Seller failing to complete on sale of flat - Help!

mi5tery

rrtt wrote: »

It's the seller causing the angst, don't blame the poor old property! I'm sure all the bad karma will cling to the bad seller when he clears off, and Mr and Mrs mi5tery will create a lovely atmos in the property which they'll be happy in :happyhear

Thank you rrtt.

Indeed let's not blame the property.

Your comment really made us smile.

ValHaller

mi5tery wrote: »

Is my amendment above correct? Also, I'm sure it's blindingly obvious, but what is "STBx" ?

If I understand you correctly, then you've confirmed our suspicion in regards to there possibly being a divorce. Though as advised by jamesd earlier, the key thing for us is to ensure our solicitor removes the charge once *hopefully* completion takes place.

Thanks

Yes, sorry, just spotted my faux pas a few minutes ago.

STBx = soon to be ex

Yes, I do think that this is an asset of a divorce - your solicitor should ensure the charge is lifted as a matter of course.

mi5tery

xylophone wrote: »

Puzzled by this - link says" A. If you decide you do not want to move after exchange of contracts you can be sued for breach of contract by other parties in the chain. Any deposit you may have paid on exchange of contracts will be forfeited by the seller if you fail to complete a purchase after contracts have been exchanged."

Also "The contracts you have signed will contain a clause which states that a certain rate of interest (usually 4% above the base rate) is payable on the purchase price for every day that completion is delayed and the liability for the delay will be passed down the chain but will rest with the party who is at fault. You should also be able to make a claim against the defaulting party for any costs incurred with removal firms or for overnight accommodation should this be necessary."

xylophone wrote:

It means that the seller will subject to seizure as forfeit the deposit put down by the buyer if the buyer fails to complete. http://www.yourdictionary.com/forfeit see transitive verb definition 2

Hi xylophone,

I think something has gotten confused somewhere. Let me start again with this:

The contract is based on the Standard Conditions of Sale (Fifth Edition) ETA: Available here: http://www.lawsociety.org.uk/advice/articles/standard-conditions-of-sale/ . Here is the exact wording regarding late and failed completion:

Standard_Conditions_of_Sale_(Fifth_Edition) wrote:

7.2 Late completion
7.2.1 If there is default by either or both of the parties in performing their obligations under the contract and completion is delayed, the party whose total period of default is the greater is to pay compensation to the other party.
7.2.2 Compensation is calculated at the contract rate on an amount equal to the purchase price, less (where the buyer is the paying party) any deposit paid, for the period by which the paying party's default exceeds that of the receiving party, or, if shorter, the period between completion date and actual completion.
7.2.3 Any claim for loss resulting from delayed completion is to be reduced by any compensation paid under this contract.
7.2.4 Where the buyer holds the property as tenant of the seller and completion is delayed, the seller may give notice to the buyer, before the date of actual completion, that he intends to take the net income from the property until completion. If he does so, he cannot claim compensation under condition 7.2.1 as well.

7.3 After completion
Completion does not cancel liability to perform any outstanding obligation under this contract.

7.4 Buyer's failure to comply with notice to complete
7.4.1 If the buyer fails to complete in accordance with a notice to complete, the following terms apply.
7.4.2 The seller may rescind the contract, and if he does so:
(a) he may:
(i) forfeit and keep any deposit and accrued interest
(ii) resell the property and any contents included in the contract
(iii) claim damages
(b) the buyer is to return any documents he received from the seller and is to cancel any registration of the contract.
7.4.3 The seller retains his other rights and remedies.

7.5 Seller's failure to comply with notice to complete
7.5.1 If the seller fails to complete in accordance with a notice to complete, the following terms apply.
7.5.2 The buyer may rescind the contract, and if he does so:
(a) the deposit is to be repaid to the buyer with accrued interest
(b) the buyer is to return any documents he received from the seller and is, at the seller's expense, to cancel any registration of the contract.
7.5.3 The buyer retains his other rights and remedies.

From my understanding of the above, the seller doesn't automatically lose much by failing to complete, whereby the buyer would immediately lose the 10% deposit.

ETA: Also:

mrs_mi5tery wrote: »

... yes, we're getting 4% back for every day he delays us. But, this is how that is calculated: (purchase price/100*4)/365. Effectively, his 'penalty' for every day he delays us is not even £20. How is that fair - that the buyer forfeits 10% automatically whereas the seller only gets penalised 4% OVER A YEAR, meaning, pittance daily??

If he truly does complete on Tuesday, he will only owe us just under £140 for the delay. In the grand scheme of buying a new house, its nothing.

mi5tery

ValHaller wrote: »

Yes, sorry, just spotted my faux pas a few minutes ago.

STBx = soon to be ex

Yes, I do think that this is an asset of a divorce - your solicitor should ensure the charge is lifted as a matter of course.

LOL - I did say it would be blindingly obvious didn't I? - It's been a long day! Thanks again.

xylophone

If the buyer fails to complete, then his deposit is forfeit to the seller.

If the seller fails to complete then he must repay the deposit to the buyer and pay penalty charges as well.

This seems quite logical and fair?

ValHaller

xylophone wrote: »

If the buyer fails to complete, then his deposit is forfeit to the seller.

If the seller fails to complete then he must repay the deposit to the buyer and pay penalty charges as well.

This seems quite logical and fair?

Losses highlighted in red. Buyer stands to lose considerably more.

Mylo_The_Moggy

rrtt wrote: »

Apart from anything else why on earth shouldn't a couple be planning ahead for a future when they might have a child even if they don't have one already? It's called being sensible, and is something usually encouraged elsewhere on this forum!

People come on here for help and advice at a time when they're particularly stressed and encountering extreme difficulties, seems to me the least the supposed 'helpers' can do is to believe them - you know, along the lines of 'innocent until proven guilty' - and treat them with respect. Considering the value quite rightly put on facts and evidence, it also seems out of order not to ask for clarification of points that strike you as inconsistent before accusing others of being a troll, otherwise you run the risk of being considered a troll yourself ...

Well said!! Couldn't have put it better myself. :T

mi5tery

Thanks ValHaller,

xylophone wrote:

If the buyer fails to complete, then his deposit is forfeit to the seller.

If the seller fails to complete then he must repay the deposit to the buyer and pay penalty charges as well.

This seems quite logical and fair?
Losses highlighted in red. Buyer stands to lose considerably more.

ValHaller wrote: »

Losses highlighted in red. Buyer stands to lose considerably more.

Xylophone, I believe I understand what you're misunderstanding now. ETA: My original statement was that the buyer stands to lose considerable more than the seller when they are in the wrong.

Consider this following section:

Standard_Conditions_of_Sale_(Fifth_Edition) wrote:

7.5 Seller's failure to comply with notice to complete
7.5.1 If the seller fails to complete in accordance with a notice to complete, the following terms apply.
7.5.2 The buyer may rescind the contract, and if he does so:
(a) the deposit is to be repaid to the buyer with accrued interest
(b) the buyer is to return any documents he received from the seller and is, at the seller's expense, to cancel any registration of the contract.

According to my interpretation to the above, according to 7.5.2 - only IF I as the buyer decided to pull out after the seller fails to complete (by the terms in the notice of completion) do I get refunded the deposit (so now I'm back where I started financially in terms of the purchase price - not including any legal fees here) - however, I am also entitled to the accrued interest (about £19 per day).

However according to this section:

Standard_Conditions_of_Sale_(Fifth_Edition) wrote:

7.4 Buyer's failure to comply with notice to complete
7.4.1 If the buyer fails to complete in accordance with a notice to complete, the following terms apply.
7.4.2 The seller may rescind the contract, and if he does so:
(a) he may:
(i) forfeit and keep any deposit and accrued interest
(ii) resell the property and any contents included in the contract
(iii) claim damages
(b) the buyer is to return any documents he received from the seller and is to cancel any registration of the contract.

If the seller were to pull out had I the buyer failed to complete (by the terms in the notice of completion), I'd not only immediately lose my deposit, but also the accrued interest!

So as far as I can see, the seller is an entire 10% of the purchase price better off.

xylophone

There might also be the possibility of pursuing the Vendor for Breach of Contract?
http://blog.aboutconveyancing.com/2009/12/purchase-conveyancing-danger-of-failing.html

BazzaDP

mi5tery and mrs_mi5tery I think you really need to draw a line in the sand. This could drag on for months or years.

If completion does not happen by Tuesday then I would instruct your solicitor to request the funds back from the vendor's solicitor so at least you get those back. Perhaps say you are not withdrawing from the sale just yet, but are uncomfortable leaving the sums with them while such uncertainty exists.

Then you need to have a long, hard think about what you will do if the sale does not happen. Obviously you will lose any costs so far (this can, and should, be claimed back from Vendor but that doesn't mean he will pay). Once you start to think this way, giving up the house won't seem as bad as it does now.

I really hope it works out for you but I think it's time to prepare for it not.

And btw stop feeling sorry for the tenants. They have lied to you at least once.