property in marketing materials, it has potential relevance across the whole process, including for conveyancers.
NTSELAT highlights that obtaining certain material information may involve the engagement of a conveyancer.
It expressly states that sellers may wish to engage with their conveyancer at an early stage before a property is marketed to:
- provide prospective buyers with the information they need to know when the property is marketed
- ensure information regarding the property can be reviewed, and
- identify any issues it would be useful to resolve to ensure the property is saleable or mortgageable
When are CQS firms obligated to use the forms?
Conveyancing Quality Scheme (CQS) firms should be using the new forms by Tuesday 25 June 2024.
We know that many firms are using these already.
If there are two CQS-accredited firms acting in a transaction and the seller's solicitors are using the 4th edition, but the buyers' solicitors want to see the 5th edition, which are not compulsory until 25 June, which version should be used?
Different firms use different forms providers. This means the 5th edition is being introduced at different times within a fixed time window, so firms may not have a choice as to which one they use.
Firms are likely to use the one supplied by their provider.
The obligation in the Conveyancing Protocol to use the latest version of forms is in a short transition phase.
There needs to be some pragmatism here – and firms should be able to agree the position between them in the best interests of their clients.
We are a CQS firm planning to implement the new TA6 as required from 25 June. When should this be done? If a transaction has started and a seller has completed the 4th edition, but not exchanged or completed by 25 June, can the transaction proceed without the seller completing the 5th edition?
The aim is certainly not to impose additional burdens on sellers, so there should be no need for them to complete more than one TA6 form.
If the transaction goes on for months beyond the 25 June date, this may be desirable, but the sellers may need to update their responses in these circ*mstances in any event.
It is for the parties to agree between themselves in circ*mstances where transactions have already commenced.
This may be effectively decided by the seller's solicitors, as they are likely to be obtaining the form from the providers they use.
I've heard concerns the NTSELAT guidance increases the liability exposure for solicitors. Is this true and will the Law Society provide guidance on how this can be mitigated?
We are aware of the concerns raised about the expansion of material information potentially altering the exposure of sellers and solicitors to liability under the CPRs.
We have updated our practice note on the CPRs in conveyancing, which was previously updated in 2020, considering both the NTSELAT guidance and the position following the UK leaving the EU.
Can firms charge additional fees for assisting clients in completing the new sections of the TA6 form that accommodate material information?
This is up to individual firms to decide.
There are many ways to implement the latest guidance and firms will want to consider what might best suit their clients and their practice.
We have anecdotal evidence of:
- firms entering into agreements with estate agents to supply 'material information' in advance of marketing (with the scope of the agreements not including acting in the subsequent sales)
- firms developing agreements with sellers solely to produce material information – as this is a formal piece of work, full ID, anti-money laundering and other onboarding requirements need to be performed and a separate fee can be chargeable
- some firms doing what is set out in b) above are proposing to charge the seller a fee for assisting with completing material information and crediting this amount towards the full conveyancing fee if the client instructs them on the sale when they have found a buyer
Is there any prescribed way of implementing the NTSELAT guidance?
There is no prescribed way of implementing this and it is likely to develop over time.
We will look to make some provision for this in the Conveyancing Protocol, but this is likely to be permissive rather than prescriptive.
As set out above, sellers are only required to complete the TA6 form with their own knowledge. This is set out clearly in the introduction to the questions.
To obtain any missing information, some estate agents are looking to commission their own searches.
Some seller's solicitors will do this too and, if they are instructed on the sale, will provide the searches to the buyer's solicitor with the contract bundle.
We know there are differing views about this and that some buyer's solicitors will look to carry out their own searches in any event, but it should be determined as to whether this is necessary. We understand the points about quality of searches.
Some estate agents already obtain information directly from HM Land Registry.
We have heard of estate agents considering employing in-house solicitors to provide this information.
Other third-party organisations are looking to provide material information and broader packs of information.
The property portals will also be looking to provide material information on their websites.
Will the Conveyancing Protocol be amended to reflect this position?
As stated above, we are aware there are many ways of implementing the recent guidance.
We are keen to understand how this is being dealt with in practice before finalising the draft proposed changes we have prepared to the Conveyancing Protocol for consultation.
Provision 15 of the Conveyancing Protocol says "do not raise any additional enquiries about the state and condition of the building unless arising out of your conveyancing search results, your buyer's own enquiries, inspection or their surveyor's report". Does the new TA6 breach this?
No, it does not. The new enquiries are standard enquiries so, by definition are not additional enquiries.
Many sellers with a property that has an unusual construction will know about this and will only be answering the enquiries from their own knowledge.
Will you consider making any further changes to the forms in light of feedback?
We are grateful to those who have used the forms@lawsociety.org.uk email address to provide us with their comments on the new forms.
We are reviewing this feedback and, if there any changes we can make to the forms to improve them, we will look to do this for the next edition.
We will also consider making a clearer separation of the two parts of the TA6 form to distinguish more clearly between the 'material information' and the remainder of the information.
Who can I contact with further questions?
Please email forms@lawsociety.org.uk with any further questions that you may have and we’ll endeavour to respond to you as soon as possible.
