Chain Collapse Post Exchange

Sausage11

If the person at the top of the chain is now pulling out then does that mean that they are in breach as they will not sell to number 5? If so, would they just need to refund 5's deposit and (potentially) their costs incurred so far?

If that is the case then what does that mean for OP? Could the chain reform with number 2 finding a new buyer and number 5 finding a new house to move into?

At least if this is the case then the OP may be spared some of the risk of everyone's fees cascading onto them assuming that 1 and 2 could not pay.

OP - I really do wish you all the best - it sounds a horrid situation.

G_M

Sausage11 wrote: »

If the person at the top of the chain is now pulling out then does that mean that they are in breach as they will not sell to number 5? If so, would they just need to refund 5's deposit and (potentially) their costs incurred so far?

Presumably the seller at the top served a Notice to Complete on his buyer.
His buyer was unable to comply (having no funds due to his sale falling through).
So the contract was rescinded and damages for breach of contract can be claimed by the seller at the top against his buyer.

chappers

G_M wrote: »

Presumably the seller at the top served a Notice to Complete on his buyer.
His buyer was unable to comply (having no funds due to his sale falling through).
So the contract was rescinded and damages for breach of contract can be claimed by the seller at the top against his buyer.

Could be even more complicated than that as currently it would appear that the person at the bottom of the chain doesn't have the wherewithal to complete on the contract and the person at the top is pulling out, there could be people suing each other all over the place.
However if the people at the top do pull out(I hope their solicitor has made the consequences clear to them), they may just have let the people at the bottom off the hook.

To the OP, have you not at any point been served a notice to complete.

Rutledge88

Apologies, i forgot to mention, yes a Notice to Complete was served by each of the parties and the 10 working days has expired. so far people were willing to wait, but yesterday the guy at the top of the chain accepted a new offer for his property. My solicitor has not yet been informed by my vendors solicitor, that they intend to rescind, but I imagine it is only a matter of time.

I think the whole process is flawed, that neither my buyer or I have done anything wrong, yet the FTB can just file for bankruptcy and my buyer (and then potentially I) will be left with the bill.

tom9980

Rutledge88 wrote: »

Apologies, i forgot to mention, yes a Notice to Complete was served by each of the parties and the 10 working days has expired. so far people were willing to wait, but yesterday the guy at the top of the chain accepted a new offer for his property. My solicitor has not yet been informed by my vendors solicitor, that they intend to rescind, but I imagine it is only a matter of time.

I think the whole process is flawed, that neither my buyer or I have done anything wrong, yet the FTB can just file for bankruptcy and my buyer (and then potentially I) will be left with the bill.

Potentially the FTB solicitors may be liable, they would have also likely acted on behalf of the mortgage company and should have checked and known about the expiry of the mortgage offer which all would have been factored in when doing the exchange and completion dates.

Freecall

With 6 people in the chain is there any chance of them clubbing together (in some combination) to buy the property at the bottom? This will then allow the chain to complete and minimise any on-going losses.

Then the property can be sold on the open market and funds returned to the contributors. Even if this has to be done at a knock-down price for a quick sale you may only be talking a few thousand spread between 5 people, a lot less than the other far more complicated outcomes.

I would even go as far as approaching the solicitor handling the bottom property to see if he would sort this out for you pro-bono given that it could be considered his negligence that contributed to the situation.

pinkshoes

As it is highly unlikely the FTB at the bottom of the chain can compensate everyone, then I am hoping you can all go after their solicitor for expenses, as the solicitor should not have allowed exchange to happen if the FTB's mortgage offer expired before the completion date.

Has the FTB managed to get another mortgage?

I am assuming the FTB probably didn't even realise there would be a problem with a long time period between exchange and completion, and would have been relying on their solicitor to make sure this was fine regarding their mortgage?

Assuming the solicitor was well aware of the mortgage expiry date, then I think the FTB's solicitor should be held liable for costs given their mistake has caused the problem.

If the FTB is the only one that can be held liable, then not sure how this can now happen, as even if they get a mortgage and the chain completes, they would then no doubt lose the house by being made bankrupt being liable for all costs??

What a horrible situation!

eddddy

pinkshoes wrote: »

As it is highly unlikely the FTB at the bottom of the chain can compensate everyone, then I am hoping you can all go after their solicitor for expenses, as the solicitor should not have allowed exchange to happen if the FTB's mortgage offer expired before the completion date.
....

The OP (and others in the chain) cannot go after the FTB's solicitor - because they have no contractual relationship with him/her.

As mentioned above, the only person the OP can claim from is their buyer.


(However, if the FTB's solicitor really was negligent, the FTB can make a claim against them, which could eventually cover everyone's costs.

But, my guess is that the FTB's solicitor warned the FTB about the risks of exchanging, but the FTB decided to exchange anyway. In which case, the FTB would be fully liable - not the solicitor.)

danslenoir

Freecall wrote: »

With 6 people in the chain is there any chance of them clubbing together (in some combination) to buy the property at the bottom? This will then allow the chain to complete and minimise any on-going losses.

Then the property can be sold on the open market and funds returned to the contributors. Even if this has to be done at a knock-down price for a quick sale you may only be talking a few thousand spread between 5 people, a lot less than the other far more complicated outcomes.

I would even go as far as approaching the solicitor handling the bottom property to see if he would sort this out for you pro-bono given that it could be considered his negligence that contributed to the situation.

Wouldn't it be simpler to:
-Approach one of these quick sale property companies (some advertising that they can exchange in 48 hours) to sell the bottom property quickly
-Get everyone in the chain to equally foot the shortfall between the quick sale price and the previously agreed sale price with the FTBs (who are now unable to purchase) so that the vendors of the bottom property are not unfairly out of pocket

Anyway, that's a moot point now that the vendor at the top of the chain has accepted an offer from someone else and left the chain; it's screwed at both ends.

fairy_lights

Rutledge88 wrote: »

yesterday the guy at the top of the chain accepted a new offer for his property.

But surely he can't just decide to sell to someone else, if his current buyers have already exchanged contracts on the property?