Breach of Contract

GDB2222

tattooosteve wrote: »

As for the building society, I witheld the name for the same reason. It is well known, however I'm told doesn't have an excellent reputation.

Regarding buyer, I do have contact details and later this week may make contact. I'm sure you'll appreciate, with my wife in tears and our home in disarray I decided against seeing him this weekend. ��
He has said that he doesn't know why and will be going to find out this week so there is a glimmer of hope. I am hoping it's a banking / computer error of some sort. It seems awfully late in the day to be doing checks.

Probably today, your vendors will serve a notice to complete on you, giving you two weeks to complete the purchase or forfeit your deposit and be liable for further costs. Your solicitor will do the same to your buyer.

Then, one of two things will happen:-
During the fortnight your buyers' mortgage will get sorted out, or it won't. There's nothing you can do to influence that.

If the mortgage does come through, then complete the chain and worry about suing for costs later. If it doesn't come through, you may be liable for significant costs of the other parties in the chain. Or they may just keep the deposit and start again with the selling process. The people at the top of the chain will come out of this smelling of Roses, as they get to keep 10% of the house value as the deposit, and their loss is fairly modest. Everybody else in the chain will lose out.

Good luck, and I hope it all works out okay.

GDB2222

davidmcn wrote: »

Irrespective of whether the OP's solicitor has dealt with this scenario before, they surely ought to be able to answer their basic questions about the process. Otherwise what's the point of engaging them to negotiate and advise on the contract?!

Any conveyancing solicitor will be familiar with the process. There's no need to swap horses at this stage.

eddddy

tattooosteve wrote: »

There was four people in the chain.

DaftyDuck wrote: »

Two points. Firstly, it's really only worth chasing the buyer if he somehow has cash, so another mortgage to complete, or some ready cash for costs. If he is stone broke, you can waste ages chasing and stressing, but will gain nothing.

The OP is going to be liable for the consequential losses of two parties up the chain (as well as his own).

At best that will be a few thousand, at worst it could be tens of thousands.

I suspect that OP and his litigation solicitor will want to explore every route to establishing liability, and recovering their losses.

moneyistooshorttomention

GDB2222 wrote: »

You may even be liable for estate agent fees on the failed purchase!

I wouldnt have thought that would be the case.

I think the clause in EA agreement is words to effect of them having produced a "ready, willing and able" buyer or somesuch very similar wording. Well the buyer wasnt "able" were they?

In fact if I were in OP's position then I'd be wondering just how carefully my EA had checked my buyers position. I know my own EA (when I sold last house) demanded proof of income/where deposit was going to come from/etc - to prove my buyer was indeed "able" and not just a dreamer.

NB; and, if you do have to start from scratch with a new buyer, errrrrm....I'd think twice about only having such a short period of time in between Exchange and Completion (3 days!!!!!!). A longer period of time allows glitches to be ironed out and this may just be a glitch. The standard 4 weeks gap allows for a lot of last minute running around to sort things out if need be.

GDB2222

moneyistooshorttomention wrote: »

I wouldnt have thought that would be the case.

I think the clause in EA agreement is words to effect of them having produced a "ready, willing and able" buyer or somesuch very similar wording. Well the buyer wasnt "able" were they?

In fact if I were in OP's position then I'd be wondering just how carefully my EA had checked my buyers position. I know my own EA (when I sold last house) demanded proof of income/where deposit was going to come from/etc - to prove my buyer was indeed "able" and not just a dreamer.

I just raised this as a remote possibility. Some estate agency fees become payable on exchange of contracts. It depends on the precise terms of the contract with the EA. There's not much the OP can do right now, but one thing he can do is check the terms of the EA contract. The fee may well only be payable on successful completion of the sale.

In any case, a good agent would not seek to cash in in these circumstances.

Hopefully, this was all a mistake at the buyer's lender, and it will get sorted out.

"I know my own EA (when I sold last house) demanded proof of income/where deposit was going to come from/etc." Perhaps I am cynical, but this was probably so your EA could introduce your buyer to an IFA and get a kick-back.

davidmcn

GDB2222 wrote: »

Any conveyancing solicitor will be familiar with the process. There's no need to swap horses at this stage.

I agree that's not a great idea, but I would at least express some dismay that the fee-earner dealing with my case appears to be out of their depth as soon as it goes pear-shaped.

"It hasn't happened to me before" is hardly an excuse - I spend half my time negotiating clauses which deal with disaster scenarios I hope never occur, but I would at least be able to understand how to implement them if need be.

tattooosteve

eddddy wrote: »

The OP is going to be liable for the consequential losses of two parties up the chain (as well as his own).

At best that will be a few thousand, at worst it could be tens of thousands.

I suspect that OP and his litigation solicitor will want to explore every route to establishing liability, and recovering their losses.

Thanks for reply. Surely my buyer must then be responsible for the consequential losses of everyone in the chain including me , is that correct do you know ?
I

eddddy

tattooosteve wrote: »

Thanks for reply. Surely my buyer must then be responsible for the consequential losses of everyone in the chain including me , is that correct do you know ?
I

Yes - that's correct. Your buyer will be liable for all the losses.


The really scary thing is if the losses are big (tens of thousands) and your buyer can't pay them, and goes bankrupt.

Then you might end up footing the bill.

Miss_Samantha

He would only be responsible for your loss.

However, your loss may include what you have to pay to compensate for the loss of the person up the chain (the person you are buying from), and so on.

Note that this is not in addition to his deposit (if he does lose it): For example if you lose 5k but got his 10k deposit then the deposit covers your loss.

eddddy

GDB2222 wrote: »

Some estate agency fees become payable on exchange of contracts.

EA fees always become due if there is exchange of contracts - unless the fee has already been paid in advance.


(The "ready, willing and able clause" mentioned earlier is a mechanism for claiming fees even if there is no exchange of contracts - which isn't relevant here.)