Every adult in the State of Victoria is a Conveyancer. That’s right, no qualifications or experience is needed for anyone to call themselves a conveyancer and to charge clients for conveyancing services.
Police checks? No problem. A conveyancer in Victoria can handle clients’ funds without ever having to worry about any form of integrity check. This is despite the theft of millions of dollars from consumers when Grove Conveyancing collapsed in 2004.
While there has been a lot of talk about pending legislation to legitimise the industry, reform is still a long way off. Discussing the the governments pending “Conveyancers Bill”, CEO of the Law Institute of Victoria Michael Brett-Young asks, “Would you bet your house on it?”
The following message from CEO Michael Brett-Young appears at page 6 of the Law Institute Journal, October, 2006:
“Would you bet your house on it?
THE GOVERNMENT’S CONVEYANCERS BILL STILL LEAVES CONSIDERABLE DOUBT ABOUT THE REGULATION OF CONVEYANCERS.
The Conveyancers Bill last month underwent its second reading in the Legislative Council. The Bill seeks to institute a regulatory regime for non-lawyer conveyancers in Victoria.
While the Law Institute of Victoria (LIV) welcomes any legislation which increases the protection of consumers, a lot more information is required before the public can be ensured of this protection.
It is imperative that if conveyancers are able to compete for conveyancing work with lawyers they must be required to meet the high standards that are required of lawyers.
To allow otherwise would not only discriminate against the legal profession, it would not lead to the expected consumer protection promised by Consumer Affairs Minister Marsha Thomson.
In announcing the legislation, Ms Thomson said that the Bill would increase competition in the market by removing laws that stop conveyancers from competing with lawyers.
She further stated: “Consumers need to be protected during what is often the biggest investment they will make – buying a home”.
The late 2004 failure of Grove Conveyancing Services, in which consumers lost millions of dollars, highlights the need for such consumer protection to be provided and maintained under the new controls.
Lawyers are subject to compulsory professional development, frequent audit inspection and a ban on the issuing of a practising certificate if the relevant insurance is not in place. They expect a level playing field to be introduced under the new legislation – as, I am sure, do the public.
It is not just the Conveyancers Bill that will provide this but also the relevant regulations and, more importantly, the manner in which the legislation is enforced by Consumer Affairs Victoria. It is unfortunate that these regulations have not vet been introduced.
The LIV has made submissions to Consumer Affairs Victoria (CAV) (SeeThe Law Institute Website) about the conveyancing legislation and is looking forward to continuing to work with Ms Thomson on the regulations.
Conveyancers, who have long sought the ability to compete with solicitors in these transactions, should recognise that this ability comes with a much greater accountability.
To do otherwise would reduce the impact that the Minister has sought through the introduction of the legislation. The proposed legislation provides as follows:
Competency qualifications and work experience. In order to obtain a licence conveyancers need to satisfy the competency and work experience requirements.
Professional indemnity (PI) insurance. Conveyancers must hold PI insurance. However, the required insurance and the conditions and requirements that the insurance is to satisfy, including the minimum level of cover, are not set out in the Act.
Trust accounts. Conveyancers who receive trust money must maintain a general trust account. A licensed conveyancer with a trust account must establish and maintain the account in accordance with the regulations. While there are provisions which deal with trust money, the regulations have not vet been developed.
Audits. A conveyancer required to keep trust accounts must have these records audited by an approved auditor annually.
External interventions. The Bill allows the Director of CAV to appoint a statutory manager to a conveyancing business.
Receivers. Provision is made for the appointment of receivers by the Supreme Court.
Fidelity fund. The fund is the Victorian Property Fund established under the Estate Agents Act 1980.
Inspectors. Inspectors are inspectors appointed under the Fair Trading Act1999.
The provisions contained in the legislation will be very familiar to solicitors, who have been required to meet similar requirements in their practices for a long time. The legislation deals with many of the matters raised by the LIN’ in its submission to the government.
Currently, the Act is due to come into effect on r July 2008 but there could be an earlier commencement date.
The LIV will monitor closely the introduction of this legislation to help protect consuiners and will keep members informed of developments related to their practice.”