Q: It is frustrating when the legal work delays a buy-to-let transaction, what extra work do legal firms have to do with these types of properties?
A: For buy-to-let purchase or remortgage properties there are mainly two types of transactions; vacant or existing tenant. In the first instance, if the buy-to-let dwelling is empty, there shouldn’t be any delays as there typically isn’t any extra work for the law firm to do.
However, in some cases, there could be specific mortgage conditions for the solicitor to satisfy when progressing the transaction, for example, ensuring the buyer has the right mortgage if they intend to let the property.
In the second instance, if the client is looking to purchase a buy-to-let property that already has an existing tenant, there will be extra work involved. In this case a copy of the existing tenancy agreement will need to be supplied to the solicitor to check and consider any apportionment of the rent and the transfer of the tenant’s deposit. All of these factors have the potential to slow down the process.
In addition to this, most buy-to-let mortgages have additional lender conditions that need to be satisfied before the transaction can be progressed towards an exchange of contracts. The biggest issue to face when dealing with a buy-to-let property is undoubtedly a purchase transaction with an existing tenancy in place, as a solicitor will need to obtain information from several different parties and this can often delay matters.
When there is already a tenant in place there are additional checks a solicitor has to make. The solicitor will need to consider the transfer of the tenant’s bond, which should be held in a protected deposit scheme, for example the Deposit Protection Scheme (DPS).
Obtaining this information from the seller’s solicitor takes time as the information is usually required from a third party and ultimately slows down the process.
To keep timescales to a minimum, when buying a property with an existing tenant, enquiries should be made as early as possible with the estate agent to ensure that all required certification is up-to-date, in place and checked, such as a landlord’s Gas Safety Certificate.
For a remortgage with an existing tenant it would help the solicitor if the borrower (landlord) has all this information to hand and sends copies to the solicitor at the outset.
Solicitors can sometimes be the first to be blamed when there is a hold-up with a buy-to-let transaction. However, as we rely on several parties for different information, the delay in providing some of the information referred to above is what accounts for such a transaction taking longer.
By recommending a law firm that is experienced in this area and who can keep you updated at each stage will help to relieve some of the stress and uncertainty with this type of transaction.
