The need for speed: How to reduce transaction delays
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, writes Daniel Curtis, MSP Capital's Head of In-House Legal.
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 break down in communication.
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 break down 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.
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.
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 to 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, can mean 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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