A property chain is a series of property sales and purchases which are linked together, and where each sale and purchase depends on another.
These usually start with a first-time buyer and end with a seller who does not need to buy anywhere else; so Buyer A is selling to Buyer B; Buyer B is selling to Buyer C, and so on.
The length of a chain can vary greatly but ideally the chain would not involve more 5 or 6 transactions as it can otherwise become really difficult to co-ordinate all of information or actions needed along the chain.
Whenever you are relying on a buyer where they need to sell their property, this can obviously cause delays and stress. Whilst you and your Solicitor may be ready to proceed with your own sale and/or purchase, you may be waiting for a number of other transactions to catch up.
On occasions, some chains can branch off which can cause even further delays. For example, if a couple are separating and both buying new properties independently of each other, that would create a branch of transactions which then grow out in other directions and can add to the complexity.
As a result, it is important to find out how long the chain is at the outset. Your Estate Agent will be doing their own due diligence and should check right at the start that all parties in the chain have evidenced their source of funds and that everyone involved is able to proceed with their transaction. It is extremely difficult if you suddenly find out some way into a transaction that someone in the chain are having trouble obtaining their mortgage, raising their finance, there is an adverse survey or – for whatever reason – is just not ready. As all the transactions along the chain are dependent on each other, this could put the whole chain in jeopardy or for the chain to collapse and the transactions to `fall through’.
Once everyone is ready and able to proceed, the solicitors and estate agents will coordinate with their clients and each other to help everyone to agree on dates for exchange and completion. Until the whole chain is ready to exchange and set a completion date, it can be a waiting game. This can be particularly frustrating if you are all set and others still need to catch up.
If you are involved in a chain, then it really helps to confirm with your solicitor:
Any specific risks and implications of your position in the chain (perhaps there is an unrealistic time expectation from others, a separating couple or a mortgage with only a short time to run);
How delays or failures in the chain could affect your transaction (perhaps if your move is time dependent for new schools or a move for a job change); and,
What you can do to help to minimise the risk of transactions falling through (perhaps making sure that your finances are agreed and making sure any due diligence needed is resolved as early as possible).
If you would like further information about your sale or purchase please contact Gill Bratcher on 01803 407663 or email gillbratcher@wbw.co.uk.
WBW Solicitors has offices in Axminster, Bovey Tracey, Brixham, Exeter, Exmouth, Honiton, Launceston, Newton Abbot, Paignton, Seaton, Sidmouth, and Torquay.
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.
