Farrer & Co's Residential Property partners address five practical questions from industry professionals about common challenges in residential conveyancing, including lender red flags, title complications, site visit value, transaction delays, and the strategic use of indemnity insurance in property deals.
In each edition of The Brief, the Farrer & Co Residential Property partners give us a brief insight into their working lives. This month, we provide answers to a selection of recent questions put to us by friends across the residential property sector, exploring common risks and practical considerations that arise during the conveyancing process.
We are always happy to speak to clients and intermediaries on a speculative basis – this month we have answered five questions we were recently asked. Thank you to those who raised the questions. You can either watch the video or read the transcript below.
What are common lender red flags that an estate agent can spot early on?
Asked by Matt Southall, Watling Real Estate
On the seller's part, this can include issues such as short leases, works that do not have the proper consents, as well as construction or access issues. On the buyer's part, things such as gifted deposits, an unusual anti-money laundering (AML) profile, or the use of overseas funds can trigger additional checks.
The good news is most issues can be resolved, but the key is identifying them early so that solutions can be considered in good time.
How useful is a site visit from a solicitor?
Asked by Will Bouma, Will Bouma Business Development
It depends entirely on the property. Site visits will be particularly useful where they can identify issues that simply do not appear in the documents.
For a country house, a site visit may identify access rights that we did not know about, and buildings that exist or do not exist, which we would not have been able to see from the title pack itself.
In London a site visit might identify under pavement vaults or issues in relation to building works that would not be apparent from the documents alone.
Most transactions do not need a solicitor on site, but where a property is unusual, high value or has potential quirks, seeing it in person can be valuable, and it is always a treat to see the agents involved in the transaction!
What title issues most often lead to delays?
Asked by Russell Smithers, REDD
Anything that requires third-party consent or that involves someone outside of the transaction can lead to a delay.
For example, if you have restrictions on title; or overage provisions or similar; or landlord consents, where someone not directly involved in the transaction needs to input to deal with, it is likely to cause delay unless the seller is very well organised and has addressed the issue in advance.
What is the biggest killer of deals?
Asked by Chris Lloyd, Enness Global
Surprisingly, the biggest killer of deals is rarely legal issues. It is often a mismatch of expectations between a buyer and a seller, or a lack of clear communication, or time.
Time can mostly be managed if there is clear communication. Where a buyer and seller have differing expectations, or communication is unclear, that is where most problems arise.
When is indemnity insurance worthwhile and when is it not?
Asked by Daisy Page, RFR
Defective title indemnity insurance is widely regarded as the aspirin of the property world. It is cheap, available and people think that it can cure everything.
The issue is that while it offers financial compensation for loss of value, it cannot necessarily protect what is important to buyers, and it is not always available.
To summarise, it is a very useful tool in a lot of transactions, but it cannot be regarded as a universal cure for every ailment.
The debrief
If you have enjoyed this edition of The Brief and have a question you would like us to answer in a future edition, we would be pleased to hear from you.
We are always happy to discuss the conveyancing process and how to manage a transaction.
This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
