Purchasing a house is a process that can take too long, especially since many parties are involved. One example of this is the solicitors, who must draft and then transact the sale and transfer of property.
Solicitors tend to take a long time to draft the contracts, including lengthy discussions with the parties involved. Conversely, if the property is being transferred between families or relatives, they will have more calls and meetings to conduct. For this reason, contract exchanges between solicitors take too long. Additionally, solicitors will require certain formalities to be completed according to the law that can cause delays in the process.
This article will discuss how particular processes can impede on solicitors’ side and what can be done to move things along. Read on below to get started.
The Role of Solicitors
The role of solicitors is to ensure that all the parties involved in a transaction are protected. One thing that happens often is that one of the parties involved does not get what they're entitled to, so they can approach the court for resolution.
Thus, solicitors try to ensure that there are enough clauses and provisions in the contract that address every party’s issues. It's only through this that everyone will be satisfied, or the solicitors will be in trouble.
A section of any contract that involves property transfer will include the solicitors’ fees. Thus, if a party wants to transfer the property to another party involved, they will be required to pay the solicitor’s fees.
Contract Exchanges
When a contract exchange is conducted, the contract has been finalised, and all parties involved have signed it. This means that the property is about to be sold or transferred.
However, exchanging contracts does not mean that the property has been transferred or sold. That only happens after the solicitors’ fees, the stamp duty, and other taxes have been paid.
When the contract exchange is done, the person buying the property will get the contract, and if they are ready to transfer the property, they will sign the contract and get it stamped. If they aren't prepared to transfer the property, they will seek the legal advice of the solicitors before accepting it.
How Long Do Solicitor Searches Take?
A search is a document that contains the necessary information about a person, including their full name and identification number. When one of the parties involved in the transaction has already owned the property, a search will ensure that they are the owner.
It's worth noting that each county keeps their public records in different places in the UK. This means that a search document from one county will differ from the one obtained in another. A search will also be done on the property’s title, including the year in which the property was built, who used to own it, and who owns it currently.
With that said, an exchange of contracts requires the exchange of Searches. However, depending on the solicitors, a search can be about a week or more.
How Does an Exchange of Contracts Affect the Timeline?
The timeline of a house purchase transaction is different from that of a typical transaction due to the number of parties involved. Once the contract has been signed, it will take some time for the two solicitors to proceed to the next phase.
Once the exchange of contracts has been done, the seller will have to wait for the buyer to get their solicitor to sign the contract and then stamp it. After that, the seller will have to get the receipt from the buyer’s solicitor and pass it on to their solicitor.
Only then can the seller get the money from the buyer and proceed with the completion of the sale. The time for this process to be completed can be a few days, or it could go up to a few months.
Factors That Could Delay an Exchange of Contracts
Different factors can potentially delay the exchange of contracts. These include:
Complex Transactions
Contract exchanges in complex negotiations may take a long time. This is particularly true if complex agreements need to be made. Such negotiations include those involving businesses, joint ventures, and even the sale of a partnership.
Unanswered Enquiries
When an enquiry has not been answered, that could be another roadblock to exchanging contracts. The solicitors will call the parties involved and request the needed information, but if the enquiry has not been answered, that could delay the exchange.
Slow Buyers or Sellers
If the person buying the property or the property is slow, contracts could be delayed. This is because the property needs to be transferred to the buyer before proceeding with the signing of the contracts. Thus, if they aren't ready, the exchange will be delayed.
Slow Searchers
On the other hand, if the person searching is slow, this could delay the exchange because the seller will need the information in the search before proceeding with the property transfer.
Mortgage Lenders
Suppose the buyer has a mortgage and needs the mortgage lender’s approval before proceeding with the exchange. In that case, there will be a delay in the process because the lender will want to review the contract and the buyer’s finances to see if they will qualify for the mortgage.
Overworked Solicitors
If the solicitors are overworked and short on staff, that could also delay the exchange. However, solicitors are usually aware of their staff’s workloads and can plan the work accordingly to ensure that the exchange will not be delayed.
What to Do If the Buyer or Seller Delays the Exchange of Contracts
If one party delays the exchange of contracts, another party could go to court for resolution. This is because all the parties to the agreement must adhere to certain timelines specified in the contract. If the deadlines are not met, the party can get the court involved and order them to comply with the agreement.
Some court orders could include:
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Ordering a party to pay the solicitors’ fees
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Ordering the party who has delayed to pay the costs of the other party
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Ordering both parties to pay the solicitors’ fees and the costs of the other party
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Ordering all parties to pay the solicitors’ fees
What to Do If the Solicitor Delays the Exchange of Contracts
If the solicitor delays the exchange of contracts, the buyer or seller can get the law involved. They can notify the court that the exchange is being delayed. The court will then direct the solicitor to proceed with exchanging contracts.
If the solicitor does not comply, the court can order the solicitor to pay for the costs of the buyer or seller. The solicitor will also have to pay the legal costs of the court and the party involved.
Conclusion
The role of solicitors is to ensure that all the parties involved in a transaction are protected. One thing that happens a lot is that one of the parties involved does not get what they are entitled to. They can then approach the court for resolution. As long as everything is done in due process, there will be little to no problems.
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