Completion delay - liability for costs

bms1972

I wonder if anyone could give a legal opinion on who is liable for costs in these circumstances.

Buyer A purchases house from Buyer B, who is purchasing from Buyer C.

Exchange of contracts takes place two weeks before completion.

Delays ensue on completion day, due to A's funds not reaching B's solicitors account by the deadline (15.30). Extra costs are incurred (e.g. removals/storage/interest) by the chain.

Is A responsible for B & C's costs, or only B's? I've had contrasting opinions on this and I wonder if anyone has real world experience of this sort of situation?

Doozergirl

B is responsible for C's, A is responsible for B's.

As B's responsibility to C is ultimately result of A's problem, A is ultimately responsible for everyone's costs, but C still has to claim theirs from B as the only contract C has is with B.

Slithery

A is responsible for B's costs.
B is responsible for C's costs but can claim these from A as part of their costs.

AnotherJoe

So C charges B, and B charges A, including his direct costs and also indirect (eg C's). But B will need to pay C and then recover C's costs from A.

IANAL but that what I've read here in cases where this has happened. So A doesn't have direct liability to C but it will come home to roost all the same.

martinsurrey

AnotherJoe wrote: »

So C charges B, and B charges A, including his direct costs and also indirect (eg C's). But B will need to pay C and then recover C's costs from A.

IANAL but that what I've read here in cases where this has happened. So A doesn't have direct liability to C but it will come home to roost all the same.

Until A cant pay for all of the chain costs, and B ends up footing the bill (as say, A goes bankrupt).

bms1972

Thanks for the answers everyone, genuinely much appreciated. I'm glad that there is a consensus view on the situation and it matches my layman's understanding of things.

bms1972

I've been pursuing this and today received a letter from our buyer's solicitors saying that they are not responsible for the loss as we should have mitigated against the loss by completing under license. We were actually willing to do this, but further up the chain were not.

As far as I am aware, there is not contractual right to complete under license and the only contractual commitment is on the part of the buyer to have the funds in the seller's solicitor's account by 2pm. Failure to do this is the reason that the delay occurred, and is the only contractual reason for the breakdown.

Grateful for any advice please :-)

davidmcn

Do you not have a solicitor providing any advice?

mrschaucer

Presumably your buyer's funds were not in your (sol's) account in time, so your contract with them could not complete. Consequently this lack of funds meant you could not complete on your onward purchase. Yes, in theory you could have given your buyers a licence to occupy your house until they sorted themselves out but why would this be a duty you "have" to do? It would mean your vendor also "having to" let you into their house under licence and so on up the chain. As you say, it only takes one person to refuse and SOMEONE in the chain gets to sleep on a friend's couch/run up hotel bills etc until the person at the bottom gets his act together. This surely can't be a legal requirement - just doesn't make sense - these new costs would only get passed down the chain again to the bottom? Please come back and tell us what your solicitor says.

G_M

DIY conveyancing is fine if you know what you're doing.

When things get more complicated and you find you don't know what you're doing, time to get legal advice.

bms1972

davidmcn wrote: »

Do you not have a solicitor providing any advice?

Yes. Solicitor advising, but not instructed - as running up further costs make little sense unless there is no alternative.