How to Avoid Problems with Property Chain Transactions?

In todays Property Guide our Residential Property Expert Theodora explains how to avoid property chain transaction problems.

A property chain is generally  when you are buying and selling at the same time. A longer chain is when you are buying and selling and your buyer is also selling and/or your seller is also buying and it can be even longer than that.

There are certain matters which are worth considering to enable the chain transaction to move as smoothly as possible. I have set these out below:-

1. Capacity and Communication - before you consider instructing a solicitor or legal representative, always ensure that your solicitor/legal representative has capacity to take on your case. You need to feel reassured that your solicitor/legal representative will dedicate time to your case and reply to your emails, queries and deal with correspondence in a timely fashion. If you are in a property chain, you will need a solicitor that can lead a transaction and be available to liaise with the other solicitors in the chain, have good communication with the estate agents and follow up regularly.

2. Involve yourself in the process - try to  keep up the communication with your estate agent and your solicitor/legal representative. Do not delay replying to your solicitors’/agents’ queries, completing requisite documentation and signing documentation. If your solicitor/legal representative needs monies on account to pay for searches arrange payment to ensure the searches are applied for promptly.  If possible, also try to keep up the communication with your seller or buyer as collectively you can play a part in ensuring everyone is communicating collectively allowing you to meet the deadline for exchange and completion.

3. Information -your Solicitor should obtain as much information as possible from the outset of the transaction regarding the proposed exchange and completion dates that the rest of the chain will be working towards. The chances are the whole chain will need to match the exchange and completion dates throughout, and so it is important that there is an agreement in respect of dates. You don’t want to find out just before you are ready to exchange that one party in the chain wants to complete two months after exchange when you want to complete within one week of exchange!

4. Breaking the chain - notwithstanding that some parties start the process by being part of the property chain, it is possible that some parties may be willing to break the property chain and move into rented accommodation or move in with family thus allowing the rest of the chain to proceed with exchange and completion.

5. Minimise delays - a possible problem area can arise at any stage of the conveyancing process and your solicitor will need to address these problems immediately as a delay will inevitably cause a delay throughout the chain and possibly result in a chain collapsing. Most problems are resolvable quickly, however, if something does take longer to resolve, the quicker the problem is identified then the earlier it can be resolved.

6. Mortgage - if you need to arrange a mortgage speak to your mortgage advisor or lender at the outset of the transaction to ensure you can get a mortgage. Your solicitor or legal representative will only be able to exchange once in receipt of your mortgage offer. Property chains are often delayed due to a solicitor having to wait for a mortgage offer before they can exchange.

7. Source of Funds - under the Money Laundering Regulations 2017 and company policy, your solicitor/legal representative must investigate the source of all funds coming into their possession, and as such, will need to see evidence of the funds which are been used  for your purchase. If you are selling as well as purchasing, the monies for your purchase will most likely come from your sale, but your legal representative will check this, however, if you are purchasing for higher than you are selling your solicitor will need to see further evidence of source of funds and so you should ensure you have this available to avoid delays in obtaining the information which will delay the process.

8. Leasehold Properties - when selling a leasehold property, ensure that you pass details of the landlord/managing agents as quickly as possible to your legal representative and if required, pay for the leasehold pack promptly. Some managing agents take several weeks to reply to leasehold enquiries and therefore a delay in paying for the leasehold pack will result in a delay in obtaining the replies. Do bear in mind that once the buyers solicitors receive the replies to leasehold enquiries they will also need to review the paperwork and report to their client and possibly also need to raise subsequent leasehold enquiries so therefore the earliest these matters are dealt with the better.

9. Paperwork - if you are selling a property and you have carried out alterations to the property, ensure that any consents for alterations which you have obtained from the council or from the landlord (if the property is leasehold) are passed to your solicitor/legal representative. You should also ensure that guarantees and warranties, gas and electrical certificates (where applicable) are passed to your legal representative. If your legal representative is able to pass a complete pack to the buyers solicitor then the buyers solicitors do not have to chase for the paperwork.

The above is not an exhaustive list but provides some guidance to avoid delays with property chain transactions. If you would like to know more then please contact Theodora Michaeloudis who will be happy to advise.

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