Risk management

Conveyancing time limitsThere is a general tendency among solicitors to assume that time limits only apply to litigation.

Not so.

Time limits affect all areas of law.

They may be contractual, regulatory, or statutory.

Many firms who operate both litigation and conveyancing departments have rigorous diary systems for the litigation department, however the conveyancing department will operate an ad hoc diary system, if they operate one at all.

Below are some examples of areas where critical time limits may affect a conveyancing transaction.

Exchange of contracts.

It is usual in the case of new properties for there to be a deadline for exchange of contracts.

Sometimes a deadline is imposed in a private sale, especially in an active market.

Terry and Margaret were buying a new property from a developer.

A four-week deadline to exchange contracts was imposed.

Their solicitor was ready to exchange, but failed to do so.

The property was still available to Terry and Margaret, but the price was increased by 10,000.

Their solicitor made up the difference with the help of his insurer.

Once contracts are exchanged, diarise the completion date and the date that all searches, statements and cheque requests should be submitted.

John, acting on behalf of a purchaser, overlooked the bankruptcy search.

He realised this after completion and hurriedly submitted one.

No problem; in eight years of conveyancing he had never had an entry which had related to his client.

Not so lucky this time, there was an entry and it did relate to the purchaser.

After completion has taken place, there are still time limits that have to be complied with.

The old favourite is failing to submit your application for registration within the priority period afforded by your Land Registry search.

When you receive your search back from the Land Registry, note the expiry date in your diary, and have a countdown to that date, two weeks to expiry, one week to expiry, and make sure that you react to the entry.

Do not leave it to the last minute.

Roger acted on behalf of a purchaser client and failed to submit his application within the priority period.

His client had resorted to substantial additional borrowing to pay off other debts.

The finance company registered its charge promptly and gained priority.

It refused to postpone its charge.

A substantial claim followed.

Always research all time limits, record them in the diary system and on the file, and then make sure that you react to them.

Such a simple procedure would have prevented the claims referred to and the substantial cost which followed.

l For further information on claims prevention, contact the risk management team at St Paul International, tel: 020 7645 6920.