Legal Packs – ‘Beating’ the Pre-Contract Enquiry ‘Cap’
Legal Packs – 'Beating’ the Pre-Contract Enquiry 'Cap'

Dwellant allows property managers to complete LPE1/2 forms electronically in just 20 minutes - all the more important when the £200+VAT cap becomes law. Conveyancing solicitors now download the LPE forms and documents via a secure website we generate for each unique legal pack. Over 5,000 legal packs have been issued this way since launch: Speed and accuracy essential.

In June 2019, the government published a document called ‘Implementing reforms to the leasehold system in England’ which was its response to the 2018 consultation into unfair practices in the leasehold sector.

Section 5 of the document was titled ‘Implementing measures to improve how leasehold properties are sold’. The authors recognised that assigning the lease of a long leasehold property – i.e. selling the property – “can take weeks longer than those involving freehold only, largely due to delays in obtaining information from the freeholder or managing agent”.

Speed of providing LPE1 information

Respondents to the consultation were asked to comment on deadlines for providing this pre-contract enquiry information and the fees to provide it. Typically, respondents believed enquiries should be provided in under 10 days from receipt or within 10-15 days.

How much?

And fee wise, understandably managing agent respondents wanted to see a higher cap than those paying for this pre-contract enquiry information. Some consumer respondents commented that there should be no fee at all.

Dealing extensively with managing agents, we appreciate that the fees they charge for so-called ‘leasehold packs’ are an important part of their income so capping fees at a low level is likely to be deeply unpopular amongst managing agents. The consultation paper commented as follows:

“Managing agents and law firms agreed that when information is requested, the response needs to be accurate, legally robust and produced by professionals. They said that capping costs could mean the increased use of junior staff, giving non-committal answers to protect themselves or even missing out the provision of important information.”

What has the government decided to do?

The government’s decision regarding timescales and fee levels can be summarised as follows:

  • Timescale: Leasehold information to be provided within 15 working days.
  • Fees: A maximum of £200 + VAT has been set for provision of the information in the form of an LPE1 pack.
  • Despite hearing that some solicitors are asking managing agents to apply these timescales and caps now, the legislation has not yet been set so freeholders and managing agents are not yet obliged to adhere to these requirements, which may be at least a couple of years away.

    What do Managing Agents think about these proposals?

    Dwellant is aware that managing agents across the UK charge a wide range of fees and commit to differing timescales to provide the required information to the prospective purchaser of the leasehold property. Anecdotally, most say to us that £200 is insufficient to make this a profitable income stream (particularly for those based in London with greater overheads), as the information takes a while to put together and check, and then there is the potential liability if the purchase completes on the back of inaccurate information provided by the agent. Some managing agents are threatening to give vague responses to reduce the time taken to complete a legal pack.

    So how can Dwellant help?

    Managing agents streamlining their processing of legal packs is more important than ever. From solicitors requesting a pack and paying the fee, through to the managing agent answering the questions, finding the accompanying documents and sending all off/confirming receipt, all takes time and effort to ensure completeness and accuracy.

    Dwellant has intelligent LPE1 and LPE2 templates built into its platform. The LPE questions are answered directly onto the template in the prescribed format and all responses are saved ready for the next property to be sold in that block.

    All documents to accompany the responses are saved on Dwellant too which speeds up the completion of the legal pack and ensures key documents about the property (e.g. service charge accounts, insurance schedule, subletting procedure, mem and arts) are always immediately available, not just when a legal pack is needed.

    Once the answers have been entered into the Dwellant LPE form and an electronic list of accompanying documents is selected, the click of a mouse means the solicitor receives ONE link to read the answers and download the documents. Nothing sent in the post, no emails with multiple attachments that are too big to deliver, and you have proof that the solicitor has been sent and has received and read the answers.

    The £200 cap can only give the managing agent a profitable transaction if the responses and attachments are accurate and they are provided fast. Dwellant’s online legal pack facility does just that.

    For a 15 minute online demo of our legal pack feature, call me on 020 3637 5545 or drop me an email on