New figures suggest that anti-money laundering (AML) requirements are causing chaos for conveyancing lawyers, eating up to 25% of their time and prolonging property sales across the UK. Peter Ambrose, owner of The Partnership and Legalito, is one expert highlighting the issue: 'source of wealth' checks, a key component of these AML measures, are at the heart of the problem.
The checks involve lawyers scrutinising financial documents from third-party contributors to property purchases – think parents, relatives or benefactors. This means reviewing everything from bank statements to share certificates, wills and ISA statements. The complexity is staggering, with even initial client onboarding processes taking an average seven days to complete. And it's here that delays often begin.
The average conveyancing transaction takes 14 weeks to finish – a lengthy period that gives buyers ample opportunity to change their minds or pull out of the deal altogether. This leads to increased property fall-throughs, further complicating the already intricate process.
Ambrose believes collaboration between estate agents and lawyers could be key in tackling these delays. He suggests that giving buyers advance warning about the documentation required from third-party contributors could help them prepare paperwork well in advance, rather than scrambling at the last minute. This proactive approach might just streamline the entire process without compromising regulatory standards.
This insight comes as the government plans to reintroduce Home Information Packs, citing a lack of property information as a major issue. However, Ambrose disputes this assessment, arguing that AML checks have a far greater impact on delays than problems with property searches or missing certificates. It's also worth noting that many conveyancing firms operate on a 'no-sale, no-fee' basis – a fact that often contradicts public perception of legal fees in property transactions.