On the 13th November last year we received instructions from a client looking to buy an NHS practice. Approximately two and a half weeks later, on the 1st December, we had completed the process – a process that in most cases nowadays is more likely to take at least eight months!
How was this possible? Simply, it was necessity. Both parties were not in a position for the process to take any longer and, moreover, we had the full cooperation of NHS England, the LAT and CQC, who understood the specific circumstances of the matter.
But this is by no means a typical situation. In fact, it serves as a good example to juxtapose with what I might call the ‘normal’ process.
The vast majority of the work we do, when acting on behalf of a buyer, for example, is completed before parties exchange contracts – at which point, of course, both parties are legally bound to proceed. To arrive at this stage there is a plethora of checks that need to be completed, as well as ensuring all finances are in order and the Sales Agreement has been formally agreed. Only once all of these elements have been completed can the exchange take place – and from there it is usually between one and three months before completion.
As such, delays are far more likely to take place prior to an exchange of contracts, simply because there are so many different elements that need to be juggled before the sale and purchase can proceed.
Due diligence is typically split into two different sections: standard property due diligence and dental due diligence. Neither of these documents is particularly easy to deal with and both entail the seller providing their solicitors a great deal of information and documentation. Since this is entirely dependent on how quickly the seller can organise this information it can be the cause of potential delays. Similarly, a perspicacious solicitor will go through all the information with a fine-toothed comb to ensure there are no obvious errors or omissions before it is passed on to the buyer’s solicitor. This, in itself, can take a considerable amount of time, without even considering the likelihood of any supplementary enquiries on the buyer’s behalf which are almost invariably required once the buyer’s solicitors have completed their initial review of the information and documentation supplied. These too must be answered fully – which, again, is dependent on the seller’s efficiency and organisation. Indeed, we have seen cases when this process alone has been delayed a sale by some nine months, simply because the seller has failed to collate all the necessary information any sooner.
These documents can be anything from between 50-100 pages and obviously take time to complete. Unfortunately, progress is all too often hampered by solicitors treating the entire process as though it is litigation. They seem to forget that there are two parties who share a common aim. Of course, some solicitors are simply slower than others – and some are simply unfamiliar with the dental world. Luckily, though, I would say around 90 per cent of dental professionals choose dentally aware lawyers, who can normally negotiate the working of a Sales Agreements in a couple of months. Of course, both the seller and buyer need to be commercial and understand that cooperation and compromise may well be required.
Of course, when acting on behalf of a buyer, no commitment to exchange contracts should be made until all finances are secure – which can take time. What’s more, the bank itself may need to conduct its own valuations and checks and, in some cases, instruct their own solicitors – who can be incredibly particular. Many banks will also require a buyer to have life assurance cover. This cover may in turn require a detailed report from the buyer’s GP, who will have to take time to complete this report – and any delay along this chain will obviously have ramifications further down the line.
Similarly, if the property is Leasehold, with a third party landlord granting the lease, it is necessary to wait for this to be arranged. How long this will take is, once again, entirely dependent on how quickly the landlord and their solicitors can organise all the necessary documentation. We had a recent case where this element caused a delay of some five months, which was incredibly frustrating for seller and buyer alike.
Many clients will not appreciate how tricky the CQC application can be. A date must be arranged for when the CQC registration will change, but if the date notified on the application to CQC is too far into the future, the application will simply be rejected. If it’s too soon, there is a chance completion will not be possible – and while CQC will keep the application open for a limited period of time, it will eventually be rejected based on the failure to keep to an arranged date. Then the process must be started again. The window of opportunity is actually very specific and there are many reasons why applications may be rejected.
As you can see, there are many stages in the process that can cause delay. There are so many people and organisations involved from start to finish, all of which must do their bit to ensure everything will come together. If only one of these things goes wrong, delays will be the result.
The most important thing is to be realistic. If you assume your sale or purchase is going to take a month to complete, you will be disappointed. Understanding that, as a process, it takes time – and requires a great deal of patience – will eliminate a lot of stress and frustration moving forwards.