Chain broken - possible money laundering

Mildreds_Earrings

Hello there, we are in a chain of 3, and we're at the end of the chain. We were supposed to exchange on Thursday, then complete on Friday but we received a panicked call from our Solicitor on Thursday, saying she couldn't exchange because the 1st party in the chain didn't pass money laundering checks. That Buyer has now changed Solicitors, presumably to meet the compliance checks.

Why this only came to light on the day we were due to exchange, I don't know 😤 but has this happened to anyone else? The two parties in the chain very much want to proceed but nobody can tell us how long this will take or even whether they will pass the compliance checks with another Solicitor? 

I am furious and want to put our property back on the market but my husband is in two minds and said we should wait.

Thoughts? 

se2020

Give it a week or so.
Failing a money laundering check could be due to anything. 
If it was anything serious the solicitor would have a duty to report it and they would be off to jail, not off to try a different solicitor 

housebuyer143

They normally send the file to a senior to sign off, and it sometimes is only done a day or two before. It might be that person wasn't happy with the checks the solicitor did and they wanted further evidence. 

user1977

"Failing a money laundering check" is hardly the same as "possible money laundering", it is most likely to mean merely that the provided evidence for the source of funds doesn't meet the solicitor's requirements. Which are not standard. We've had various stories here of excessive demands from solicitors.

EssexHebridean

The question in my mind is why the solicitors had only done their AML checks that late in proceedings - usually that is done as soon as instructions are confirmed! 

Mildreds_Earrings

EssexHebridean said:

The question in my mind is why the solicitors had only done their AML checks that late in proceedings - usually that is done as soon as instructions are confirmed! 

That's our first thought too. We should have completed Friday. Why on earth weren't the compliance checks carried out earlier?

That Buyer has now changed Solicitors but presumably they'll still be subject to the same AML checks? I'm beyond frustrated, not to mention furious 😤

user1977

AML checks including checking the source of funds when it actually arrives at the solicitor, which is typically immediately before completion - not something which can be completed far in advance.

Hoenir

EssexHebridean said:

The question in my mind is why the solicitors had only done their AML checks that late in proceedings - usually that is done as soon as instructions are confirmed! 

The problem with handed down stories is that there's nothing factual on which to comment. Could well have been an ongoing issue that finally hit the buffers when the time to exchange to approached. The question in my mind is why changing solicitors is going to result in a different outcome. Not least if there's a mortgage involved. As there's the lender to be considered. 

se2020

user1977 said:

AML checks including checking the source of funds when it actually arrives at the solicitor, which is typically immediately before completion - not something which can be completed far in advance.

This /\
I've previously seen it happen where source of funds were originally shown to the solicitor as some savings in an isa, some in a bank account, some in a building society. 
Before transferring to the solicitor the buyer has moved all the funds to a single bank account then transfered to the solicitor in one go and that has been enough to fail the final checks and put the whole process on hold.

HouseMartin567

se2020 said:

user1977 said:

AML checks including checking the source of funds when it actually arrives at the solicitor, which is typically immediately before completion - not something which can be completed far in advance.

This /\
I've previously seen it happen where source of funds were originally shown to the solicitor as some savings in an isa, some in a bank account, some in a building society. 
Before transferring to the solicitor the buyer has moved all the funds to a single bank account then transfered to the solicitor in one go and that has been enough to fail the final checks and put the whole process on hold.

What would be the solution to this? I would imagine a lot of people have funds scattered over numerous ISAs, premium bonds, current accounts etc. but then wish to move it all to one account for a singular CHAPS payment.

I may be in this situation soon and I hadn’t considered this being a potential issue.

user1977

HouseMartin567 said:

se2020 said:

user1977 said:

AML checks including checking the source of funds when it actually arrives at the solicitor, which is typically immediately before completion - not something which can be completed far in advance.

This /\
I've previously seen it happen where source of funds were originally shown to the solicitor as some savings in an isa, some in a bank account, some in a building society. 
Before transferring to the solicitor the buyer has moved all the funds to a single bank account then transfered to the solicitor in one go and that has been enough to fail the final checks and put the whole process on hold.

What would be the solution to this? I would imagine a lot of people have funds scattered over numerous ISAs, premium bonds, current accounts etc. but then wish to move it all to one account for a singular CHAPS payment.

I may be in this situation soon and I hadn’t considered this being a potential issue.

It's not a problem provided the solicitor sees the paper trail showing the movements of funds (depending on how fussy they want to be, that may have to include the other side of the final transfer to the solicitors' account).