Cash buyer, First time buyer- Seller will not give any completion date!

jackjassiek

I need advice from experts here please. Sorry for a very long story. My status: First time buyer and cash buyer, currently renting a flat.


In the beginning of February, our offer has been accepted. When I first made an offer, I understood from estate agent that the seller would look for another property to buy in the following week and would move out whenever all paperwork is ready and can exchange as soon as possible.


Two weeks later, the estate agent confirmed that the seller has decided to buy a new development property and would move out to rent as soon as we exchange.


Everything went well. Survey done, Asbestos test done, Searches done on the last week of March. I estimate that we can exchange the contract no later than mid of April and set the completion date around beginning of May.


So, we decided to do the second viewing before exchange of contract date on 1st of April.
--Then, all the truth revealed. I talked to the seller. The seller mentioned that the new development has not been built yet!!! She was trying to find a place to rent, but too expensive and she cannot afford the rental. She will not move out until the new development is ready. She stated that she got information from the new development company that it should be finished by August, depends on weather. She wants to exchange the contract, but the completion date will be on Notice. She insisted that she could not give the completion date!


--At the same time, our solicitor received an email from the seller’s solicitor as follows:
"We confirm our client has recently agreed to purchase an off plan property on which they have instructed us to act. Our client will tie the purchase in with the sale of this property to your client. As the property they are purchasing is off plan, contracts will be exchanged with completion on Notice. Once we are in receipt of the draft contract we will be able to indicate the estimated construction completion date and any long stop date for completion. The contract on this sale will of course also need to be amended to reflect the above. If you have any queries in this respect please do not hesitate to contact me."


--According to above statement, I understand that the time between exchange date to the completion date will be at least 4-5 months or more! (exchange end of April/May – completion date August or more after Notice!)


--My solution now: I am now trying to negotiate that I will exchange a contract as soon as possible only if the exact completion date can be set no later than 31st of August.


(With another problem that I cannot find a building insurance to cover this long gap period yet. I hope that I can find some insurance companies to do the non-standard term for me. Any advice about this insurance would be great and any advice for better solution for negotiation is much appreciate.)


-- My solicitor’s solution now: My solicitor has asked the seller’s solicitor again to get back with clearer view of timescales for exchange and completion date. It seems like the seller’s solicitor is waiting for the new development property’s answer. If the new development property do not confirm the exact date of completion (which is unlikely- I guess the new development will definitely insist on completion on Notice), what shall I do? According to the estate agent, the seller is not going to compromise and not likely to set the exact completion date.


We like the house. We got it with very good price. We did spend a lot of money on it already ,however the last step seems to be a very big trouble. How long I should wait for the new development to get back to the seller’s solicitor to confirm? Nothing guarantee that the new development will get back with exact date.


((I even try another option: offer her to exchange and complete asap and allow her to rent in this property alone until September. We will wait and move in on September. She denied too. ))


I am very new to this. Please kindly give any kind of advice.


Thank you very much in advance.

Lokolo

I am not sure what the issue is here. Why won't you wait?

The builders can't give an exact date, anything can happen - weather being most common, that could cause the build to be delayed.

You are a cash buyer so you won't have a mortgage expiring.

Lioness_Twinkletoes

Strikes me you have two choices:

A) Accept that you need to exchange with completion on notice - and bear in mind developments can and do suffer delays

b) Refuse and walk away.

Your suggestion that the sale is completed and the current owners rent it from you is a bad idea and fraught with problems.

I fail to see what else you can do.

hazyjo

If you do walk away and find somewhere else tomorrow, it's likely to take an average of 12 weeks, putting you somewhere in July (not to mention the costs of starting again). Would one month make that much difference if you really want this house?


As above, if you've not got a mortgage, there's no prob.


Jx

G_M

As above. Nothing surprising here.

Sellers change their minds frequently about 'going into rented'. That's life.

New Builds by definition have uncertain completion dates. Shortgage of materials; strike by the electricians; bad weather; funding issues; etc the list goes on. 100 possible reasos for completion to be delayed, so no builder will guarantee a completion date. Thus no seller who's buying a New Build can guarantee a Completion date.

Either wait, or walk.

jackjassiek

Thank you very much for your reply.

I want to wait, but just do not to wait indefinitely.
My current rental contract is expiring. (The landlord will not allow to continue the contract on a short term basis) I will have to move out soon and find another place to rent.


I am not sure if this kind of new development is normally delay. If yes, it may be delay for years.
If you have heard about anyone's experiences about this, please kindly suggest.

Rain_Shadow

jackjassiek wrote: »

Thank you very much for your reply.

I want to wait, but just do not to wait indefinitely.
My current rental contract is expiring. (The landlord will not allow to continue the contract on a short term basis) I will have to move out soon and find another place to rent.


I am not sure if this kind of new development is normally delay. If yes, it may be delay for years.
If you have heard about anyone's experiences about this, please kindly suggest.

He can't make you leave in the short term. Tell him you are going to allow the rental to move to a rolling contract. He will need to evict you. Realistically he can't do this before 31 August. Did he tell you he didn't want that or did the letting agent tell you because they want to charge you a fat fee for signing another 6 month AST?

saajan_12

jackjassiek wrote: »

I want to wait, but just do not to wait indefinitely.
My current rental contract is expiring. (The landlord will not allow to continue the contract on a short term basis)

Not quite indefinitely but you have easily 4 months after your contract expires. It isn't really up to the LL to agree/disagree to a short term letting. If there is no provision in your contract for a CPT, you automatically roll into a statutory periodic tenancy (i.e. a rolling monthly contract which you can terminate with a full tenancy period notice.

1. The LL (or their agent) may prefer a fixed term contract for the security or renewal fees, but very often will not actually evict a rent paying tenant only to get a void sooner rather than later.

2. If they do want to evict, they must correctly serve a valid S21 notice giving atleast 2 months notice and expiring on or after the end of your current fixed term. They would then need to apply to court who set a date, and then apply for bailiffs after that date. That is likely to run a few months after the expiry of the fixed term, plus 2 months if the S21 hasn't been served correctly / yet.

GDB2222

I don't see any problem with the insurance. For a protracted completion like this, the insurance risk can be kept by the seller, who simply keeps her own policy going.

jackjassiek

GDB2222 wrote: »

I don't see any problem with the insurance. For a protracted completion like this, the insurance risk can be kept by the seller, who simply keeps her own policy going.

I normally understand that the buyer will have to buy a building insurance once we exchange the contract. (to cover between exchange and completion date)


For my case, if we exchange by the end of this month April, with completion date ON notice.
Does it mean that I will not need insurance for this long period? The seller will be the one who continues her own policy?
What if the house collapse down during this time, I will have a duty to buy this without insurance?


Sorry for asking, but I am very new to this.
Thank you so much for your help in advance.

GDB2222

jackjassiek wrote: »

I normally understand that the buyer will have to buy a building insurance once we exchange the contract. (to cover between exchange and completion date)


For my case, if we exchange by the end of this month April, with completion date ON notice.
Does it mean that I will not need insurance for this long period? The seller will be the one who continues her own policy?
What if the house collapse down during this time, I will have a duty to buy this without insurance?


Sorry for asking, but I am very new to this.
Thank you so much for your help in advance.

There are standard conditions of sale that are normally incorporated into the contract. However, any of the terms of the contract are negotiable, and an adjustment can be made to the contract terms. Speak to your solicitor, as I'm sure this issue with the insurance can easily be sorted out.