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  • FIRST POST
    kozera
    Can vendor move out AFTER completion date?
    • #1
    • 12th Mar 12, 10:20 AM
    Can vendor move out AFTER completion date? 12th Mar 12 at 10:20 AM
    I'm buying a house and found on the 9th March that the completion must be before 24th March so i could avoid paying the stamp duty(am first-time buyer- house is 146,000) .

    I signed the contract at the beginning of Feb stating that my preferred completion date is 17th or 23 march ( did not even know about avoiding the stamp duty)- thought it would give myself and the vendor sufficient time to sort out all the issues related( the whole process started in November).

    Now I found out from my solicitor that one of the party STILL has not signed the contract and it cannot be guaranteed that the completion will happen before 24th. as apparently the vendor still has not completed the matters related to their new house.

    I highly doubt that they will agree completion for 24th as it is only in 12 days.

    I am happy for them to move out after 24March so i could avoid paying the stamp duty. Can it be done ? My solicitor seem NOT to be familiar with such arrangements. I understand there will be some kind of contract/agreement written(?) Who should pay for it and how much can it cost? Obviously if they stay there I will end up paying the mortgage and rent for my current flat. So- can the vendor pay my mortgage for the time they will be there and I am unable to move in ?

    would really appreciate any advice on this.
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  • gazareth
    • #2
    • 12th Mar 12, 10:34 AM
    • #2
    • 12th Mar 12, 10:34 AM
    It is likely that one condition of your mortgage is that the house is vacant upon completion of the purchase (often referred to as "vacant possession"). You need to check that point before you even consider anything else, because if that condition is there then it would be mortgage fraud to allow them to stay beyond completion.
    • sirmosh
    • By sirmosh 12th Mar 12, 10:45 AM
    • 693 Posts
    • 6,241 Thanks
    sirmosh
    • #3
    • 12th Mar 12, 10:45 AM
    • #3
    • 12th Mar 12, 10:45 AM
    You can't complete on the 24th because it's a Saturday so it would have to be the 23rd. Basically there's no legit way to do this, the mortgage company will want a vacant possession and they're not going to give permission to let the property out the second you've bought it so you'll either have to pay the stamp duty or try and make them move out.
    • pinkteapot
    • By pinkteapot 12th Mar 12, 10:58 AM
    • 6,105 Posts
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    pinkteapot
    • #4
    • 12th Mar 12, 10:58 AM
    • #4
    • 12th Mar 12, 10:58 AM
    How much is stamp duty going to cost you?

    What you're proposing is likely to be far, far more hassle than it's worth. Firstly, as others have said, your mortgage company will expect vacant possession and you'd have to notify them that the house is being rented out. They're pretty unlikely to be happy with the situation.

    Secondly, you'd become a landlord and the vendor would be your tenant. Even if you don't write up a formal tenancy agreement, they gain all sorts of legal rights just by virtue of the fact they're living there and paying you rent. You could find it very difficult to make them move out.

    If you want to do it properly, you'll need to give them a tenancy agreement. The shortest AST you can do is six months, so you couldn't chuck them out until that long has passed.

    Unfortunately there's not a lot you can do about the stamp duty. It's too late for you to pull out and buy somewhere else. Did you make it clear to the rest of the chain from the outset that you needed to buy before the stamp duty deadline? If you have, you could try haggling for a last minute price reduction on the basis that you're now going to have to pay stamp duty, but you risk making yourself very unpopular.
    • Richard Webster
    • By Richard Webster 12th Mar 12, 10:59 AM
    • 7,325 Posts
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    Richard Webster
    • #5
    • 12th Mar 12, 10:59 AM
    • #5
    • 12th Mar 12, 10:59 AM
    You should have had the chain thoroughly checked when you started and made it clear to your sellers that if completion wasn't by 23rd March you would wont a reduction to cover the cost of the SDLT - that might have motivated them to check the chain above them.

    People generally do not bother about checking chains or accept vague assurances form estate agents based on out of date second hand information that there is "no problem up the chain".

    There is always a mythical "empty property" that someone is buying at the top....(with an as yet unobtained probate or a warring divorcing couple....).
    RICHARD WEBSTER

    As a retired conveyancing solicitor I believe the information given in the post to be useful assuming any properties concerned are in England/Wales but I accept no liability for it.
  • sonastin
    • #6
    • 12th Mar 12, 12:38 PM
    • #6
    • 12th Mar 12, 12:38 PM
    Stamp duty is £1460. The cost of your proposal (if you can make it work) if things go wrong could run into tens of thousands...
    -you become a landlord. do you know what that entails?
    -IF your mortgage lender agreed to let you go down this path, they'd probably stick an extra % or two onto your mortgage rate as the risk profile has suddenly got worse (which is why they probably won't let you be this foolish)
    -can you afford the cost of the mortgage and the rent if the vendors take advantage and don't pay you anything for the privilege of living there?
    -how long could you afford to keep paying for both? If your vendor's purchase falls through, can you afford to wait while they find somewhere else and/or you evict them via the courts (something you can't even start for 6 months if they give you just 1 rent payment)


    More realistic options:
    1) continue as planned and pay the stamp duty if completion happens after the deadline.
    2) give the vendors an ultimatum that completion happens before the deadline or you reduce the amount you are paying by the cost of the stamp duty, or you'll pull out completely.
    3) pull out and find somewhere else cheaper which will leave you enough left over to pay the stamp duty on that alternative property.
  • kozera
    • #7
    • 12th Mar 12, 1:01 PM
    • #7
    • 12th Mar 12, 1:01 PM
    Thank you all for the contribution. I can see now that vendor staying in the house after completion is not an option.

    Richard Webster You should have had the chain thoroughly checked when you started and made it clear to your sellers that if completion wasn't by 23rd March you would wont a reduction to cover the cost of the SDLT - that might have motivated them to check the chain above them.

    Richard this is indeed a great idea, really regret it did not come to my mind at the wright time. I assumed that from November till March will be more than enough time to sort out everything

    sonastin
    2) give the vendors an ultimatum that completion happens before the deadline or you reduce the amount you are paying by the cost of the stamp duty, or you'll pull out completely.

    Unfortunately, I believe it is too late now to negotiate the price- I have already paid the 10% deposit to the solicitor and signed the contract- correct me if I am wrong.
    • anselld
    • By anselld 12th Mar 12, 1:07 PM
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    anselld
    • #8
    • 12th Mar 12, 1:07 PM
    • #8
    • 12th Mar 12, 1:07 PM
    Unfortunately, I believe it is too late now to negotiate the price- I have already paid the 10% deposit to the solicitor and signed the contract- correct me if I am wrong.
    Originally posted by kozera
    Legally, you can renegotiate up to the point contracts are exchanged. Whether it will be accepted by the vendor is another matter!
    • terryw
    • By terryw 12th Mar 12, 1:08 PM
    • 3,824 Posts
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    terryw
    • #9
    • 12th Mar 12, 1:08 PM
    • #9
    • 12th Mar 12, 1:08 PM
    2) give the vendors an ultimatum that completion happens before the deadline or you reduce the amount you are paying by the cost of the stamp duty, or you'll pull out completely.

    Unfortunately, I believe it is too late now to negotiate the price- I have already paid the 10% deposit to the solicitor and signed the contract- correct me if I am wrong.
    Originally posted by kozera
    It looks as though contracts have not been exchanged - your signed copy is sitting in your solicitor's office, and the deposit is in a bank account. You are still able to negotiate until contracts are exchanged.
    "If you can bear to hear the truth you've spoken
    Twisted by knaves to make a trap for fools"
    Extract from "If" by Rudyard Kipling
  • GAH
    The OP themselves admit that they knew nothing about the Stamp Duty holiday. As mentioned above if they had set it as a term of the contract that if they didn't complete beofre the deadline, then they would stand themself in better stead to re-neogiate.

    Could of course still do it, but it would become gazundering.
  • kozera
    Spoke with the solicitor - still no info as to at what stage the vendor is with their purchase or they preferred completion date but was told that he will aim to make the vendor pay the stamp duty. Looking at some posts in here reg. this- it does not look like it will be easy to achieve. I also mentioned I would like to re-negotiate the price if completion does not take place on 23rd but was advised to speak with the EA...
    • dimbo61
    • By dimbo61 12th Mar 12, 5:26 PM
    • 9,126 Posts
    • 4,971 Thanks
    dimbo61
    So what is stopping the exchange from taking place on the 23th ?
    Can the vendor you are buying from move into rented if he wants to sell ? ( or a hotel for a few days)
    £1460 is a lot of money to pay in TAX when you dont need to.
    Get on the phone to the EA and solictor and tell them the deal is off if not completed by the 23rd
    SEE WHAT HAPPENS !!!
  • Strapped
    Just put pressure on the vendor to complete by the 23rd. Hint that you may not be able to afford the purchase if it doesn't happen by then.

    We had a similar situation involving early redemption fees on a ported mortgage which meant we had to complete by a certain date, or lose about £4k. We ended up paying the vendor £1k to move into rented for a couple of weeks. But in your case, £1.5k is less to play with.
    They deem him their worst enemy who tells them the truth. -- Plato
    • Yorkie1
    • By Yorkie1 12th Mar 12, 6:43 PM
    • 11,036 Posts
    • 20,633 Thanks
    Yorkie1
    Spoke with the solicitor - still no info as to at what stage the vendor is with their purchase or they preferred completion date but was told that he will aim to make the vendor pay the stamp duty. Looking at some posts in here reg. this- it does not look like it will be easy to achieve. I also mentioned I would like to re-negotiate the price if completion does not take place on 23rd but was advised to speak with the EA...
    Originally posted by kozera
    Ask your solicitor to advise you about related transactions / gifted deposit rules.

    If the seller is paying part of the transaction, I believe it a) has to be reported to the lender, and b) is relevant for tax purposes.
    • caeler
    • By caeler 12th Mar 12, 7:34 PM
    • 1,941 Posts
    • 1,752 Thanks
    caeler
    I appreciate at the time you were not aware of the stamp duty holiday but I'd be furious if the EA and/or the solicitor had not been looking at this on my behalf. I think quite rightly you would expect to have been fine with a 5 month period to exchange and complete in so had no reason to consider it a big risk. Time to be a stubborn buyer perhaps?
    MFW | Debt Free since 2009 | NSD Fan | LC
    • steve1980
    • By steve1980 12th Mar 12, 9:01 PM
    • 2,256 Posts
    • 1,140 Thanks
    steve1980
    I appreciate at the time you were not aware of the stamp duty holiday but I'd be furious if the EA and/or the solicitor had not been looking at this on my behalf. I think quite rightly you would expect to have been fine with a 5 month period to exchange and complete in so had no reason to consider it a big risk. Time to be a stubborn buyer perhaps?
    Originally posted by caeler
    The agent is not at fault. They have done their job finding a buyer. All sales chasing is essentially carried out free of charge by the EA.

    Any change or adjustment in the price should be confirmed and passed by the solicitor, not the agent. That's a cop out from your solicitor.
    Estate Agent, Web Designer & All Round Geek!
    • terryw
    • By terryw 12th Mar 12, 10:00 PM
    • 3,824 Posts
    • 5,982 Thanks
    terryw
    The agent is not at fault. They have done their job finding a buyer. All sales chasing is essentially carried out free of charge by the EA.

    Any change or adjustment in the price should be confirmed and passed by the solicitor, not the agent. That's a cop out from your solicitor.
    Originally posted by steve1980
    A matter of opinion Steve. The agents have not found a "buyer". They have found, at best a "potential buyer".

    The expectation of completion by a certain date as specified by the seller should have been made perfectly clear to the potential buyer when the offer was put forward to the seller.
    "If you can bear to hear the truth you've spoken
    Twisted by knaves to make a trap for fools"
    Extract from "If" by Rudyard Kipling
    • steve1980
    • By steve1980 12th Mar 12, 10:22 PM
    • 2,256 Posts
    • 1,140 Thanks
    steve1980
    Was an end date even mentioned?
    Estate Agent, Web Designer & All Round Geek!
    • sabretoothtigger
    • By sabretoothtigger 12th Mar 12, 10:34 PM
    • 9,968 Posts
    • 6,581 Thanks
    sabretoothtigger
    Buy the house vacant, get the keys. Let them back in as your house guests Have them sign some sort of agreement for rent of the time needed, you can decide if you want to refund that back also as goodwill
    Tokyo residential prices have gone from 4x London in 1990 to ¼ London in 2014
    Maybe this is one of those cases where you can’t go home again,
    by Ben S. Bernanke, former Fed chairman
    • eddddy
    • By eddddy 12th Mar 12, 10:58 PM
    • 3,828 Posts
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    eddddy
    The agent is not at fault. They have done their job finding a buyer. All sales chasing is essentially carried out free of charge by the EA.

    Any change or adjustment in the price should be confirmed and passed by the solicitor, not the agent. That's a cop out from your solicitor.
    Originally posted by steve1980
    Steve - are you really an EA like it suggests in your sig?

    Of course it's part of the EA's job to chase the sale through. That's a big piece of what you pay them for. I would not touch an EA with a bargepole who suggested otherwise.


    (It's also a good reason to be very wary of low cost, fixed price, web based EAs. They have no incentive to chase the sale through. "No sale, no fee" works as a great incentive for the EA.)

    Also, I don't think a solicitor is the right person to conduct a price negotation. They are lawyers, not negotiators. And they tend to charge £200+ per hour for their time.
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