The need for speed: How to reduce transaction delays

By

Daniel Curtis MSP Capital

Navigating the complexities of property development transactions can often feel like a high-stakes race against time.

Delays can cost not just time but also impact the financial viability of your projects.

I’ve worked as a solicitor within the finance and property sector for over two decades.

During this time, I’ve been actively involved in hundreds of cases, and have a clear view on the battle between wanting transactions to complete faster and facing avoidable delays – often due to a breakdown in communication.

There are plenty of stages at which a lending transaction can be delayed. However, a large proportion of these can be controlled by the borrower themselves, or their solicitor.

Below are some essential strategies that will avoid delays in your future transactions.

Engage early to leap ahead

Start discussions with your solicitor early. One of the most common pitfalls in property transactions is the delayed engagement of legal counsel.

Before every transaction, solicitors will need to complete their own due diligence, which can take one to two weeks.

This becomes worse if you’ve not used this solicitor before. Engaging your solicitor during the negotiation phase, before you sign any offers of finance, can streamline the entire process and avoid unnecessary delays.

Immediately returning the engagement letter upon receipt is another simple action that can kickstart legal procedures and save valuable time.

Many borrowers wait until they have signed their offer of finance before engaging with their solicitor, to avoid wasted costs.

While it’s natural to be worried about potentially wasted legal fees if the transaction doesn’t go ahead, you might be surprised that these often don’t outweigh the delay costs associated with a clunky and slow transaction.

If you’re concerned, then you could seek to agree to cap or minimise costs with your solicitor if the transaction doesn’t proceed.

Beginning the investigation

Start preparing legal documents promptly: Encourage your solicitor to start assembling the necessary documentation even before the engagement letter is officially signed. 

This pack takes a while to put together so the sooner it’s finished, the sooner the funder’s solicitors can begin their review.

Request searches as soon as possible: Property searches are notorious for creating delays – typically taking 4-5 weeks to complete.

Often borrowers wait a couple of weeks before instructing the solicitor to make the search requests.

Asking for the searches to be applied for as soon as possible will mean you can better manage timelines and expectations.

Essential information to share earlier

Proactively sharing information during a transaction, instead of waiting to be asked for it, can significantly speed up timelines.

Here are seven extra information requests I see frequently, which always delay timelines:

  • Legal issues including historic covenants. Early disclosure of these issues allows your solicitor to resolve them quickly – usually through purchasing insurance policies against the risk.
  • Consent from the landlord. Should the property lease have provisions that need to be complied with when the lease is changed, you will need to gain permission from the lease landlord, which takes time.
  • The planning history of the property. Any funder will want to review this, so compiling it at an early stage will speed up the transaction.
  • Occupation status checks. Providing a comprehensive list of all property occupants can smooth out the review of tenancy agreements and occupation terms – something that all funders will need to do.
  • Company name changes. When Land Registry entries differ from details held at Companies House a transaction can be delayed as additional checking and sign offs will be needed. Being open about this at the beginning will really help.
  • Foreign registered borrowers.  It is important that such borrowers instruct their solicitor early, as solicitors based in the foreign jurisdiction will need to provide opinions on the legality of any proposed transaction.
  • Licensed properties.  Properties such as pubs will need to have the licensing checked to ensure it is fit for purpose.

 

Communication with your new, outgoing and existing lenders

Be on hand to answer questions and enquiries. As part of the process of reviewing the lending pack, your new lender’s solicitors will raise enquiries with your solicitor.

If replies to these enquiries are delayed, it can have a knock-on effect on the rest of the transaction.

Your new lender will require information on how the property is to be insured. They will often have a range of requirements relating to the property’s insurance.

Altering the policy will require interaction from the insurer or the insurance broker, which can take time.

Getting your solicitor to proactively ask about insurance requirements early on means you can go about meeting those requirements sooner rather than later.

Communicate with your outgoing or existing lender about the transaction. This includes organising the discharge from an existing lender or gaining consent from the first-charge lender for a second-charge to be applied.

Although there are often tactical reasons to not engage early on with other lenders, this can significantly delay the transaction if only begun towards the end of the process.

Sign on the dotted line – the final hurdle

Use electronic signing as much as possible. The signing of the final set of documents (known as the “engrossments”) is another area where I often see significant delays.

Insist that your solicitor uses electronic signing to help speed up the transaction from both sides.

Book the pre-signing meeting well in advance. If you would prefer to meet your solicitor in person to review the transaction or lending documents before signing, booking this meeting far in advance avoids any delays caused by diary clashes or holidays.

Conclusion

In the fast-paced world of property development, efficiency isn’t just nice to have – it’s essential for staying ahead of the curve.

By adopting these streamlined practices, you can minimise delays, maximise profitability and maintain a competitive edge.

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