The new Core Practice Management Standards (CPMS) imposed by the Conveyancing Quality Scheme (CQS) sets out new practice procedures for Part 2 of the UK Finance Handbook that must be followed and will come into force May 2022.
The UK Finance lenders' handbook provides comprehensive instructions for conveyancers acting on behalf of lenders in residential conveyancing transactions.
Since the move of the Lenders Handbook to UK Finance and availability online, no records of what or when a change to the Part 2 requirements are kept by UK Finance. Lenders now have access to change their Sections 24/7, with 71 questions updated in the last 30 days alone.
The UK finance website will give you the date of the last update made by a Lender, but most notably, not highlight which question was changed or what that change was.
Despite this, conveyancers will be expected to demonstrate compliance with these any new requirements. The new CPMS states that:
“Practices must have a policy for dealing with Lenders which must:
6.4: b. Contain a procedure to ensure that Part 2 of the UK Finance Handbook is checked by a fee earner to ascertain the lender’s standard requirements, as well as those specific to a transaction, and for verifying that all of those requirements have been satisfied, prior to exchange and recording on the file that the check has been carried out.”
On changes to the CQS, The Law Society said:
"We'll also be introducing a small number of on-site visits each year and increasing the number of desk-based assessments to ensure you're equipped and able to achieve the values of CQS at the same time."
"You must have made any necessary changes to your organisation's policies, procedures and practices by 1st May 2022.
CQS members will be expected to demonstrate compliance with the CPMS from 1st May 2022 onwards."
Mike Georgiou, Managing Director of Navro Compliance, a tool for conveyancers to review Part 2 requirements, said:
“ We’ve been tracking the register for almost two years now, keeping records of what changes are made for each lender, together with details of when these take place.
If there is one thing we have seen is that there is no consistency of when and how often changes will be made or by which lender. Some, like HSBC can be prolific in their updates sometimes updating their part 2’s a few times a week. Others can be less often but for example 8 different lenders have made changes to their Part 2’s since the 24th March 2022, including HSBC.
The danger is that even if you have checked the part 2’s at some point in the transaction, these can change leaving you and your firm vulnerable unless robust systems and procedures are in place to protect you. “
On what software is available to assist conveyancers in complying with the CPMS, Georgiou added:
“Most of our clients run a report on the day a case is set up. This will show all the Part 2s for a Lender on that day which is referenced for the case and is date and time stamped.
An update can then be run which will compare the requirements on the date of the update to those of the last report run. If there have been any changes, these are clearly highlighted with both the new changes and the old wording shown for comparison.”
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