Vendor wants to exchange with no completion date?

rtho782

We're FTBs, our vendor is moving into a new build.

This whole process has been far more hassle than I could ever have imagined, and if we pull out now we stand to have lost about £1200 in fees, surveys, etc etc.

The vendors originally told us their new build would be ready end of may/early june. This was fine.

They desperately wanted to exchange contracts before the bank holiday weekend, but then told us they could not offer any completion date and wanted to complete "on notice" as that's what they have agreed with the developers.

They are refusing to have any form of calendar backstop in the contract.

In theory, they could move into their newbuild, then decide to rent out their old house for the next 5 years, so that we pull out and give them our deposit.

If our landlord insists on a new 12m tenancy at the end of June, then we face either losing up to £10k by pulling out of this mid term, or moving into temporary accommodation and putting our stuff in storage. I'm not willing to do this.

Our mortgage offer runs to late september, and the provider will not allow us to exchange without a backstop before this date. The suggestion made was that we find another mortgage provider.

At this point, I'm leaning towards pulling out.

Am I being unreasonable?

GaggingOrder

I think you're being perfectly reasonable. Personally I would be put off buying a place if I knew the vendor was waiting for a new build as I've seen the delays many friends have experienced. I think it's fair to agree a backstop date, ideally one that suits your rental timeline, and if they can't move into their new home it becomes their problem. Perhaps to give something back you could ask your landlord if s/he would be open to a short extension of, say, 3 months, then you won't seem as demanding. But open ended is nuts.

rtho782

Thanks, I'm very annoyed and frustrated right now as I'm sure you can appreciate!

I can't see them finding another buyer willing to just agree to an open ended contract.

Bubblecat

rtho782 wrote: »

We're FTBs, our vendor is moving into a new build.

This whole process has been far more hassle than I could ever have imagined, and if we pull out now we stand to have lost about £1200 in fees, surveys, etc etc.

The vendors originally told us their new build would be ready end of may/early june. This was fine. Is this still the case or has it been delayed?

They desperately wanted to exchange contracts before the bank holiday weekend, but then told us they could not offer any completion date and wanted to complete "on notice" as that's what they have agreed with the developers. This is standard for buying a new build that isn't yet ready.

They are refusing to have any form of calendar backstop in the contract. I wouldn't be happy with that!

In theory, they could move into their newbuild, then decide to rent out their old house for the next 5 years, so that we pull out and give them our deposit. Is their purchase of the new build reliant on the sale of their current house to you? If it is, then it is highly unlikely that the scenario you have put forward would happen.

If our landlord insists on a new 12m tenancy at the end of June, then we face either losing up to £10k by pulling out of this mid term, or moving into temporary accommodation and putting our stuff in storage. I'm not willing to do this. You don't have to sign a new agreement. You can go onto a rolling periodic contract. If the landlord isn't happy with this then he could serve you notice but by the time he goes to court etc to have you evicted you should have (hopefully) completed the purchase by then.

Our mortgage offer runs to late september, and the provider will not allow us to exchange without a backstop before this date. The suggestion made was that we find another mortgage provider.

At this point, I'm leaning towards pulling out. If I was in your shoes I would be telling them that I will not agree to exchange without a backstop date and if they won't agree to one then I would have no other option but to pull out as I'm not willing to take the risk.

Am I being unreasonable?

How hot is the market where you are? Are houses selling quickly? If not, then they would be fools to not try and get the developer to agree to a backstop date.

mrginge

No, you are being perfectly reasonable.
they should have a long stop date in their purchase allowing them to pull out without penalty if for example, their sale to you falls through. If they don't have this then they've screwed up.

agreeing to this request just shifts their risk down on to you. They should agree a fixed completion date with you and move into rented if their new build is not ready.
Depending on how saleable their property is I would be tempted to explain that you want to exchange by X date with a completion date of Y and if they can't agree to then they take the risk that you don't find somewhere else in the meantime.

rtho782

Our most recent update on new build timeframes, via the EA, was "Mid-late May". It's been like getting blood from a stone getting information on this from them, or anyone else, and the fact that they won't agree to a backstop makes me think it has slipped and they are not telling us, hoping to tie us in with a contract first.

I understand that completion on notice is standard for buying a newbuild, and I'm happy to have up to 6 weeks of overlap between old house and new, I'd be happy to have only 1 days notice of completion, but my "completion window" would be from today to end of june. I'm not buying a new build, so more than that and I feel they should risk having to move into temporary accommodation, not me.

I have a feeling their purchase of the new property is not wholly reliant on selling the existing one - as they must have exchanged on the newbuild already, this process has been going on since late feb. That is just one scenario as to how we could end up waiting for many years to complete!

I know we'd go onto a rolling periodic tenancy by default, it's too late for the LL to serve a S21 to leave at the end of the minimum term now, but they could serve one tomorrow to end at the end of the first periodic rental period. If I have to find another house, I'd rather do it now than later. I'm not willing to take everything on a wing and a prayer and make my LL go through an eviction process, potentially making it hard for me to rent again if we need to because the sale falls through.

The market is reasonable here, but their newbuild development is now closed (all properties sold) so I don't suppose the builder wants to remarket their new property.

I'm about to email the EA saying we will pull out if they do not capitulate within 48 hours.

TrickyTree83

I think you need to be much more forceful. You're right you can't hang around waiting on them. You're putting yourselves out for their benefit. There needs to be some mutual understanding that compromise is required, that you won't wait on an open ended deal and they shouldn't expect you to either. I would politely explain to the EA that this arrangement is unacceptable and that unless a deadline can be given that you will have no option but to look elsewhere. Once you exchange contracts the financial penalties for you pulling out increase dramatically. Pulling out now and losing £1,200 in fees would seem reasonable by comparison.

I recently sold my house and I'm buying a new build that will complete in August 2016. I moved out and I'm living with parents (I consider that lucky, some wouldn't) but I was quite prepared to rent out whilst we waited for the new build to complete. The developer says August 2016 but if the summer is wet it could be a disaster and run into next year, that's my risk.

kazwookie

Be more assertive, get a date and get them out and you move in, let them rent / move in with family etc not you.

Good luck

westernpromise

kazwookie wrote: »

Be more assertive, get a date and get them out and you move in, let them rent / move in with family etc not you.

Good luck

This.

The vagueness of their own completion date is a problem of theirs that they're trying to make into a problem of yours. The fact is that if they don't know when they can complete, then they are not a proceedable seller. I would walk unless they give you a firm date.

pinkshoes

Tell them to commit to a completion date, and if their new build isn't ready, then they can put their stuff in storage and live in a hotel!!

No completion date, no exchange.

Or agree an open completion date, but the need to pay 6 months rental for you, and any other costs incurred.

rtho782

Thanks all,

According to the EA (yet to hear from my solicitor) the vendor has now agreed to a backstop of 30th June and will move in with parents if needed. They may complete earlier via notice to complete. I'm happy with this, so yay!