“Bugbear” Definition: a cause of obsessive fear, anxiety, or irritation.
To a conveyancing practitioner, the notion of “settlement is delayed” conjures up a cold sweat. Obsessive fear that the settlement won’t go through in time, anxiety about informing the client that they will need to pay more for their removalist van to wait, and irritation that the perfectly well-organised settlement now must be re-worked! Undoubtedly a “Bugbear”!
Common Reasons for Settlement Delays
Late actions or documentation
A failure of one party to the transaction to be ready for settlement or to take a step that another party needs to occur for them to be ready is a very common reason for delays. Many delayed settlements are a result of a financier or practitioner being late in performing an action or being unable to perform an action as they are waiting on their client or another party. Electronically, for some parties it has become habitual to wait until the last minute to perform an action, given that they need to be in the workspace checking the transaction is on track before it locks. The effect of doing this impacts all other parties in the workspace and is more likely to result in a delay.
It can be helpful to keep the lines of communication open between all parties and to complete tasks on time. However, this situation can still occur despite your best efforts.
Sometimes a small mistake can cause a big delay. It could be a typo, forgetting to complete an action like a VOI or CAF or inviting a bank to a workspace. It’s important that all parties adopt processes and use templates to ensure that i’s are dotted, and t’s are crossed.
Process failures can be prevented by planning. This includes ensuring that your templates are up to date, recording time frames in which tasks need to be completed, having a colleague run a second set of eyes over a matter, or having a checklist.
Clients Being Unaware of Deadlines
Many practitioners try to take the burden of the conveyance off their client by making it as streamlined as possible. It’s their job to do so!
However, clients may be blissfully unaware that there are urgent steps they need to take. It’s all there in your first letter to them, but life gets in the way and they are excited about their new acquisition, so chances are they have not taken it all in.
By having a clear conversation or providing clear dot points to your client about the most critical steps they need to take, for example, complete your discharge of mortgage now or keep an eye out for mortgage documents and action them right away, some of this pain can be alleviated. It’s about priorities, and sure furniture shopping is fun, but they need the home to put it in!
Final Inspection Issues
All conveyancing practitioners have been there on the day of settlement, and they get a call from their buyer frustrated and annoyed. The oven isn’t clean or there is rubbish left behind or worse the owners are still in the property and don’t look to have plans to vacate at all!
It can help to ensure that your vendor client is aware that they need to vacate the property and present the property in the condition the buyer bought it in and that the Buyer has a right to inspect prior to settlement.
It’s also important to inform your Buyer clients that they must act reasonably and that minor items such as an unclean oven don’t allow them to pull out of the contract.
Ways to reduce the risk of settlement delay
Checklist for success (eliminate the bugbear)
Be organised. Do as must as possible at the start of the transaction to organise yourself and your client . Make sure you both understand the finer details and the time frames in which steps need to be taken.
- Get on top of it early
Ensure you establish with your client where the funds are coming from or going to. Obtain account details and “read out, read back” any they provide to you.
Keep banks, other sides, real estate agents and clients informed. Never be afraid to question or to provide an update for fear of being annoying.
Check for typos, re-calculate figures, seek a second set of eyes and ensure the many tasks are ticked off. Raise any discrepancies as early as possible so the issues can be fixed in time.
- Technology is your friend!
Consider software tools. Ensure you are aware of the most up to date software in your area of practice and don’t be afraid to incorporate new methods into your practice.
Be reasonable and where it is in their interests, encourage your client to be also. An extension of day or two may be inconvenient, but the alternative may be costly and stressful Supreme Court action.
We want to help!
Sympli is working hard with all conveyancing stakeholders to deliver an e-settlement solution that works to assist the user in completing transactions on-time. This has traditionally been a “bugbear” of conveyancing. It doesn’t mean that it needs to be in the future!
Please feel free to provide feedback about your specific needs and challenges and what features or tools can help assist you. Contact us