One of the most frustrating issues with buying and selling a house is just how long the process takes from putting in an offer that's accepted to the completion day.
Homeward Legal has talked about this before, highlighting the fact that how long conveyancing takes can stretch to three or four months, with many transactions increasingly taking even longer. We have also highlighted the fact that there are several different organisations involved, but, since most of the work to get to exchange of contracts is funnelled through the offices of the conveyancing solicitor, it's very easy to point the finger at the solicitor as the culprit for the extended time it takes.
There is more legislation that has been brought in to protect both the buyer and the seller, to ensure there is no identity fraud occurring, and that money laundering is successfully prohibited (since the size of the financial transaction is so large).
But it's the number of tasks associated with the detail of the property purchase that is becoming bogged down and adding further time to the transaction.
Why property searches slow down conveyancing
To protect yourself as the buyer, your conveyancing solicitor will order a set of standard searches — enquiries made to the relevant authority to establish the current position of the home. Specifically, these are the Local Authority, Environmental, and Drainage and Water searches. In addition, and depending on what is found or what is known about the location, the solicitor may recommend taking out further searches, such as Chancel Repair, Flood Risk, Mining, and Ground Stability searches.
The problem with these searches is that it requires due diligence from the parties who will provide the answers. And the issue is exacerbated if they are inundated with similar requests for information. Staff shortages may come into the equation, too, all of which means that there is a considerable amount of time where the requests for the information are simply sitting there with nothing happening to them.
What is local search indemnity insurance?
So, you might be thinking, surely there is a way around this. And perhaps you've been contacted by specialist insurance companies, or have had their services recommended to you. One product that you might have heard of is the Local Search Indemnity Insurance policy (sometimes called the No Search Insurance policy).
The idea behind the policy is to help speed up the conveyancing process, by avoiding the long wait for the local authority searches to return the necessary information. Most often, this policy comes into its own for remortgaging purposes, but can also be used in cases where transactions are being delayed entirely due to waiting for the requisite information.
What does the policy cover?
Essentially, the policy covers you against any financial loss that has been incurred by adverse findings that would have been found during the standard local search process. The policy covers the difference in the value of the property that has occurred by something being later found, as well as any additional legal costs that have arisen from the problem.
It is usually taken out by the seller, as a one-off premium, in order to speed up the process and to maintain the involvement of the buyer.
Our guide to indemnity insurance for property buyers covers the broader range of policies available if you want to understand how search indemnity sits alongside other types of cover.
Where indemnity insurance falls short
However, it is not as straightforward as it might seem because lenders may refuse such an indemnity policy, preferring to see actual results from the tangible searches that have been performed — this is usually because the indemnity policy might not necessarily cover all of the problems that a standard search would reveal. It should also be noted that awareness of a problem at the time of the purchase of the property will invalidate the terms of the policy.
If you are concerned about search delays more broadly, it is worth asking your solicitor about Search Plus Protection, which offers a different approach to managing the risks associated with the search process.
Is it the right option for your transaction?
The frustration at the length of time a property transaction can take only adds to the stress of a situation that is already mired in pressurised worry, so it might seem that such a step would help remove at least some of it. But you need to step carefully before jumping into it. Talk to your solicitor, and talk to an insurance broker to establish whether this is a worthwhile avenue to explore.
Whether you are buying or selling, you'll want to ensure that you have a focused legal representative working on your transaction, at a value-for-money fee.
Our conveyancers at Homeward Legal will start work on your plans as soon as you agree to the quotation and appoint them to represent you. Call us now on to get your conveyancing quote started, or get a quick quote online.