Money received late by Vendor on completion day

Wig

knowledgeman wrote: »

Sorry but you breached the contract

Close of business is 5pm, even if the contract didnt stipulate 215pm you failed to complete before close of business on friday and breached the contract

That is your/your solicitors fault and not the vendors etc etc

They have every right to be aggrieved

So who pays?

ms_tar

Richard_Webster wrote: »

Most contracts say the money has to arrive in the seller's solicitor's bank account by 2pm. If it doesn't, technically it can be treated as a late payment and interest charged.

Sellers have mortgages to pay off and this often has to be done by electronic bank transfer. Most solicitors consider it bad form to charge interest if the money arrives by the close of banking business which is sometime between 3.30 & 4pm. Others are awkward and insist on charging in any event.

If the mortgage can't be paid off for a day or two then the extra interest on the mortgage of a seller would be a fair enough charge - the contract rate is usually Bank Base Rate + 4% on the balance of the purchase price after the exchange deposit has been allowed for.

Who's fault? Difficult to say. Have a look at this thread where I explain the kind of nonsense that some lenders create before they will send the money:

http://forums.moneysavingexpert.com/showthread.html?t=550114

I have just heard today that people buying a property from one of my clients are driving from Hampshire up to Leicester to present themselves with passports etc at the head offices of the Alliance & Leicester in the hope that will cause the mortgage money to be sent to their solicitors! You might wonder how the mortgage offer got issued in the first place without the ID!

So how much can vendor charge. Could it be more than the contract rate (which I think will be around 10%) on purchase price for 2 days (assuming that money did reach the vendor's account on late Friday)? Also will there is any responsibility towards vendors higher in chain?

Thx

System

Wig wrote: »

So who pays?

Don't know what the law says, but common sense says that if you are employing a solicitor to do the job then it is his responsibility to have everything in place at the appointed time. Liability is his/hers.

pinkshoes

I would guess it's the solicitor that pays, because surely it's THEIR job to make sure everything goes through, and that's what you pay them for!?!?

If the money still went through, albeit at 6pm, then surely completion was still on that day, because if business was "closed" then the money wouldn't have gone through would it, then you wouldn't have got the keys?!?!

What was the actual problem? Is the vendor saying they missed out on an hour of interest on the money or something?!?!

knowledgeman

Id imagine you as the buyer are liable to the vendor

However depending on whether your solicitor is to blame for the late payment (i.e wholly their own fault) you may have a claim against them

If its a case other aspects were not put in place by yourself quickly enough then its your fault

If the money came later from a lender etc than expected unless you can show they broke a contract then its still your problem

Richard_Webster

It might be the solicitors fault but he might have done all he could to get the money in time and found some entirely unforeseeable problem had emerged.

I think you will need to wait to see what explanation is given by the solicitor, and what the solicitor could have done about it at each stage.

It might be the lender's fault or caused by their inefficiency, in which case letters to their head office/Chief Executive might produce some result.

ms_tar

Richard_Webster wrote: »

It might be the solicitors fault but he might have done all he could to get the money in time and found some entirely unforeseeable problem had emerged.

I think you will need to wait to see what explanation is given by the solicitor, and what the solicitor could have done about it at each stage.

It might be the lender's fault or caused by their inefficiency, in which case letters to their head office/Chief Executive might produce some result.

Richard,

Does a solicitor has to make sure that money has been received from Lender a day before completion? I am not sure how whether lender tells solicitor how many days in advance. Is it a part of communication between solicitor and lender? What was the the Halifax's technical problem you referred in what one of your other posts?

Thx...

Wig

Do you think it might be a good thing to agree before instructing a solicitor that in the event of something like this happening the solicitor agrees they are responsible for the late payment, and if they think they have a claim against for example the lender then it is their responsibility to persue that claim.

I can't see any solicitor agreeing to such a clause but atleast it will allow you to bring the subject up for discussion with your solicitor beforehand so you can see what their attitude to this is likely to be.

Richard_Webster

Richard,

Does a solicitor has to make sure that money has been received from Lender a day before completion? I am not sure how whether lender tells solicitor how many days in advance. Is it a part of communication between solicitor and lender? What was the the Halifax's technical problem you referred in what one of your other posts?

Thx...

Normally we would do that and if we didn't trust the lender we would either advise a longer period between exchange and completion. Most lenders want 5-7 working days but some of the better ones will perform more quickly.

The point I had with the Halifax recently was over the client's name. Typically mortgage broker gets client's name down: "John Smith" - offer comes out in that name but he has filled in our forms and provided a passport with "John Edward Smith" so when we fill in the Certificate of Title to send to the lender we add the middle name. Normally it doesn't cause any problems. In this particular case my client had a double barrelled surname and a number of firstnames and conventionally used the last of his firstnames and a version of his surname without the second double-barrelled bit. The mortgage offer came out with the shorter version.

This caused more problems because they had no documents with the full version even although I pointed out that the ID passport etc had the full version which is what I quoted to them on the Certificate of Title. Eventually we faxed over evidence of the full names and the money was sent.

The Halifax are normally very good and I have to say this was an isolated case where they caused us some hassle. Their people did tell me that in most cases where it was an extra middle name one of the credit checks would show a middle name of initial consistent with the information I had given them and so usually there wasn't a problem.

Some lenders say that they want to know the date of completion but will send the money the day before if we ask them to do so. A lot just want to know the date of completion. For years I relied on the Abbey's comment that they normally sent the money the day before and on one occasion I faxed a request on a Monday for a completion on a Friday and they phoned Wednesday to say that money would be coming on Friday. "You mean Thursday don't you?" "No you didn't give us enough notice and we are busy so we can't send it until Friday."

We sat and waited and phoned every half hour all through Friday morning and eventually the money arrived at 3.10pm and there were three transactions above ours in the chain. They wouldn't guarantee when they would send the money - just that it would arrive by close of business, even though they must know that most contracts provide for a 2pm deadline! Never again!

So most solicitors ask for it the day before. I can remember one chain where there was a problem and I finally traced the problem down to bottom where the money had not arrived. I found out that the FTB was represented by a well respected local solicitor - I thought to myself : "Surely so and so would have asked for the money the day before..."

I got through to him and he explained that yes, he had naturally done that and then there was a load of nonsense about the lender wanting the buildings insurance checked even though it was being provided by the lender's parent company and he had been having nightmares getting them to talk to each other... See my other post mentioned above for the kind of nonsense.

Do you think it might be a good thing to agree before instructing a solicitor that in the event of something like this happening the solicitor agrees they are responsible for the late payment, and if they think they have a claim against for example the lender then it is their responsibility to persue that claim.

I can't see any solicitor agreeing to such a clause but atleast it will allow you to bring the subject up for discussion with your solicitor beforehand so you can see what their attitude to this is likely to be.

If a solicitor was asked to agree to that he would probably tell his client that if he wanted that then he would have to agree to 2-3 weeks between exchange and completion. Some solicitors even charge extra for completing in less than 3 weeks!

Generally if a client wants to agree a short completion date then we explain the risks and possible extra costs. The client can then seek to agree a longer date with the others in the chain. We completed a matter today with a mortgage from The Mortgage Works. We were told everyone wanted today to complete and we requested our money last Friday. Contracts were not exchanged until this Wednesday and the matter was duly completed today. The Mortgage Works say that if money has to be returned to them because completion has not taken place they make a £100 admin charge.

I spent some time on the telephone last week explaining that someone else in the chain might change their minds half way through this week if contracts had not been exchanged and I was still told to go ahead. The client led me to believe that her sellers were simply moving out and not buying anything. When I go through to her seller's solicitor to exchange he said that he would not do so until his client's mortgage money was coming. I had warned the client to check the chain thoroughly for possible problems and she had not thought of a possible onward purchase. In the end, as her seller had a nightmare scenario lender (can't name for obvious reasons), they did move out and broke the chain! As usually happens, we got there, but if clients want it risk free they have to allow much longer between exchange and completion so problems can be dealt with.

Richard_Webster

I can't name the nightmare scenario lenders, but in general terms those that deal in sub-prime lending tend to be pickier about apparently irrelevant details that the big mainstream ones...