House Purchase - covenant / certificate mega confusion

johnorama

Hi Everyone, thank you in advance for your help.

I am in a very tense and confusing situation with regards to a house I am in the final stages of purchasing. We are past our original completion date, have to leave our rental on 31st and everything seems to have come to a stand still ... hopefully someone can give me some assistance.

The house we are buying is 5 years old, built by charles church. On the deeds there is a covenant regarding an annual management fee for the amenity areas on the estate. The deeds state a certificate must be provided by the builder or management company to confirm that we agree with the covenant and will take it on.

This is where the confusion starts. We are fine with taking on the fee, thats not the issue.

Our solicitor is adamant that we do not need the certificate until after we complete, and he simply needs to confirm some information to ensure we can get the certificate, then he is happy to go ahead and exchange, complete then sort the certificate out afterwards.

Our vendors solicitor is adamant we need the certificate now, that we must sign to say we agree to the covenant, and that the certificate is on its way and should arrive in the next day or so.

It seems neither of the solicitors are speaking to each other as this has been going on for a week and a half now and I would expect if there had been any actual spoken contact they would have cleared it up...

I am in no way an expert, but I would have thought the certificate would have been needed before sale myself, as what happens if we cant get it afterwards or decided we dont agree to the covenant after completing on the property...

Has anyone had any experience with this sort of thing in the past? We are super stressed as we are on the verge of being left homeless, but no one is communicating and Id just like some reassurance either way!

Thanks

redonion

Whoa, I wrote more than I intended. I'm a worrier myself so I sympathize I guess.

It sounds like you're concerned about several different things, but may not have fully thought through exactly what the possible outcomes are and what the consequences might be. Write each thing down so you know what you actually should be worried about, and what the worst that could happen is. You'll probably feel better after that and will know what if anything you need to do.

Being in a position of being homeless if you don't complete by a certain date definitely is bad, but from what you say my (inexperienced) guess would be it doesn't sound like it's going to stop you completing, or even stop you completing on time.

So what are you worried about, exactly?

1. Certificate turns up after exchange and you don't want to sign. Remedy: go and talk to the neighbours-to-be. Knock on doors. If you're far away, maybe try something like 192.com and ring them up. What have they had to pay/agree to? I wouldn't be surprised if they haven't given it a thought since they moved in, but you won't know until you ask. Also, definitely google the company's name, some of them are crooks. I'd worry more about that than about the paperwork, though you hear far more about dodgy management companies for flats than houses (perhaps that's just because there are fewer houses that have common amenities to maintain).

2. Certificate doesn't turn up and completion is delayed by seller. That would be bad. However, if the worst were to happen, could you stay in a hotel / with parents / with friends for a few weeks? Maybe you can talk to your landlord politely and extend? Would it really be a disaster? Also, if it's really worrying you, could you just phone the management company direct and ask to show up at their door and collect a certificate in person? If that works, job done (though you might want your solicitor to take a glance before you sign, and more important read it yourself). If you don't know who they are, your solicitor should know, or you might be able to find out on the land registry (3 quid per copy).

3. Cannot get certificate after exchange. Consequence: management company doesn't get your money. I don't see any downside for you?

4. Sale falls through. This could happen for other reasons too of course, even late on. I'd say this is the one you should worry about. Seems unlikely this covenant will cause it to fall though, but you should think through what you'd do if it happened and what that means you should do right now - then stop worrying.

I expect the seller's solicitor wants you to sign before exchange because if you don't, the seller is still liable. Your solicitor has your interests in mind, so he doesn't care. In your position I'd want to make sure your solicitor understands that you're in a hurry and (s)he should just pander to the seller's whim as far as you're concerned.

johnorama

hi

Thanks for the reply! Much appreciated. Also worth mentioning we are first time buyers so its all completely new to us...and that the process started in march, with 2 other properties falling through. 1 due to bad survey the other due to seller lying and not even having their mortgage approved. Nightmare!

I also neglected to mention, the vendor has never paid the management fee, nor has anyone on the estate. It was a panic when we first heard that, but we found out that the estate had only been recently finished after being vastly delayed and that was the reason why no one has ever paid anything. It turned out it is the original builder (Charles Church) who has to issue the certificate when this is the case as the management company hasnt taken over yet. The vendor apparently has some contacts there and spoke to their legal team directly.

The main concern for me is how one solicitor thinks one thing yet the other the opposite. Both are maintaining they are adamant they are right, although without seemingly speaking to each other about it. Because of this difference of opinions it is causing everything to stand still - our solicitor has requested the info he thinks he needs, but their solicitor is waiting for the certificate.

Our solicitor has told me "it" says that we dont need the certificate until afterwards. I have had a good read of the deeds and cant see that anywhere myself. Their solicitor says we need it before... and personally i dont see how we can be allowed to buy a house without accepting these clauses on the deeds before / at the point of purchase...

Unfortunately we have 2 young puppies as well which seriously limits our options in terms of places to stay etc if there is a major delay. Extending where we are is also tough, we have had 2 other houses fall through and each time our landlord has been great and has let us extent, almost on a monthly basis ... we dont really want to mess him around any more than we have. Our solicitor tells us as we havent had legal notice to leave we could just stay and refuse to go, theres no way we can do that though - he turned some people who wanted the place away after we had a purchase fall through so we cannot repay him like that! Our solicitor will not understand that its not an option though no matter how many times we say it!

I know the vendors are equally eager to get it completed, theyve pre-signed for their property already, as have we... its literally this one thing holding it all up. No one seems to be doing anything so I'm wondering if theres anything I can do to sort it myself!

Thanks again! Sorry for the essay!

G_M

johnorama wrote: »

Hi Everyone, thank you in advance for your help.

I am in a very tense and confusing situation with regards to a house I am in the final stages of purchasing. We are past our original completion date, have to leave our rental on 31st and everything seems to have come to a stand still ... hopefully someone can give me some assistance.

'Past your original completion date'? I suspect not. Until you have Exchanged contracts, there IS no completion date. (unless you have already exchanged, in which either you, or the seller, is now liable for considerable penalties).

'have to leave our rental on 31st'? Why? Have you given notice? Crazy. Did the landlord give you notice? Has he got a court possession order?

johnorama

Hi

As it's been such a long winded process our contract here actually expired in June. After that we extended almost monthly verbally, but we did tell him we would be leaving end of October, even just to go to another rental (layout of the house isn't great for 2 pups). I'm not sure how much a text would count as official notice though...

Obviously now with the purchase on edge of completion renting elsewhere isn't really an option

G_M

johnorama wrote: »

Hi

As it's been such a long winded process our contract here actually expired in June. After that we extended almost monthly verbally,

Do you mean:

1) you verbally created a new one month fixed term tenancy? Each month? or

2) you allowed/agreed the previous tenancy to become a Statutory Periodic Tenancy ('rolling' or 'monthly')?

If 1) above, you cannot be evicted (via a S21 Notice) by the courts for 6 months.

If 2) above, the LL needs to give you 2 full tenancy periods notice via a S21 Notice (this could be almost 3 months notice).

Ending/Renewing an AST (what happens when the Fixed Term ends?)(What is a Periodic Tenancy?)(How can a LL remove a tenant?)(How can a tenant end a tenancy?)

johnorama

Thanks for the reply. I'm not actually sure which it would be classed as. It was all pretty informal ... "Are we ok to stay another couple of months?" "Yeah no prob" was pretty much it

G_M

johnorama wrote: »

Thanks for the reply. I'm not actually sure which it would be classed as. It was all pretty informal ... "Are we ok to stay another couple of months?" "Yeah no prob" was pretty much it

Since no fixed dates were mentioned, I would interpret this as my option 2 above.

johnorama

Thanks for the info. Am I right in thinking legally there needs to be 4 days between exchange and completion?

redonion

G_M wrote: »

Since no fixed dates were mentioned, I would interpret this as my option 2 above.

Forgive me for stating the obvious, but of course even though there is a statutory notice period of 2 months, people are still far better off staying on good terms with their landlord that shoving their statutory rights in their face.

Obviously johnorama has succeeded in doing that so far, and that has benefited them.

G_M

redonion wrote: »

Forgive me for stating the obvious, but of course even though there is a statutory notice period of 2 months, people are still far better off staying on good terms with their landlord that shoving their statutory rights in their face.

Obviously the johnorama has succeeded in doing that so far, and that has benefited them.

Absolutely! I agree anything is possible where LL/tenant agree, and amicable agreement is always preferable to legal enforcement of rights.

However, the OP said:

have to leave our rental on 31st

and

We are super stressed as we are on the verge of being left homeless

which kind of implies the OP thinks they have exhausted the LL's generosity/willingness to be flexible.

It is thus always helpful to understand the legal 'bottom line', which is what I have attempted to make clear.