Split Conveyancing Trasaction

[Elvina Fooy]

Hi

We are acting on a sale and a purchase, the sale is happening today, but due to probate issues it could be another 8 weeks before the purchase occurs.

I am going to ask the conveyancer to return the sale proceeds rather than just transfer to the purchase file, but what is a reasonable time scale to keep monies in this situation ?

Cheers

[Louise Smith]

I would also return the funds to the purchaser. I think 4 weeks would be the maximum that I would allow funds to be held in client account and that would also only be if contracts had been exchanged and the completion date set.

[James]

As long as the purchase is progressing holding these funds is fine as there is a clear underlying transaction. If the purchase were to go abortive at any stage the funds would need to be returned promptly to the client

[Claire Mills]

We would give the client a choice, depending on the sum the funds could attract interest (depending on your policy). They may prefer for you to hold than attempting to get the funds back into you in time. As there is an underlying transaction I don’t see any issue with holding the funds if the purchase is definitely going to go ahead. But seeing as they have sold I would assume they still will.

[Phil Invernizzi]

Hi

I tend to use 30 days as my golden rule for returning funds including unclaimed BACS receipts.

If it was suggested 8 weeks until the related purchase I also would make sure they return the funds straight away.

A good process for this kind of stuff is to throw it out to this forum see what everyone comes back with then base your decision on the responses and include it in your accounts manual.

I find it holds a lot of weight when I tell my accountants in my annual audit that it was agreed in the ALCA community.

Phil.

[Tiffany Woodhall]

There’s no fixed number of days in the SARs, but guidance and audit practice generally suggest:

Up to 14 days is acceptable where there’s a clear and imminent link between sale and purchase.

Up to 4 weeks might be reasonable if both transactions are ongoing and the delay is procedural (e.g. awaiting searches or mortgage offer).

Beyond 4–6 weeks, without a confirmed completion date, the SRA expects funds to be returned to the client unless there’s a compelling reason and you have documented it clearly on file.

At 8 weeks, as in your scenario, retaining the funds would almost certainly be deemed too long and non-compliant unless there’s a court order, probate restriction, or other legal necessity that justifies it.

[Geoff Smith]

Your post is not clear as to the “probate issues”. Are you acting in the probate as well as the conveyancing or is the probate issue related to the purchase?

Additionally if you send the sale proceeds back then presumably the purchasers solicitor is in the same position as you and will not want to hold those funds either.

If the funds can’t be held by your firm then why can’t they be either held as probate funds, presumably in a designated deposit account, or passed to the firm dealing with the probate to be held and returned to your firm when the purchase proceeds?

[Elvina Fooy]

We are not dealing with the probate here, its another firm of solicitors ,and the conveyancer did not explain the the issue, but the client has been given license to occupy the property whilst it is rectified, so shes probably not in any hurry to complete.

[Geoff Smith]

Isn’t the answer then to pay the money to the solicitors acting for your purchase and for them to hold the money on trust in their client account – there is an underlying transaction – or in a joint solicitors escrow account?

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