Clifford Chance lawyer Teddy Bourne has come to the rescue of property investors by drawing up a code of practice for sellers in a bid to speed sales.
Bourne, a property partner at Clifford Chance's City office, wrote to the Investment Property Forum offering to help when he heard that it was looking to set up a working party to work out a way of increasing property market liquidity.
“I told them that I had acted for the Burton Group when it bought four large shopping centres in 18 days. They wrote back saying I had just volunteered to chair the working party,” he said.
The Investment Property Forum, set up by chartered surveyors, insurers and property investor groups to try to increase investment in the property market, found that potential investors were being deterred by the snail's pace of property transactions compared with share dealing. The main slowing factor was the lack of documentation from the seller.
Bourne and his working party have now drawn up a code of practice which states that sellers should be ready for sale at three key times: just after the property has been developed, immediately following acquisition and as soon as the owner thinks about selling.
“Ideally, owners should be ready for sale all the time, but that's not practically possible,” said Bourne.
“I've just been involved in a transaction which was a classic example of how not to do it. Although the purchaser and the seller had been negotiating for at least a month, when I came in none of the documents was ready.”
He said that the aim was that as more sellers prepared documents according to the code buyers would come to expect it to be followed, and the code would gradually become standard procedure.