Notice to Complete

johnwilly

We agreed the sale of our house back in the spring. Exchanging on 2nd June with completion planned for 9th. Because our new house was not expected to be ready until early Aug we moved in with our daughter. On 2 June we were told that buyer No1 in the chain of 3 could not now complete until 10th Aug. As we had exchanged and the others involved were happy, we accepted 10th Aug for completion. At 5pm on the 9th we were told of a problem with No1's funds, which, although above board, were an inheritance from abroad and had to be verified by HMRC. The 20th Sep has been agreed for completion but our builder is loosing patience and we are in danger of loosing our house which because my wife is disabled, we have paid for alterations amounting to £5k since we exchanged. In a bid to ensure no more delays I intend that my solicitor issues a Notice to Complete, unfortunately it seems this is served on our buyers who are the innocent party, do they then do the same to their buyers and so on? I am disinclined to put pressure on them but is this the only way forward?

anselld

Has the whole chain exchanged? If so, then yes, notice to complete is the only way to put pressure on and it gets passed down the chain to the delaying party.

eddddy

johnwilly wrote: »

The 20th Sep has been agreed for completion but our builder is loosing patience and we are in danger of loosing our house which because my wife is disabled, we have paid for alterations amounting to £5k since we exchanged.

If you lose the house (because you're unable to complete), you can sue your buyer for damages.

The damages would include any extra cost you have to pay for a similar house with similar alterations.

(and if you sue your buyer, your buyer will then sue their buyer.)

AFF8879

Surely your builder has to serve you with a notice to complete before you can "lose the house?" Therefore until that happens you're not really in any danger of losing anything.

If 20th September has been agreed by everyone (including you), it would be a little odd to then turn around and serve a notice. Personally, I would just assure my builder that if for whatever reason 20th got pushed back again I would then be serving the notice. I would also make sure my buyers knew that and request their solicitors to pass the message down the chain.

johnwilly

Thank you all for your advice. Perhaps I should have made clear we have not exchanged on the 'new build' so we are in a more precarious position. Arguably we were foolhardy in doing the alterations, but they had to be done before we moved in and at 5pm on 9th Aug we were within hours of exchange/completion/move. My worry is that, come the 20th, No1 may again hesitate(as he has twice before) and serving the Notice then would mean a further delay of 10 working days and I'm not sure my builder would be prepared to wait, especially as work on the site is complete and the entire workforce has moved out. Not having moved in 30+ years, it just feels wrong to have to serve a Notice on my immediate buyers, such is life I suppose.

AnotherJoe

There are two separate things going on here.

There's completion on your old house (that presumably has been vacant for 3 months? Do the insurance company know?)
There's exchange on your new house.
I dont believe (IANAL) that they are related, which is unfortunate.

Seems to me by splitting the chain like this you've probably put yourself in a tricky legal situation.
I dont know what damages you'd be able to get related to purchasing the new house because it was not part of the chain at the time so there is most likely no good reason for your buyer to be liable for costs on what is legally an unrelated purchase. I dont know why you didn't exchange on your new build at the time but i think that may have turned out to be a very bad idea.

So, I would issue the notice now because hopefully that will show your builder you are serious, and hope that that satisfies them for the next two weeks, because were you to exchange now and completion not occur, you'd be on the hook for failure to complete, and what could you reasonably expect as damages? Possibly just the delay in getting your money, because there was no connected purchase for you at the time you exchanged.

On the upside, what realistically can your builder do, lets imagine he says to you today "OK the deal is off I'm readvertising" he's got a house with a specific set of changes unlikely to be popular to many, and hopefully if the completion does go through on Sep 20 you can step back in and buy then anyway as a cash buyer.

I would certainly not exchange in your position now because if this all falls through the legalities could take many months. I would call your buyer, tell them why you are issuing the notice and that you expect them to pass the hurt down the chain.

AdrianC

johnwilly wrote: »

In a bid to ensure no more delays I intend that my solicitor issues a Notice to Complete, unfortunately it seems this is served on our buyers who are the innocent party, do they then do the same to their buyers and so on? I am disinclined to put pressure on them but is this the only way forward?

You can't issue a Notice to Complete to anybody BUT your buyer, because they are the only person who is completing a transaction with you. If they need to complete on their sale in order to complete on purchasing your property, then they can issue a NtC to their buyer.

eddddy

As AnotherJoe says, it's strange that you didn't exchange contracts on your sale and purchase at the same time. Especially as I guess you want them both to complete on the same day.

What did your solicitor say about that?

To be honest, you could still exchange contracts now for your purchase - on the basis that you have already exchanged contracts for your sale. You could still sue your buyer if they fail to complete as promised.

But I would discuss that with a good solicitor first.



Edit to add:

In fact, perhaps you should exchange contracts with the builder before you issue the notice to complete.

Otherwise this could happen,
- You issue the Notice to Complete, your buyer completes a few days later
- But in the meantime the builder exchanges contracts with somebody else

You will be left homeless, with just a few days to move out.

AnotherJoe

eddddy wrote: »

As AnotherJoe says, it's strange that you didn't exchange contracts on your sale and purchase at the same time. Especially as I guess you want them both to complete on the same day.

What did your solicitor say about that?

To be honest, you could still exchange contracts now for your purchase - on the basis that you have already exchanged contracts for your sale. You could still sue your buyer if they fail to complete as promised.

But I would discuss that with a good solicitor first.



Edit to add:

In fact, perhaps you should exchange contracts with the builder before you issue the notice to complete.

Otherwise this could happen,
- You issue the Notice to Complete, your buyer completes a few days later
- But in the meantime the builder exchanges contracts with somebody else

You will be left homeless, with just a few days to move out.

My thoughts responding to the red highlighted addition.

1. It seems incredibly unlikely the builder will exchnage with someone else, they dont have any buyers lined up (AFAIWK) and a new person would need to get to exchange from nothing in two weeks, plus the house has had a lot of specific changes made for a disability which would probably not be popular with the 'average' buyer so a very limited pool of potential purchasers that might need the changes backed out..

2. The OP has already moved out anyway.

3. By exchanging now the OP puts themselves in a tricky legal situation (as i said IANAL) because they are adding an additional purchase that was not part of the "exchange chain" at the time. At the time of exchange they were potentially at risk for £5k of house alterations. Now they are looking to add a whole house on. Is their current buyer legally liable for the latter? Consult your solicitor, but seems unnecessary if there are only two weeks to go and builder will be satisfied by NTC and maybe a solicitor isn't the right person to even advise about what exchanging now will mean, and a barrister specialising in this will need to be consulted.

4. Thats a heck of a lot of expense and risk when there's in reality no way the builder can do anything in the next two weeks except readvertise.

silvercar

You lose nothing by serving notice to complete ASAP. Just do it. This is a business transaction.

If someone mutters that 20th September has agreed, you reply that serving notice is the most effective way to ensure that happens.

All serving notice does is say to your buyers:
a) you said you would complete.
b) you haven't done so yet.
c) please do so.

(maybe without the 'please').