House sale fallen through due to AML concerns - was it avoidable?

mshine

I received the news a few days ago that my property sale had fallen through due to AML concerns but it's been 3 months since we accepted the buyers offer - it seems strange to me that this AML concern would come around now? They were at the stage of raising enquiries as searches had come back a month ago and they seemed to be stalling.

We've re-listed on the market and are hoping the property we'd like to buy will wait for us, but my question is - could this have been avoidable? Shouldn't these kinds of checks be done much earlier? We've spent around £1k on the property we're hoping to buy for survey and valuation costs so would also like to know if this could be recoverable if it's find that the solicitors/agents have been negligent.

SmoggyGoose

AML concerns from who? The lender the prospective buyer applied through?

MaryNB

Their conveyancer should have started asking them for proof of funds early on in the process. The buyer may not have been aware of the amount of information they were required to provide as part of the checks before they started the process. Maybe it was from a slightly shady source. Maybe it was from a legit source but they didn't have the documents to back it up. If they were receiving a gifted deposit, maybe the person giving the money wasn't willing to hand over sensitive financial docs or had given them a large sum of money in cash that couldn't be traced (a few posters here have had these type of problems). The buyer may have spent months trying to get the proper documents but ultimately couldn't produced enough info to satisfy the solicitor.  Maybe they failed the checks in in the first few weeks and spent another few weeks trying to find an alternative source of funds.

I had a gifted deposit from my parents and it took quite a long time to get all the documents my solicitor required - she was very vague to start with, would sit on the docs they sent over for a few weeks before asking for more. I could see how it could drag on for three months.

davidmcn

AML checks can't be completed until the money actually hits the solicitors' account, which is typically at the last minute. It wouldn't be normal to make much of a start on them at an early stage anyway, other than getting a vague idea of how the buyer is proposing to fund the purchase.

Certainly no chance of a claim against the other party's solicitor. Don't know whether your estate agent ought to have done more based on the information given.

mshine

SmoggyGoose said:

AML concerns from who? The lender the prospective buyer applied through?

I don't truly know because my solicitors couldn't get any further information from theirs nor could I from the estate agents... but they did mention it was from the bank they're borrowing from.

davidmcn

mshine said:

SmoggyGoose said:

AML concerns from who? The lender the prospective buyer applied through?

I don't truly know because my solicitors couldn't get any further information from theirs nor could I from the estate agents... but they did mention it was from the bank they're borrowing from.

So nothing at all to do with the solicitor or estate agent.

SmoggyGoose

mshine said:

SmoggyGoose said:

AML concerns from who? The lender the prospective buyer applied through?

I don't truly know because my solicitors couldn't get any further information from theirs nor could I from the estate agents... but they did mention it was from the bank they're borrowing from.

To me it might suggest they started the mortgage application process fairly late? AML concerns could range from not being able to verify the borrower's identity, address through to being comfortable with the source of funds used for the deposit.

MaryNB

davidmcn said:

AML checks can't be completed until the money actually hits the solicitors' account, which is typically at the last minute. It wouldn't be normal to make much of a start on them at an early stage anyway, other than getting a vague idea of how the buyer is proposing to fund the purchase.

Certainly no chance of a claim against the other party's solicitor. Don't know whether your estate agent ought to have done more based on the information given.

My solicitor did a lot of work up front in my case. The week I instructed my solicitor she requested I send over proof of funds and I sent a narrative of how I accumulated my own savings and enclosed the relevant bank statements.

With regards to my gifted deposit I showed all the transactions between my parent's account and my foreign and then UK account. My parents had to send over an explanation of how they accumulated the funds along with pay slips, bank statements, letters from employers etc, and had get their IDs and proofs of address signed off by a solicitor where they live. It took a long time because we didn't realise the level of detail she required (she was quite vague) and would only ask for more after we sent the first batch of info. 

This was all weeks before I sent my solicitor any of my deposit money.

AnotherJoe

davidmcn said:

AML checks can't be completed until the money actually hits the solicitors' account, which is typically at the last minute. It wouldn't be normal to make much of a start on them at an early stage anyway, other than getting a vague idea of how the buyer is proposing to fund the purchase.

Certainly no chance of a claim against the other party's solicitor. Don't know whether your estate agent ought to have done more based on the information given.

I've just been involved buying two houses and in both, AML checks were done within a couple of weeks of the accepted offer, both by the EAs and the solicitors.

What could easily have happened in the OPs case though is the buyer was less than forthcoming about the source of the money, eg said it was X and turned out to be Y, or perhaps they were forthcoming but as per MaryB and others above , the checks started but then took too long or couldn't be completed satisfactorily.

BUt theres certainly no need to wait until the money gets to the solicitor since that might even be day before the transaction which is obviously not long enough. Of course if buyer says money is coming from X and that checks out allright and then sends money from Y last minute that would be another fail.

MaryNB

SmoggyGoose said:

mshine said:

SmoggyGoose said:

AML concerns from who? The lender the prospective buyer applied through?

I don't truly know because my solicitors couldn't get any further information from theirs nor could I from the estate agents... but they did mention it was from the bank they're borrowing from.

To me it might suggest they started the mortgage application process fairly late? AML concerns could range from not being able to verify the borrower's identity, address through to being comfortable with the source of funds used for the deposit.

My lender didn't carry out any AML checks before issuing my offer. I asked if I needed to send them a gifted deposit letter and they said no. It was all done by my conveyancer (obviously also acting for my lender) after I had received my offer. 

davidmcn

AnotherJoe said:

davidmcn said:

AML checks can't be completed until the money actually hits the solicitors' account, which is typically at the last minute. It wouldn't be normal to make much of a start on them at an early stage anyway, other than getting a vague idea of how the buyer is proposing to fund the purchase.

Certainly no chance of a claim against the other party's solicitor. Don't know whether your estate agent ought to have done more based on the information given.

I've just been involved buying two houses and in both, AML checks were done within a couple of weeks of the accepted offer, both by the EAs and the solicitors.

I didn't say it was never done, but in my experience looking at the source of funds is usually done closer to the point at which the funds are actually going to the solicitors (though of course they'll at least have checked ID as part of the know-your-client work at the outset).

But in this case, it seems it was the lender who had concerns rather than the solicitor or EA anyway.