Exchange & Completion - Help!

groundforce_2

Hi guys
We have bought a house to which some structural work has been done on it. All works had planning permission and will be signed off by the planning inspector. However, there is still an annex to be removed and some patio doors to be installed. We were told that this would be done before exchange, however, today we have found out through the estate agent that the seller hasn't time at the moment to complete these works but has allocated the four weeks between exchange and completion to carry them out and get all the work signed off by the planning inspector. We intended to get our survey done after the works had been finished, but obviously this isn't possible now as the survey will have to be done before exchange of contracts. Does this sound a feasible request by the seller? We have clearly stated that if the work isn't done, then we will delay completion until they are, which obviously we don't want to do. Has anybody ever been in this position before? Its just a bit unsettling to think that completion date will be getting closer and the work will be done at the last minute. The estate agent doesn't seem overly worried and I have advised my solicitor of the change. Any advice anybody can give would be greatly appreciated. Many thanks in advance.

Premier_2

You can get the property valued now and get a valutaion based on the current condition, and an expected value once all the work is completed.

The lender will normally be ok by this, but may want a re-inspection fee to confirm all the intended work has been completed as envisaged. The total money will not be released until the work has been completed.

Meanwhile, ensure that completion of the works is a clear requirement stated within the purchase contract. Furthermore, you may want your solicitor to think about what penaties should be included for failing to complete the work and a time period by which it should be done.

Doozergirl

Do not exchange contracts until every you want done is done. Exchanging contracts essentially means that you are happy with everything. You need to specify a completion date at exchange - you can't delay it.

Whether or not you delay the survey is here nor there but quite simply, you must not exchange until the work is done. The vendor is, frankly, an idiot for expecting you to exchange contracts without things that were promised in place. Ditto for the EA.

Fishingtime

Make sure all the work is done first before you sign the contracts,
The EA will not look worried incase you get scared and back out of buying the property.
The Ea wants the sale to go through purely for his commision

chewmylegoff

groundforce wrote: »

Hi guys
We have bought a house to which some structural work has been done on it. All works had planning permission and will be signed off by the planning inspector. However, there is still an annex to be removed and some patio doors to be installed. We were told that this would be done before exchange, however, today we have found out through the estate agent that the seller hasn't time at the moment to complete these works but has allocated the four weeks between exchange and completion to carry them out and get all the work signed off by the planning inspector. We intended to get our survey done after the works had been finished, but obviously this isn't possible now as the survey will have to be done before exchange of contracts. Does this sound a feasible request by the seller? We have clearly stated that if the work isn't done, then we will delay completion until they are, which obviously we don't want to do. Has anybody ever been in this position before? Its just a bit unsettling to think that completion date will be getting closer and the work will be done at the last minute. The estate agent doesn't seem overly worried and I have advised my solicitor of the change. Any advice anybody can give would be greatly appreciated. Many thanks in advance.

any particular reason that you're having four weeks between exchange and completion? there is no need for the gap to be this long, it is actually possible to exchange and complete on the same day.

why not just push back exchange until the vendor has done the work you want.

groundforce_2

Thanks for your replies. I have had a reply from my estate agent basically saying that "It is common for work to be done between exchange and completion to be fair to both sides. That way he is contractually obliged to carry out the works as agreed in the signed contracts by both Buyer and Seller, and if a buyer renegs on the sale the vendor will not have wasted time and money on work that he otherwise would not have done. For that reason, the buyer is not likely to do the work before exchange."

I can see both sides, but I have alarm bells ringing that if he doesn't carry out the works in time of completion four weeks later, where do we stand?

I suppose we could push exchange back two weeks and then have two weeks before completion instead of four, thus keeping our original completion date. Or like somebody said above, we could have a condition put into the contract that if the works aren't carried out as specified, then a fine would have to be paid.

Think I will speak to the solicitor again tomorrow morning to discuss. Just never been in this position before....

Incisor

groundforce wrote: »

Thanks for your replies. I have had a reply from my estate agent basically saying that "It is common for work to be done between exchange and completion to be fair to both sides. That way he is contractually obliged to carry out the works as agreed in the signed contracts by both Buyer and Seller, and if a buyer renegs on the sale the vendor will not have wasted time and money on work that he otherwise would not have done. For that reason, the buyer is not likely to do the work before exchange."

He's not your Estate Agent. Sorry to be picky on that, but he is your vendor's agent. Why am I picky on that? It is because his only duty in telling you anything is to tell you the message the vendor wants you to hear.

This is complete tosh. Tell them 'No works, no exchange'. You don't need to justify it apart from to say you are not being taken for a fool.

Your other option is to negotiate a reduction in price and undertake the works yourself. This is preferable to having works done between exchange and completion.

Premier_2

Of course you can exchange contracts without the work having been completed, as long as the contract specifies what needs to be done, else how do developers sell off-plan or partially completed properties.

Not sure why you are so insistent on completing within 4 weeks, perhaps because that's when you need to leave where you currently live?
There is also no need to specify a date to exchange on the contract; this can be on say 14 days notice by the seller but your solicitor will explain why you should have a long-stop date by which completion must take place.

Seek advice from your solicitor on how best to proceed - he may suggest you hold off exchange until the work is completed. I agree with the advice about the EA - the EA works on behalf of the seller not the buyer so take anything he says with a pinch of salt.

silvercar

You can put a retention in the contract. On completion the seller doesn't get the retention amount until all agreed works are completed. If the retention amount is equal to the cost of doing the works + a bit for error then the seller will ensure it is done.

We did something similar as the whole chain needed the completion by a certain date to secure mortgage offers. 28 days after completion our solicitor asked if it was OK to release the retention money.