Conveyancing Transactions with Exchange and Completion Deadlines
Buyers and sellers almost always want conveyancing transactions to go through as quickly as possible. Sellers are keen to get their money and buyers are keen to move in. There are some occasions however where there is a more serious deadline, where either buyer or seller could suffer loss if the deadline is not met.
These situations include buying a repossessed property, buying a new build property from a developer, buying a property which is at risk of being repossessed or where the buyer will become homeless by a certain date.
New Builds and Repossessed Properties
The most common reason for a deadline is if the property is a new build being sold by a developer or if it is being sold be a lender who has repossessed. With a new build, a developer will often offer an incentive to exchange contracts by a particular date, typically 28 days from contract papers being issued by the developer’s solicitors. In addition the buyer will usually pay a “reservation fee” which, if the contract is not exchanged by the deadline, the developer can retain while being free to sell the property to someone else.
When buying a repossessed property the lender wants to get rid of the property as soon as possible and will usually set a 28 day deadline (sometimes even shorter where the buyer is a cash buyer). In addition they will usually not take the property off the market until exchange which means the longer the transaction goes on the more chance there is of another buyer coming in with another offer.
If another buyer does come in then the previous one will lose any search fees, survey fees and potentially mortgage arrangement fees he has paid.
Choosing a Conveyancer Who Can Meet a Deadline
No conveyancer can guarantee that exchange or completion will take place by a particular deadline right at the outset as there are too many factors which are beyond his control, so when speaking to conveyancers discount any that say they can – if they start off by making promises they don’t know if they can keep then you may not be able to trust them.
What a conveyancer can guarantee is that he will do everything within his power to meet the deadline, but what does this actually mean?
What can a Conveyancer do to meet a deadline?
The most important thing a property conveyancer can do is to ensure that all correspondence is dealt with on the day it is received and that where possible, it is responded to by fax or e-mail.
Many conveyancers will not report on the title to a buyer until all of their enquiries are answered and all of the search results are received.
The problem with this approach is that should you have any further enquiries you wish to raise as a result of the report you will not get the opportunity to do so until several weeks into the transaction, which will inevitably cause delays. Some conveyancers will provide an initial report, on the title and on the seller’s answers to the property information form and fixtures & fittings list, and will then provide a final report once they have the results of searches and answers to enquiries. It can also help to avert delays if the buyer is asked to sign the contract at an early stage rather than just before exchange of contracts which is more usual. The final report can then be delivered and approved by e-mail if necessary.
Searches and Indemnity Insurance
There are three property conveyancing searches which most conveyancers will do in respect of every purchase. A drainage and water search, an environmental search and a local authority search. There are others which may be done depending on the location of the property.
The drainage and environmental searches will usually be done online and the results returned within a few days or even a few hours. The local authority search takes longer. It can be done it two ways, either direct with the local authority or via a personal search agent. Personal searches are often returned quicker, though their results are not always completely reliable which puts some conveyancers off using them. Where time is of the essence however a conveyancer should check with both a personal search agent and the local authority to see which is likely to return the result more quickly.
It is possible (subject to the mortgage lender in the case of a mortgage assisted purchase being in agreement) to obtain indemnity insurance instead of ordering a search. This will provide the buyer and lender with cover in the event that something which would have been revealed in a search had one been done causes loss. This is risky but can make the difference between meeting a deadline and not.
Instructing a Property Conveyancer
At the outset, before instructing a conveyancer, you should ask the firm to confirm, in writing or via e-mail if possible, that they will do all of the things mentioned above in order to give you the best chance of meeting the deadline. This will often go above and beyond the level of service you could normally expect therefore you should expect to pay more than the standard quote. Any additional fee should be agreed beforehand and should be a fixed amount.
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