Completion time in contract

Milliemoodle_2

We are buying a house that has been repossessed by Northern Rock. Their solicitors (who shall remain nameless but are a large national firm) have sent the contract papers to my solicitor.

One of the special conditions states that completion must take place by 1pm, otherwise it will be deemed to be late and then we will have to pay various charges/interest etc. The solicitors fee for serving a notice to complete is £200 + VAT. My solicitor attempted to change the completion time back to 2pm and explained that there is a reasonable-length chain involved. He also tried to change the amount payable for a notice to complete to £100 + VAT as that is what he charges. The bank's solicitors' response was effectively, our client will not agree any changes, if your client doesn't like it, send the papers back.

Given that there are 5 houses in the chain, 1pm does not seem to me to be a fair completion time. We have asked our buyers' solicitors to agree a completion time of 12pm and they in turn have asked their buyers' solicitors to agree an earlier completion time but they are hopping mad about it. They have even gone so far as to send a letter to my solicitor, basically stating that the whole thing is a fee-generating exercise on the part of the bank's solicitors and asking my solicitor to forward that letter to the bank's solicitors to indicate how annoyed they are.

So my question is, is there anything we can do to make them agree to a later completion time? Is £200 + VAT really a reasonable amount for a notice to complete? (We aren't in London!) The contracts I have come across before have only ever stated £100 + VAT. It doesn't appear to me to be very ethical to be demanding completion by 1pm when they have until 3pm to send the TT to redeem the mortgage. And surely they can agree to lower their notice to complete fee without recourse to their client, given that it is the fee payable to the solicitors? They have already charged us £75 + VAT to provide an "engrossed" TR2 which my solicitor was more than happy to draft himself but they were insistant. Is there anything I can do to try to reason with them?

Thanks.

Craig_Grant

Have you tried ringing the law society to see what their opinion on this is?

Milliemoodle_2

I have spoken to the Solicitors Regulations Authority who have said that once it has all gone through I can go back to them and complain about the bank's solicitors but there is nothing they can do about it at the moment. The Law Society is more for solicitors themselves.

Milliemoodle_2

bumping this as due to exchange next week and in a panic!

Thrugelmir

The TT will have to be lodged with the bank 1pm to effect the transfer in time. As the bank will have to manually process the request.

Unfortunately the client sets the terms not the solicitors representing them. As its a "repo" property. I assume that you are purchasing at a discount. So bite the bullet and accept the terms.

Milliemoodle_2

My understanding was that the money will have to be with the sellers' solicitors by 1pm, which means we will have to have the money in on our sale before that. In order for the sellers' solicitors to redeem their mortgage by the end of the business day, they have until 3pm to send their TT.

If the solicitors in the chain beneath us refuse to agree an earlier time for completion then how can we agree to 1pm? We can't complete on our purchase unless we have completed on our sale. My point was that they have set this completion time knowing full well it's unreasonable given the length of the chain and they have upped their charge for a notice to complete, knowing that they will almost certainly be able to charge us for it. The fee for the notice to complete will go to the solicitors, not the client.

They haven't even asked their client if they will agree to a slightly later completion time.

silvercar

One of the special conditions states that completion must take place by 1pm, otherwise it will be deemed to be late and then we will have to pay various charges/interest etc. The solicitors fee for serving a notice to complete is £200 + VAT.

I think you are getting would up unnecessarily. As long as the money gets to the end of the chain by the end of the business day, no-one in their right mind would issue notices to complete.

If you completed at say 3pm instead of 1pm, that could be 2 hours of interest. Normally contracts quote BOE + 4%. This is an annual rate, so 2 hours at an APR of 4.5% on £200,000 would be £2.05.

Milliemoodle_2

silvercar wrote: »

As long as the money gets to the end of the chain by the end of the business day, no-one in their right mind would issue notices to complete.

I think you're right but we have experienced this unfortunately! Last time we moved, there was a chain of 3 houses. The solicitor at the bottom of the chain ordered his client's mortgage money but forgot to order their top-up loan money, so by lunchtime no money had moved anywhere. Our sellers' solicitor served notice to complete on us at about 2pm, even though the completion time was 2pm and the money got to them at about 2.30pm! So I think I am just panicking that we will end up having to pay £200 plus VAT as it doesn't seem possible to reason with the solicitors acting for the bank!

DVardysShadow

Accept the clause and drop the offer by £200.

Richard_Webster

Milliemoodle's points are perfectly reasonable. The standard cut off time is 2pm but most solicitors at the top of a chain don't actually make a fuss or serve a notice to complete as long as they get the money that day before the system shuts.

Problem is that repossession sales are like that - very much take it or leave it.

By the way, if the deposit on exchange is coming up the chain your solicitor may have to amend the draft contract on your related sale to make it clear that the deposit can ultimately be held by a solicitor as agent (not stakeholder as is normal) for an institutional mortgagee, as i am sure your solicitor will haem explained, that is how the lender is likely to want the deposit paid , i.e. so it can immediately go into the mortgage account to reduce the defaulting borrower's liability to the repossessing lender.

Milliemoodle_2

Have had a phonecall from the estate agent dealing with the sale to say that he has spoken to the solicitors concerned and they have verbally confirmed that they won't serve notice to complete provided the money is with them by close of business on completion day. Think that's the best we can hope for! The solicitors concerned get a huge amount of referrals from said estate agents so I am hoping they will keep to their word.

With regard to the point about deposit, our purchase contract states deposit to be held as agent but the sale one hasn't been amended accordingly, so I will contact my solicitor in the morning.

Now let's just hope we can exchange this week.....