Exchange Clause -Completion takes place 9 days from notification of builder?

filbrit

Hi There

We are buying a house and at the point of exchanging from a vendor who is buying a new build by Taylor Wimpey. It seems that what is holding us back is agreeing on completion date.

The vendors were give a date of June/July the new build will be ready but TW would not commit on a completion date. So the clause on our exchange contract states that completion will be 9 days from when the builder gives the notice of completion to the New build of the vendor. TW is giving them 9 days as well hence completion clause was passed on to us too. Vendor said that they are porting the mortgage from the property they are buying and completion has to happen simultaneously and has to be the same on our exchange contract with them as well with them and TW or they would not be able to port.

We are worried being left with this clause for 2 things?

1.) There is a possibility that this june/july will become july/august and so on and so forth. Maybe even go until next year.

2.) If we agree to exchange on this clause and completion does not take place before end of August then our mortgage offer would expire and we have to request to extend the mortgage. Which with the new MMR it does not seem to be straight forward. And if any chance we do not get an extension or get a new mortgage then our deposit will be lost?

Is this normal practice if someone in a chain is buying a new build? Does everyone on the chain has to have the same completion date on exchange contracts? Meaning then with us and them with TW? If let us say we will agree on August completion date on exchange contract with vendors to give them a buffer but vendors have 9 days notice completion on their exchange contract with TW which TW insist, is that also possible?

We are at our wits end and any advice would be greatly appreciated.

kingstreet

Completion "on notice" is normal for a chain with a newbuild in it.

marlot

I'm buying a new build, but am in the fortunate position that I can break the chain (though do have to get a new mortgage).

I would go and look at the development. If they are quoting dates that close, the house should already be well on the way to completion. My builder quoted July for legal completion but the house has just been signed off as build complete and handed over to sales (who do the final clean, fit the carpets etc). I reckon we'll be in around early to mid June.

You are right to be concerned. Some builders and sites are notorious for running late. The only way to be sure is to go and see.

filbrit

marlot wrote: »

I'm buying a new build, but am in the fortunate position that I can break the chain (though do have to get a new mortgage).

I would go and look at the development. If they are quoting dates that close, the house should already be well on the way to completion. My builder quoted July for legal completion but the house has just been signed off as build complete and handed over to sales (who do the final clean, fit the carpets etc). I reckon we'll be in around early to mid June.

You are right to be concerned. Some builders and sites are notorious for running late. The only way to be sure is to go and see.

Thanks for the reply. Vendors said that the roof and the windows are already on and they mentioned that it should go really quick after that. But as expected despite having those the builders still will not give a completion date/month. Just a 9 day completion notice.
Think you are correct having a look around it but there will probably several builds on the development going would be hard to guess which one is it. How long did yours take to get to build complete stage after the roof and windows were up?

thanks again

marlot

I'd ask the question about which plot they're buying - only sounds fair to me.

Taylor Wimpey will have a schedule for completions - you're mainly checking whether your buyer is giving you the right date and if TW have a history of being on time on that site. TW are better than several other builders I could think of. Ideally talk to a few people who have bought on site recently to see if it was on time.

Roof and Windows is actually quite early - and only part of first fix. (google first fix and second fix).

Check whether the date you're being given is build completion or contractual completion.

PS. It's probably 10 working days from TW, with the intermediate solicitor giving himself a day to turn things around.

marlot

FInal thought ... TW may have offered trade-in, but at a lower price than you're paying, so your vendor may be trying to get the best of both worlds by selling privately.

If they want to keep the chain together they might agree to a completion date no later than the middle of August and accept that they have to move into an hotel if their house is late?

dgtazzman

To put things into perspective, the site we are buying at is running 3 months behind schedule and was running 4 months behind at 1 point. Getting straight answers from the builders has been/is difficult, even now we are supposedly less than 3 weeks from completion...

I would agree, insist on a term dictating completion before your mortgage offer expires, they can move into rental and claim it from TW.

marlot

dgtazzman wrote: »

To put things into perspective, the site we are buying at is running 3 months behind schedule...

As a matter of interest, which builder is that?

I've seen major delays in central London when some archaeology has been discovered, and everyone has to down tools whilst it is surveyed and catalogued. But otherwise, delays generally mean poor site management or a builder with cashflow issues.

dgtazzman

That is Keepmoat, a Barratt development down the road from ours is 6 months behind.

In our case, it's just been a combination of circumstances:

* They lease the land from HCA till a property is completed, they have had delays with HCA on progressing things.
* There was a brick shortage at the start of the year.
* They stopped work on our property for 3 weeks in order to complete the first batch before the end of their financial year (not too pleased about that one).
* They have had delays getting gas/water/electricity into the properties.
* They had a hard time finding sufficient trade (especially plasterers), though that seems to have been solved now. Can imagine this to be true as there are quite a few developments going up in our general area.

It hasn't been one large cause for us, just a combination of many smaller delays, but it still has been a pain.

marlot

I was talking to someone from one of the builders recently who said some bricks are on a 46 week back order!

rpc

filbrit wrote: »

2.) If we agree to exchange on this clause and completion does not take place before end of August then our mortgage offer would expire and we have to request to extend the mortgage. Which with the new MMR it does not seem to be straight forward.

You could always insist on a long stop date being put in the contract. Complete with 9 days notice or on last day of mortgage offer.

An alternative would be to allow you to withdraw after the end of the mortgage offer if no extension was forthcoming. Of course, if you can't get an extension and don't move based on this offer, you are somewhat stuck.

TW will not be flexible with your vendors. Therefore one or both of you needs to be a little flexible or you find another vendor/buyer. They could always move into rented...