The Home Buying and Selling Council has stepped in to help thousands of movers affected by the shock closure of PM Law Group, which closed its doors without warning, leaving buyers and sellers in limbo.
The Sheffield-based law firm – an employer of more than 600 staff offering personal injury, will and conveyancing services – stopped trading last week.
Since then, the Solicitors Regulation Authority (SRA), Gordons, a law firm helping the SRA, and the Home Buying and Selling Council have stepped in to give customers and mortgage professionals advice on what to do next.
Kate Faulkner, chair of the Home Buying and Selling Council, said: “Fortunately, this is a very rare scenario, but that’s not going to help buyers and sellers, lenders, brokers or other home moving services who are affected.
“However, there is a process in place. I am hoping that as the home moving industry now works so closely together, we have identified the key pain points quickly enough to help the SRA and Gordons get everyone’s purchase and sale back on track.
“I would like to extend an enormous thank you to everyone involved and especially for the amazing help and support being given to the employees who lost their jobs last week.”
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Swift intervention
After being alerted to the closure of the law firm, the SRA launched an immediate investigation and contacted the firm to make sure client interests were properly protected.
Following an initial investigation, the SRA decided to intervene with the group of around 40 firms.
This intervention means it has taken possession of all documents and papers held by the firm and money held by the firm – including clients’ money – and where a firm is still trading, it will close with immediate effect.
Sarah Rapson, chief executive of the SRA, said: “We have acted quickly and decisively to protect the interests of clients.
“The sudden announcement from PM Law that they had closed is troubling news and I fully sympathise with the clients of the firm. Many of those involved are buying and selling a house or dealing with personal injury claims. These matters can be stressful enough without the added complication of your solicitor’s firm closing during the process.
“While we cannot disclose information about an ongoing investigation, we are working quickly to gather all the relevant information and provide answers to those that have raised important questions about their ongoing matters with the firm.”
Help for borrowers and brokers
To help mortgage professionals and movers who are using the services of one of the firms in the group, the Home Buying and Selling Council has identified five likely scenarios and what action should be taken in each.
New instructions yet to exchange
In this case, only a small amount of money, or none at all, will have been paid out to the solicitor.
Borrowers should gather any emails, letters or documents they have received or exchanged with the solicitor, instruct a new firm to act for them and explain the situation.
Once a new firm is instructed, the borrower should email pm@gordonsllp.com with their name, contact details, which PM Law firm was representing them and what for, any reference number they have and the contact details of where they want their file to be sent.
If money is owed – for example, for searches – movers can make a claim through the SRA.
This will take time, so if borrowers can afford to proceed, they are advised not to wait for the money back before they go ahead with their sale or purchase.
If borrowers know which search company was used, they should contact it directly. It may be able to provide the new conveyancing lawyer with the searches if they have already been progressed and paid for.
Cases close to exchange, or already exchanged, with deposit money paid
Currently, this money cannot be accessed. The SRA is working with Gordons, the intervention agent, to identify the files of clients who have handed over funds, which could take weeks or longer.
Agents will be prioritising identifying and contacting clients with the most urgent legal matters. In exceptional circumstances – for example, where the borrower is due to complete on their purchase or sale within days of the intervention – the agent may be able to act on the borrower’s behalf, at their discretion.
Someone in the borrower’s chain is using PM Law Group
“If money has been paid or a mortgage has been released, everyone involved may need to be patient while the SRA traces the funds, which could take weeks or longer,” said Faulkner.
Faulkner added that sellers who cannot wait indefinitely should speak to their estate agent to discuss options and weigh up whether they should restart their sale or wait for the SRA and buyer to resolve the issues.
Remortgages where funds were released by the new lender but completion hasn’t happened
Mortgage brokers should check if their client’s old mortgage has been paid off and if they could be temporarily liable for paying two mortgages.
Completed transactions awaiting registration
If your borrower’s sale or purchase has completed, you can support your client by checking if the property is registered with HM Land Registry in the new owner’s name or if there is a pending application. If it has not been registered or there is no pending application, the borrower will need to instruct a new conveyancer to deal with it and ask Land Registry to to update their records with an alternative law firm.
Getting back old documents
The SRA’s archive team will also take control of all documents relating to closed matters held by the firm, such as copies of deeds and wills. Movers who think they have old files held by one of these firms can fill in a form to request their return.
