The abrupt closure of PM Law Group has left thousands of property transactions in limbo after the conveyancing firm ceased trading without warning to staff or clients.
Mortgage Soup reported last week that the firm, which acted for buyers and sellers across England and Wales, stopped operating on Monday, 2 February. Staff were reportedly given no prior notice and are unable to assist those affected.
The Solicitors Regulation Authority has since intervened, taking control of all paper and digital files, along with client and office monies held by the firm. An investigation into the circumstances surrounding the collapse is now under way.
SIGNIFICANT DISRUPTION
While regulatory interventions are uncommon, the impact on the housing market is expected to be considerable, particularly for transactions close to exchange or completion.
Under the SRA’s intervention process, client money is transferred into a statutory trust while ownership is established and decisions are made on whether funds can be returned or applied for their original purpose, such as completing a property purchase. Where funds cannot be recovered, eligible clients may apply to the SRA’s compensation fund.
The SRA’s appointed intervention agent, Gordons LLP, is contacting clients with urgent or imminent completions as a priority. In exceptional cases where completion is only days away, emergency action may be taken, although most clients will need to instruct a new conveyancing solicitor to progress their transaction.
HOME BUYING & SELLING COUNCIL
The Home Buying & Selling Council said buyers whose transactions had not yet exchanged contracts are likely to experience the least disruption, particularly where only limited funds have been paid.
However, those who have already exchanged and lodged deposits may face delays of several weeks while funds are traced and reconciled.
The closure is also expected to affect entire chains, with transactions stalling as new legal representatives are appointed and mortgage funds accounted for.
Remortgage borrowers whose lenders have already released funds are being advised to contact their lender or broker to confirm whether their previous mortgage has been redeemed. Completed transactions may also be affected where registration at HM Land Registry has not yet been finalised, requiring new legal representation to ensure title is properly recorded.
The Council said it has briefed lenders, estate agents and removal firms, urging flexibility and patience while the regulator works through what could amount to thousands of disrupted moves.
The SRA has warned that high call volumes are expected and that urgent cases will be prioritised.
