Seller failing to complete on sale of flat - Help!

mi5tery

Hi all,

This is my very first post on the forums, so I hope I'm not doing anything wrong posting here.

Essentially we exchanged on a flat and were supposed to complete yesterday - this didn't happen due to the seller! My wife and I need to be in by July, what can we do?!

Below is the abridged version:

We had previously been messed about by the seller between offer and exchange, as such we had specific elements written into the contract we exchanged which included items such as:i) if the seller pulled out he would have to cover our legal and survey fees, ii) that the garden would be cleared out, iii) the furniture which was to stay/go - nothing huge, just things he had already agreed to already. The key thing however was that the property was to be conpleted with vacant possession.

I went to the property yesterday to inspect prior to completion and to get the keys, however there was no one to meet me at the agreed time. The garden has a side entrance, and when I spied on it, I could see none of the work required had been done!! Despite this, I waited, let's see that the property is as it's meant to be. about 20 minutes later a guy turns up who turns out to be a tenant for the flat I am supposed to be completing on! He claims to have no knowledge of having to move out, and informs me there are two other guys flat sharing the flat. He proceeds to use his key and go in! I am shocked! This all happens whilst I'm on the phone with my solicitor - she too is shocked! I call the agent (it's his day off) - he too is shocked! My wife is in shock - by now we could power the houde with our shock alone! Our funds are with the sellers solicitors, luckily however they are being 'held to order' - which apparently means they can't be released without express permission from our solicitor. A whole day off work wasted!

Having spoken to our solicitor we decide to serve a notice of completion, this was served before close of play.

The seller lives up North, and the flat is in London - he doesn't feel he needs to come to London to complete the sale instead has instructed one of his friends (let's call him M) to hand the keys over. Apparently M (his friend) was going to clear the tenants out and ensure the flat was as required that evening. This morning, M called the estate agent and arranged a time he would be available to allow inspection of the property and hand over the key for completion - oh and the tenants had all moved out last night (when I heard this I was immediately worried about the tenants).

Today, I was on route to the flat as agreed with the EA and I got a call fro mthe EA informing me that M was unavailable and wouldn't be able to come until late in the evening , and instead would like to do everything tomorrow morning. My second day off work wasted!

After my wife finished at work, we both decided to drive by the flat and see if the garden at least had been emptied. It hadn't, furthermore, the neighbour who has been storing things in the garden hasn't even been made aware it all needs to be cleared out (she was there when we turned up and spoke to her directly)! Before leaving, we thought might as well ring the door bell... someone opened the door! Tenant number two of OUR flat! He confirmed there were in total three tenants still living in the property and furthermore he claims to know that they are supposed to receive a notice to terminate their AST but as yet have not received any notice! Neither are they in any position to move out! Once again all round shock - except my solicitor doesn't know yet as it's past COB.

Sorry for such a long post, thanks for reading, but believe me this is the abridged version!

My wife and I are distraught - any advise gratefully received.

mi5tery

xylophone

http://www.chattertons.com/Personal-Law/Conveyancing-FAQs.aspx

mi5tery

Thanks xylophone,

From what I can see all the penalties are for the buyer not the seller!

If I were in breach of contract preventing completion I would be liable to lose my deposit, however the seller, well... nothing? What can I do?

The worst thing is the seller keeps hassling about completing, almost as if he needs the cash immediately, yet the property isn't even vacant!

There seems to be lots of information about buyers not completing, but not much regarding penalties for sellers, or what further actions are possible.

Guest101

Ok, let's just check a couple of things.

Did the seller, sell the property with vacant possesion? You need to check the contract.

Are you buying with a mortgage?

You need to start taking notes of expenses you've accrued.

Start with bigger things - IE Days off work, moving costs, etc.

Are you buying to live or rent?

If you complete now, it is likely you would become the LL for these tenants. You could serve notice straight away; provided they are outside the Fixed Term element of their AST, they would have 2 months (if its periodical monthly) to vacate. However there are a 101 elements to being a LL if you arent one already.

You're dealings should be with the EA and with the vendor. Whoever M is, needs to drop off the keys at the EA and be done with it.

You can force the sale through, you can get back expsnses and costs, and even some compensation. BUT it wont be a walk in the park. You may be better off getting fees etc back and walkign away.

I assume you paid a deposit already.

Technically speaking the property is yours, you have paid for it. You need to check with your solicitor regarding this, and the TR1 form (have you rec'd/signed this?)

mi5tery

Hi Guest101,

Thank you for your reply.

Guest101 wrote: »

Did the seller, sell the property with vacant possesion? You need to check the contract.

The Contract specifically says: The Property is sold with vacant possession on completion.

Are you buying with a mortgage?

Thankfully no, though I have taken out private loans from family.

You need to start taking notes of expenses you've accrued.

Start with bigger things - IE Days off work, moving costs, etc.

Thanks, I'm going to start making a list now. Can I also list things like fuel driving back and forth? What about time having to make calls?

Are you buying to live or rent?

We're buying to live.

If you complete now, it is likely you would become the LL for these tenants. You could serve notice straight away; provided they are outside the Fixed Term element of their AST, they would have 2 months (if its periodical monthly) to vacate. However there are a 101 elements to being a LL if you arent one already.

No I am not a LL, and don't want to be either. I have seen a copy of the tenancy agreement and it states the AST ends 31 Oct 13, and I believe there is a two month notice period.

You're dealings should be with the EA and with the vendor. Whoever M is, needs to drop off the keys at the EA and be done with it.

Cheers for the confirmation, that's exactly what my wife and I are thinking.

You can force the sale through, you can get back expsnses and costs, and even some compensation. BUT it wont be a walk in the park.

How does forcing the sale impact the existing AST? It's obviously not my fault the seller has not vacated the property, neither is it the tenants fault that the seller has not followed the proper procedures regarding their tenancy.

You may be better off getting fees etc back and walkign away.

We've been looking for over a year, and quite simply for the school catchment area, and size of the flat, there's nothing else in the area. Hence walking away is not really an option at this point.

I assume you paid a deposit already.

We've actually paid the full amount, it's sitting with the sellers solicitor and is being 'held to order' - which my solicitor assures me means it cannot be released to the seller without her say so.

Technically speaking the property is yours, you have paid for it. You need to check with your solicitor regarding this, and the TR1 form (have you rec'd/signed this?)

We have signed and returned the TR1 form to the solicitor.

G_M

Since you are buying "with vacant possession" under NO circumstances allow Completion to take place (and your money to be released) until you have personally checked that the tenant have gone and the property is vacant.

Forget the garden and furniture clauses - these are minor and can be pursued later.

But the reality is that it can take months to evict tenants. You must NOT becomelandlords and takeover responsibility for evicting them. The seller must do this before Completion.

To be honest, I would discuss with your solicitor cancelling the contract and suing the seller for .... everything.

Naturally, since you are now homeless, your hotel bill will be mounting nightly.......

Guest101

mi5tery wrote: »

Hi Guest101,

Thank you for your reply.


The Contract specifically says: The Property is sold with vacant possession on completion. - Good, that's the crux of your argument. Now then, on the contract, there should be a section for occupiers to sign to confirm they will vacate the property. Is there any signature there?


Thankfully no, though I have taken out private loans from family.
- Good, so atleast you're not out fees etc.

Thanks, I'm going to start making a list now. Can I also list things like fuel driving back and forth? What about time having to make calls? absolutely, the bigger the list, the better. (you may not get this back, but it's important - See point below) - however if he doesnt go for the point below, then you can expect to get this back and more. Just dont expect both


We're buying to live. does that mean you've sold somewhere? Are you likely to end up in breach yourself because of this, or worse still homeless?


No I am not a LL, and don't want to be either. I have seen a copy of the tenancy agreement and it states the AST ends 31 Oct 13, and I believe there is a two month notice period. Bad. The AST cannot be broken, not without the agreement of the tenants. However the LL can offer them incentives to agree to early surrender. Your list of expenses really could come into play here, if your Vendor is set to lose £5k to you, he could offer them £3K to leave early (if that makes sense) - He can give notice now, but they can stay until 31 oct 13, and even longer if they become awkward.
If the vendor doesn't go for this, be prepared to sue, for a lot.


Cheers for the confirmation, that's exactly what my wife and I are thinking. Absolutely, this M, is not your contact, you have no contract with him/her. Just wasting your time with it.


How does forcing the sale impact the existing AST? It's obviously not my fault the seller has not vacated the property, neither is it the tenants fault that the seller has not followed the proper procedures regarding their tenancy. Unfortunately the AST is still in the Fixed Term stage, so if you do force it, you will become their LL. I would not complete until they have signed an early surrender settlement, and have moved out. But by all means keep charging the Vendor. There have been cases where sales have been forced through even years after they failed to complete. At the original price. A bargain for the buyer, getting a 200k house for 110. I appreciate that's not ideal for you. But as you say it's not the tenants fault either, and they are legally protected


We've been looking for over a year, and quite simply for the school catchment area, and size of the flat, there's nothing else in the area. Hence walking away is not really an option at this point. Fair enough, fight it is. Let's see what your solicitor tells you in the morning. I imagine they will say rescind the contract and get some compensation, but you do not have to accept this.


We've actually paid the full amount, it's sitting with the sellers solicitor and is being 'held to order' - which my solicitor assures me means it cannot be released to the seller without her say so. - I would be concerned, just slightly that they aren't going to claim the purchase is completed. Of course the contract is not correct, but out of principle, I would ask for proof the money is held safely.


We have signed and returned the TR1 form to the solicitor. Good, just make sure your solicitor hangs on to it.

Please see replies in red, above

AFK_Matrix

To be frank your going to either have to take over the tenancies and become a landloard as their AST doesn't finish till October. You can then serve your Section 21 notice in August thus giving 2 months notice. Then you have to prey they do vacate at the end of the 2 months otherwise you have to go to court, then get balifs etc which all costs money.

Or get your solicitor to talk to the vendors solicitor to demand they give notice to the tenants in August and again hope they move out in October. You will also as previously said need to demand compensation from the vendor as he is liable for your expense as he hasn't completed.

mi5tery

Thanks for taking time to reply G_M,

G_M wrote: »

Since you are buying "with vacant possession" under NO circumstances allow Completion to take place (and your money to be released) until you have personally checked that the tenant have gone and the property is vacant.Thank you for your advice, I've told the EA that he should check out the flat first, and if he thinks it's all fine, then to let me know and I will personally check, and then and only then will I ask my solicitor to complete.

Forget the garden and furniture clauses - these are minor and can be pursued later.I realise these are minor, but won't it be a nightmare trying to chase this all through small claims later?

But the reality is that it can take months to evict tenants. You must NOT becomelandlords and takeover responsibility for evicting them. The seller must do this before Completion.

To be honest, I would discuss with your solicitor cancelling the contract and suing the seller for .... everything.How does one put a value on the pain, heartache, stress etc?

Naturally, since you are now homeless, your hotel bill will be mounting nightly.......My wife and I are staying with my parents at the moment so thankfully not homeless. However, is staying in a hotel a reasonable option? As we'd have to pay these costs upfront, would taking out a short term lease work out cheaper?

Please see replies in red, above (Thanks Guest101 for showing me this trick):T

G_M

I've told the EA that he should check out the flat first, and if he thinks it's all fine, then to let me know and I will personally check, and then and only then will I ask my solicitor to complete.
Well by all means use the EA if you prefer as a starting point, but do not rely on them. CHECK YOURSELF.

I realise these are minor, but won't it be a nightmare trying to chase this all through small claims later?You are going to be claiming all sorts of costs anyway. These just get added on.
For now, focus on
* getting Completion with vacant possession or
* getting the contract cancelled (if you don't want to wait months)

Either way, you will be claiming all your costs and more.

How does one put a value on the pain, heartache, stress etc?
You don't. You claim quantifiable financial losses. Down to the last phone call.
.......My wife and I are staying with my parents at the moment so thankfully not homeless. However, is staying in a hotel a reasonable option? As we'd have to pay these costs upfront, would taking out a short term lease work out cheaper?
Discuss with your solicitor, but a hotel seems perfectly reasonable. If your parents lived overseas, and you had nowhere to go......Discuss claimimg an interim payment towards hotel bills- doubtless your parents will either kick you out in a week, or be charging you rent???

Do not feel any sympathy for these dirt-rags. The seller must have known there were tenants there. he has deliberately dropped you in it.

(when it's all over, drop HMRC tax-fraud line an email in case he's not been declaring his rent for income tax....or capital gains tax after the sale)

mi5tery

Guest101 wrote: »

Now then, on the contract, there should be a section for occupiers to sign to confirm they will vacate the property. Is there any signature there?Sadly no.

"We're buying to live." does that mean you've sold somewhere? Are you likely to end up in breach yourself because of this, or worse still homeless?No not selling, not part of a chain thank god, not homeless as staying with my parents for the moment. Though have to think about accommodation soon.


"No I am not a LL, and don't want to be either. I have seen a copy of the tenancy agreement and it states the AST ends 31 Oct 13, and I believe there is a two month notice period."
Bad. The AST cannot be broken, not without the agreement of the tenants. However the LL can offer them incentives to agree to early surrender. Your list of expenses really could come into play here, if your Vendor is set to lose £5k to you, he could offer them £3K to leave early (if that makes sense) - He can give notice now, but they can stay until 31 oct 13, and even longer if they become awkward.
Okay, correction, it seems the tenancy agreement I was sent was an old one, I saw the expiry date as 31 Oct 13, and start date 1 May 2012 and says it's for 6 months. I know a new agreement has been made since, but don't know the details. I'll speak to my solicitor tomorrow and see if I can get the exact details.
If the vendor doesn't go for this, be prepared to sue, for a lot.What would I be suing for?

I would not complete until they have signed an early surrender settlement, and have moved out. But by all means keep charging the Vendor. Currently the vendor is being charged 4% of the flat price (I think it works out like £20 per day), is this still chargeable after the notice to complete expires?


Fair enough, fight it is. Let's see what your solicitor tells you in the morning. I imagine they will say rescind the contract and get some compensation, but you do not have to accept this.Right, thanks.


We've actually paid the full amount, it's sitting with the sellers solicitor and is being 'held to order' - which my solicitor assures me means it cannot be released to the seller without her say so. - I would be concerned, just slightly that they aren't going to claim the purchase is completed. Of course the contract is not correct, but out of principle, I would ask for proof the money is held safely.Does an email from the vendors solicitor saying "As stated earlier we will hold funds to your order." suffice?


We have signed and returned the TR1 form to the solicitor. Good, just make sure your solicitor hangs on to it.I'll make sure I talk to her about it first thing in the morning

All replies posted in red above