We will be continuing to update this blog following the government’s advice to keep all information current, with the ever changing circumstances. The Coronavirus Job Retention Scheme The Coronavirus Job Retention Scheme will continue...
Buying a property - common problems with the delays in the chain
- AuthorBeth Abbott
A Chain Reaction in Conveyancing Transactions
When you sell or purchase a property, it may become apparent at some point during the transaction that there is a chain either above, below or both.
A chain will start with someone who is purchasing a property, with no property to sell; for example a first time buyer. The chain will then end with a seller who is not purchasing a property; for example if someone is moving into rented accommodation or selling an investment property. The links in the chain are made up of people in between who need to sell and buy a property.
The most common delay in a chain
The most common delay when buying or selling a property comes as a result of each link in the chain working at a different pace. Where a first time buyer may be very keen to return paperwork quickly, and put in hand their searches, some may require more time and assistance in completing these initial stages. The seller will usually have to provide a lot more information regarding the property than the buyer, and this can often take time to collate.
Property searches – delaying the chain
Each type of property search takes a varied amount of time to be completed, with some local authorities taking up to four weeks to return search results. You must also consider the time required for each purchaser in the chain to convert a mortgage offer in principle into a formal mortgage offer. With some lender’s underwriting teams, this too can take four weeks or more!
Once the searches and mortgage funds have been taken care of, it is then down to your conveyancers to ensure all legal enquiries are resolved and satisfactory. Should any concerns come to light when reviewing title deeds, the issues must then be reviewed, and in some cases, reported to the purchaser’s mortgage provider for further comment. This puts the matter back in the hands of that buyer’s lender for which turnaround can be up to 10 working days at a time which can be frustrating for all parties in the chain.
Key dates that might affect the chain
Delays can even be caused by smaller issues, such as someone in the chain taking a holiday. If you have a large chain, and two links take holiday at different times, this can then impact the proposed completion date.
How to avoid delays in the chain
It is important to advise your conveyancer or your estate agent of any key dates which may leave you unavailable during the conveyancing process so that the dates can be relayed throughout the chain at an early stage. It is also advisable that you ensure your finances are all in place, and that documents are completed in full and returned to your conveyancer as soon as you are finished signing them. It is also recommended in a larger chain that you keep conversations between yourselves as sellers and buyers to a minimum, relaying as much information through either the estate agents or conveyancers to ensure that any proposed timescales are accurate, clear, and achievable.
Sometimes in a very long chain, a party may decide to sell their home and not buy their new property at the same time; this is called “breaking the chain”. The person selling may be prepared to, and able to, live temporarily in a hotel, with friends or relatives and put furniture into storage until they can move into their new home.
You may not always be aware of the length of the chain at the outset of a transaction as often this information is only highlighted when one party is ready to exchange Contracts and other parties are not. If you know where you sit in the chain (which can be many transactions to which there is no limit) please pass that information on to your lawyer and to your Estate Agent, provided it is an Estate Agency that offers a sales progression service, as not all do. It is not normal procedure or “protocol” for Solicitors to speak with all Solicitors involved up and down the chain, only the lawyers on either side. Your Estate Agent will be able to speak to all other Agents in the chain to try to find out what the hold-up is and any suggested timeframes.