Non-completion

arkwright01

Hi,

I exchanged contracts on the 25/09/07 with a completion date set for yesterday (23/10/07).

The buyer has failed to complete because of problems with the mortgage offer. Everything is still going ahead but is delayed.

Question is, what happens now?

Curv

You wait for the problems to be resolved and then agree another date.

Am surprised sols allowed exchange is the offer isn't sound.

merlinthehappypig

You really need to be asking your solicitor about this, not a forum. My understanding always was that the buyer would be liable for any additional costs that you incur as a result of this, but you need to get proper advice. Ultimately I guess the buyer would forfeit the deposit.

There have been a number of posts on here and in the media about mortgage offers being withdrawn at the last minute before completion, despite being o.k. at the point of exchange, as lenders have tightened their criteria post Northern Rock.

silvercar

Why did the buyer's solicitor allow him to exchange without ensuring the mortgage offer was watertight?

Your solicitor informs the buyers solicitor that they are in breach (a formality really). The buyer needs to sort out within a certain length of time (about 10 days I think). Provided things get sorted, completion happens and your buyers are liable for any extra costs you have incurred.

If the buyers fail to sort the problem they forfeit their 10% deposit, if they have provided a lower deposit they are liable for the remaining amount upto the 10%.

arkwright01

I've managed to have a quick word with my solicitor (amazing at this time!) and it's as silvercar said.

Bit of a nuisance as we're not buying something at the moment (in temporary accommodation) but we can live with it!

goldbyron

Yes - you need to give it 10 days and then the buyer will forfeit the deposit. However you can prob re-arrange a completion date and at least you do not have to forfeit any purchase or deposit your end. Hopefully the sale can still go ahead.

merlinthehappypig

Just noticed that you are in Scotland. If the house you are selling is in Scotland, there won't normally be a deposit, you have to sue for breach of contract. Whilst it's good news that you aren't buying yet so won't incur any costs yourselves, simply losing the interest on the money from now until you complete will cost you. Most Scottish contracts will have a clause saying that the buyer will have to pay you interest on the delayed money at a fixed rate in the event of non-completion on the date agreed.

theGrinch

there is a certain procedure and notice that your solicitor will have to serve. effectively a new completion date is set. please allow for common sense where possible.

ps are you in a chain?

arkwright01

Yes, I've just relocated to Scotland but the property is in England.

I'm aware of the law differences, that's why I'm in temp. accommodation at the moment. I'm not going to offer on a property up here until I have the money from my sale in England in the bank.

There is no chain, it's quite simple really, but as I understand it, I just have to wait the 10 days. My solicitor is confident that it will complete within this period.

theGrinch

I have first hand experience of clients missing a completion date and as you said usually 10 working days is given and it is solved.

merlinthehappypig

arkwright01 wrote: »

Yes, I've just relocated to Scotland but the property is in England.

I'm aware of the law differences, that's why I'm in temp. accommodation at the moment. I'm not going to offer on a property up here until I have the money from my sale in England in the bank.

There is no chain, it's quite simple really, but as I understand it, I just have to wait the 10 days. My solicitor is confident that it will complete within this period.

That clarifies things, thanks. Hopefully there will be no further problems. Good move to sell before offering on a house in Scotland. That's what we did and it made it much easier. It would have made things much easier when we sold as well, if most viewers had taken the same attitude. We wasted so much time showing people around who hadn't sold in England or who hadn't even got their house up for sale:mad: