Do money laundering regs allow delayed completion?

agnomen

A friend of mine sold her house... or so she thought when contracts were exchanged.
Now it turns out the money being used to purchase the property is being investigated (by, I gather, HMRC and others), delaying completion for several months now.

She doesn't need to buy somewhere else so it's not affecting a chain; I would have thought she is due compensation but I don't know if there are Regs that allow this delay, and she just has to put up with it. (personally I would have thought that all this should have been checked before exchange)

Thanks for any comments from anyone who knows about money laundering legislation.

Senior_Paper_Monitor

The purchaser(s) is/are responsible for their commitments under the exchange contract (there is no reason - including death - that exonerates him/her/them - or their estate - from that responsibility).

The exchange documentation will define the level of that responsibility.

Thrugelmir

agnomen wrote: »

delaying completion for several months now.

Why is there likely to be a delay for several months?

agnomen

Thrugelmir wrote: »

Why is there likely to be a delay for several months?

You mean, "Why has there been a delay?" No idea. Am wondering if this happens much.

GDB2222

Assuming this is a standard English contract using the Law Society's standard conditions of sale, there is a procedure to follow. Immediately after the contractual completion date expires, the vendor's solicitors serve a Completion Notice on the buyers. This gives them 2 weeks to come up with the money to complete the purchase or else they lose their 10% deposit, and the vendor can sell the house to a new purchaser. Potentially, there are further penalties for the buyers, but these are usually small compared to the deposit, and if they are being investigated there is a good chance they won't be in a position to pay anything.

Edit: Just saw that this has been going on for months now? Why has the standard procedure not been followed?

RabbitMad

this sounds like BS to me - even if the bank / solicitors had reported the funds to SOCA (Serious Organised Crime Agency) for suspected money laundering - they couldn't let anybody know that.

Furthermore they would request permission from SOCA to carry out the suspected money launderer's instructions and in the absence of a response form SOCA within (possibly 10 days) the bank / solicitor would be able to carry out the instruction requested regardless of the funds.

If SOCA refused the instruction I'm not sure what would happen but I doubt the vendor would be told the reason.

GDB2222

RabbitMad wrote: »

this sounds like BS to me - even if the bank / solicitors had reported the funds to SOCA (Serious Organised Crime Agency) for suspected money laundering - they couldn't let anybody know that.

Furthermore they would request permission from SOCA to carry out the suspected money launderer's instructions and in the absence of a response form SOCA within (possibly 10 days) the bank / solicitor would be able to carry out the instruction requested regardless of the funds.

If SOCA refused the instruction I'm not sure what would happen but I doubt the vendor would be told the reason.

I'm assuming that the investigation has progressed to the stage where the buyer's funds have been frozen.

Senior_Paper_Monitor

A very valid point by the Rabbit (I was just thinking in terms of the penalties due).

As I indicated above - you should just 'take the money' (deposit) and get on with life

RabbitMad

GDB2222 wrote: »

I'm assuming that the investigation has progressed to the stage where the buyer's funds have been frozen.

possibly, but I had cause recently to read up on a couple of precedents where banks were being sued for not moving funds immediately due to suspected money laundering and it seems the rules are fairly clear. In these instances millions were the amounts and SOCA didn't ask for the funds to be frozen.

I suspect the OP is being told rubbish or his / the other sols hasn't got a clue how to proceed.