Once a seller has accepted a buyer’s offer for the property, the legal process starts. In summary, it involves the following stages:-

Pre-contract: This is when the investigations into the property are carried out.

The seller produces up-to-date information about the recent use of the property, any building or similar works that have been carried out, and the items included in (or excluded from) the sale.

This involves completing some standard forms, which are then sent to the buyer’s lawyer for checking – firstly, against information from other sources, such as their search results, information provided by the buyer and their own local knowledge to check on accuracy; secondly to ensure that any defects are dealt with to protect the buyer.

In addition, the buyer’s lawyer will submit a range of searches to various authorities, consider the results, and deal with any problems that are revealed.

This is also when the buyer needs to sort out the mortgage loan and any other finances required for the purchase, and the buildings insurance cover – see below.

It is normally on exchange of contracts (also called “exchange”), not on completion, that the insurance risk in the property passes to the buyer – if the property is destroyed between exchange and completion, the buyer is still legally obliged to complete the purchase.  As a result, it is vital that the buyer’s buildings insurance cover for the property is in place at the time of exchange – contents insurance can be put in place on completion, when the buyer’s contents are moved into the property.  As the buildings insurance cover must satisfy any mortgage lender’s requirements, it is important to set the cover up, ready to be put into effect on exchange, well before contracts are actually exchanged.

Exchange of contracts: This is the point at which the buyer and the seller (and their own buyer and seller, if any) are legally committed to the transaction and the date for completion (see below) is fixed.

It is vital that, before contracts are exchanged, all the pre-contract work has been completed – any unresolved problems will, sooner or later, come back to haunt the buyer – and that the buyer’s financial arrangements are in place.

Once contracts are exchanged and a completion date fixed, the buyer should put the new buildings insurance cover into effect and both parties can safely commit to removals and other completion arrangements.

Between exchange and completion: Getting the ducks in a row!

The time between exchange and completion is not wasted – it is the period during which the buyer’s lawyer obtains the mortgage money and the buyer’s money for completion, prepares the Transfer document by which ownership of the property will be transferred, carries out final searches (to ensure, for instance, that the seller has not recently created another mortgage over the property) and agrees the completion arrangements with the seller’s lawyer.

The seller’s lawyer obtains a redemption statement for any mortgage affecting the property, gets the seller to sign the Transfer and agrees what is to happen to the sale money.

The buyer and the seller need to make removal arrangements, arrange for service meters to be read, notify change of address, etc.

It is well worth having at least a fortnight between exchange and completion, to ensure everything is in place for completion – last minute panics are stressful and expensive for all concerned, and a failure to meet the completion date can have even worse consequences.

Completion: The day of the move has (at last!) arrived.

This is the day, which must be a day when the banks are open – no completions at the weekend, yet – when both the money and the property change hands.

If either buyer or seller is unable to complete (for instance, the buyer’s money is not ready, or the seller has not made removal arrangements in time) they will be liable to compensate the other for most losses that result.

If all the preparations have been carried out properly, completion should go reasonably smoothly, though the parties and their lawyers are dependent on the banking system working smoothly.

Unless there is an exceptionally long chain involved (see below) one can normally expect to be able to move in (assuming the seller has moved out) by about midday or so.  See my separate note giving more details about the procedure on completion.

Post-completion: The work is not “completed” at completion

After that day, the seller’s lawyer must redeem any mortgages over the property, pay the estate agents’ account and send the sale proceeds to their destination.

The buyer’s lawyer will be submitting the Land Transaction Return to the tax authorities, paying any Stamp Duty Land Tax that is due, then registering the Transfer and any new mortgage at the Land Registry.

These aspects can take days or weeks, depending on circumstances – in particular, on how efficient the mortgage lenders and the Stamp Office are being – but goes on in the background, without usually involving the buyer or the seller directly.

Once completed, the lawyers will report that fact to their clients, then close their files – from their point of view, that is the real “completion”!

Synchronising a sale and a purchase

Even a single sale and purchase of just one property will take some time to complete. Normally, a period of two weeks to deal with the pre-contract work would be about right, and completion two weeks after exchange would be sensible. Though a transaction can, if required, be completed quicker, a four-week period is a good rule of thumb – assuming that no mortgage loan is needed or that getting the mortgage offer does not itself cause any delays.

If the buyer has to synchronise his or her own sale, or the seller has to synchronise his or her own purchase, then this provides scope for more delay – simply because there are more people involved and consequently more actions to undertake.  Quite apart from anything else, getting two, three or more transactions ready to exchange contracts simultaneously takes some organisation – and getting three or four parties to agree on a single completion date, after taking account of work commitments, holidays, availability of removers, etc, can be a very time-consuming process.

It is a good idea for the parties to try to agree a realistic completion date fairly early on in the conveyancing process, if only to try to focus everyone’s minds – aiming to complete (say) 2 months after the chain is complete and each party has instructed lawyers would be sensible.  Most agents are fairly good at liaising with the other agents involved in the chain of transactions, and getting a completion date agreed by all parties and their lawyers.

Mortgage money

If a buyer needs a mortgage loan in order to buy a property, that involves a procedure of its own: selecting the lender and loan product, applying for the loan, giving proof of income, getting the property valued, issuing the mortgage offer.  That process usually runs at the same time as the pre-exchange legal work.  If it is slow or problems arise, this will inevitably delay exchange of contracts.

The “chain gang”

The problems of synchronising transactions are multiplied with each additional transaction in the chain: the longer the chain, the longer and more complex the process of getting it all organised. Each individual link in the chain can, usually, be trusted to deal with their own responsibilities reasonably promptly – though some do need occasional (or frequent) chasing.

Any problem anywhere in the chain will delay the whole chain until it is sorted out – by which time other problems may have arisen elsewhere: a mortgage offer may have expired, or a search result become “stale”, for instance, and need to be renewed – or someone may have become so fed up that they have simply withdrawn from their sale or purchase.  To minimise the risk of this, it is normally sensible to communicate openly with the other parties involved; even if you have a problem, such as your buyer dropping out, it is usually better to tell your own seller about this, rather than hide it – being secretive tends to breed mistrust and to backfire.

The single most effective way of speeding up the conveyancing process in the majority of cases would be to abolish the chain of transactions, so that no sale was synchronised with the purchase of another property.  This is unlikely to happen, as most people are, understandably, reluctant to incur the cost and inconvenience of moving out of their home into rented accommodation, then out of rented accommodation into their new home.  Though more and more people are prepared to do that, it is still only a minority of cases.  For the foreseeable future, we are stuck with the chain.

In those circumstances, there are a few ways of trying to speed up the process, though they will not make a dramatic difference overall -

Providing and obtaining information

Sellers can help by promptly completing and returning the property information forms. Sellers’ lawyers can help by checking those forms and plugging any gaps without waiting for the buyer’s lawyers to spot the gaps for them. Buyers’ lawyers can help by getting initial searches submitted without waiting for contract papers to arrive and by not raising inappropriate enquiries – on points that are best answered by the buyer and seller discussing direct or by arranging a survey.  Everyone can help simply by communicating with each other and being proactive.

Law Society’s National Conveyancing Protocol

Some years ago, the Law Society introduced a standard procedure for residential conveyancing, standardising the documents to be used, the information to be supplied, the procedures to be followed, etc. The intention was to minimise the to-ing and fro-ing involved in the process, so that the time taken to get ready to exchange contracts was minimised.  The attempt succeeded very well initially, but has started to break down – partly for good underlying reasons (eg: insisting that the insurance risk in the property passed to the buyer on exchange, not on completion) and partly not (eg: asking non-conveyancing additional enquiries that could more efficiently be dealt with between buyer and seller direct).  Even so, the system is a vast improvement on the previous fragmented procedures

Home Information Packs (HIPs)

These were an attempt to take the idea of the Protocol further, by “frontloading” as much of the legal work as possible.  Now that they have been abolished, however, we are back to the old system of searches, etc, only being made once a buyer is found for the property.

Telescoping the stages

It is very common to telescope the pre-contract stage and the exchange to completion stage, dealing with as much of the pre-completion work as possible before exchange of contracts.  Even if there is plenty of time between exchange and completion, the more that is done before exchange, the less chance there is for nasty surprises and delays.  However, this is not a cure-all: most good lawyers already do this as a matter of routine, anyway.

Cooperation

Some lawyers seem to treat a transaction as an opportunity to score points off their opposite number, rather than trying to get the deal done. In these cases, a good estate agent, with a strong working relationship with the lawyers involved, can perform a very useful role in identifying sticking points and their causes, ensuring that lines of communication are kept open, and generally making sure that a transaction is not allowed to languish.