Open Contract

Gazumped_2

I have just been contacted by my solicitor, to say that they are currently in the process of drawing up the final contract for both parties to sign, that we will sign over the next few days.

Only problem being, is that the couple we are buying off are moving into a new build, they were originally expecting that this would be complete before Christmas.

The builders who are incidentally the solicitors for the sellers, have just said that the sellers new house will not be ready until at least February.

This would mean that we would be signing an open contract with no completion date on it.

So surely this means that completion can drag on forever? And with the current weather it is unlikely it will be completed until the summer now.

Also how do we stand with the Mortgage, how long will the offer last for? I presume this is problem is quite common for people in chains where by they may remain under offer for some time.

N79

If you are happy to proceed, get your solicitor to set an upper limit for completion in the contract (3 months, 6 months or whatever). Your solicitor can advise you on an appropriate deadline taking into account your mortgage requirements etc.

Gazumped_2

I asked whether there would be a worst case scenario, or cap.

The exact response I got was.

“As far as we are aware a completion date will not be entered on the contract. You will be effectively signing an open contract. There will not be a worst case date entered on the contract.”

I want the house and I do not want to force the sellers out of their home as they want to move out ASAP too.

But I don’t really want to sign an open contract which means that the builders can effectively take as long as they want.

firstaspect

Your solicitors are working for you so you can tell them that you will not sign an open contract and that a limit on completion must be set or you'll be pulling out the deal.
Otherwise if you do sign then yes completion could happen at any point, 3 months, 6 months, 18 months, who knows! And yes your mortgage offer could expire by then.

sonastin

Stand your ground. Tell them that you are not prepared to sign an open contract. You are willing to be reasonable with what the end date can be but there must be an end date. Worst case scenario if you sign an open contract is that your mortgage offer expires between now and completion and your circumstances change so that you can't get another mortgage. You don't want to find yourself in the position where you are committed to buy but unable to raise the funds because they have taken so long.

Cannon_Fodder

Do not sign.

If they want to leave things 'open', just defer exchange.

BitterAndTwisted

Don't sign an open contact. Have your solicitors suggest to the buyer's sols that if they want to secure the sale they will have to consider going into rented accommodation if their new property isn't finished within X weeks. If they can't commit, pull out

Gazumped_2

Yes I agree with everyones comments. I am not happy about signing an open contract.

The solicitors have said that they are waiting on the contract from the sellers solicitors, so I have to wait and see first.

Richard_Webster

Your sellers are buying a new property and one of the downsides is that they don't get a fixed date for completion. That's not your fault - it is theirs. They are the ones who decided to buy a property which hadn't been finished so they are the ones ones who may have to move out and rent somewhere. The risk of this should have been explained to them when they decided to buy it.

Did OP have it explained to him that there would be no fixed completion date because it would depend on when the new house was finished?

I guess not. So the seller should bite the bullet and agree a fixed date to move out. After all they are the ones buying the new property.

I would take as hard a line as I could with the builder. They are lucky the seller wants to buy their probably overpriced new house so they can jolly well find a PX resale house they haven't sold yet and move the seller into that to allow him to complete his sale to OP.

Gazumped_2

We were originally told that it would be 17th of December, and if not that then the 2nd week of January, the sellers also believed this. (Well it could have been possible without this weather).

But we were originally told when we purchased it that we would have open contract with a date stating the latest it could be. So as per above we were told we would get a contract that would say the end of January or any time before this.

Now my solicitor is telling me that this will be an open contract with no completion date.

And I have just found out my mortgage offer ends 28/02/2011....

Richard_Webster

You pull out unless they exchange with a backstop date of 28/2/11.