Vendor won’t complete on fixed completion date

FirstTime_Buyer

pinkteapot said:

You need proper advice from your solicitor, OP. The process should be that if completion does not take place on the completion date then your solicitor issues a Notice to Complete which gives the vendor a certain number of days (can't remember how many) to complete. Your solicitor can tell you what the penalty is for the vendor if they don't complete. If a buyer fails to complete they lose their deposit. If a vendor fails to complete it's more complex. 

Your vendor shouldn't have exchanged on their sale with fixed completion without their new-build being finished. Or, they should have done so with a plan for where they'd live temporarily if the new-build was delayed. New-builds are often delayed even when there's not a pandemic.

Thank you for that advice, it makes sense to the situation.

I’ve now been told by my solicitor that although a notice to complete can be served they think the court may not favour the application given the current situation in the UK. 

Unsure where that leaves me since I potentially have no mortgage. I’ll find out next week and post an update to help anyone else in this situation.

GDB2222

There’s remarkably little compensation due to a buyer if the vendor does not complete. If a buyer does not complete within two weeks of the completion notice being served, he loses his deposit as a minimum. In this case, if the seller does not complete, he is liable for the buyer’s costs, which may not amount to much, especially if house prices fall during the time it takes the case to get to court. 

What the OP should consider is whether he wants to complete. This is an opportunity to get out of a contract that was negotiated before COVID, at the prices prevailing then. Who knows what prices will be in a few months time? Unlikely to be higher.

nyermen

m0bov said:

Yo can’t force the sale, but you can sue for losses such as temp accommodation, storage, the difference in resale value should it be aborted. Your vendor stands to loose a fortune.

Hopefully not an issue, but worth noting - if they have a fortune.  If they're mortgaged up / FTB / etc, they may not have much.
In any case OP, don't agree to anything without advice (what is your conveyancer saying etc) and especially not without being 100% sure you're okay with the new date (eg. offer is extended) otherwise it'd be the other way round.
As an extra point - presumably they exchanged at the same time with the new build company committed to the date.  So is liability then up the chain to them?

Freecall

It sometimes helps to look at these things from the other side.

Imagine the seller coming on here and saying something along the lines of "I'm due to complete on my sale next week and my new-build isn't ready because of COVID-19, can I put off completion?"

The advice would without question be to grab the opportunity to sell at the higher price whatever you do.  Make sure you comply with every single comma of your contract, it could be decades before you can sell at these prices again.

Move into a hotel, bedsit, short-let or anything else but grab the money while you can.

Thrugelmir

FirstTime_Buyer said:

pinkteapot said:

You need proper advice from your solicitor, OP. The process should be that if completion does not take place on the completion date then your solicitor issues a Notice to Complete which gives the vendor a certain number of days (can't remember how many) to complete. Your solicitor can tell you what the penalty is for the vendor if they don't complete. If a buyer fails to complete they lose their deposit. If a vendor fails to complete it's more complex. 

Your vendor shouldn't have exchanged on their sale with fixed completion without their new-build being finished. Or, they should have done so with a plan for where they'd live temporarily if the new-build was delayed. New-builds are often delayed even when there's not a pandemic.

Thank you for that advice, it makes sense to the situation.

I’ve now been told by my solicitor that although a notice to complete can be served they think the court may not favour the application given the current situation in the UK. 

Unsure where that leaves me since I potentially have no mortgage. I’ll find out next week and post an update to help anyone else in this situation.

Lenders are highly unlikely to leave people such as yourselves high and dry. If not voluntarily then there would be an imposition from above. 

Flugelhorn

GDB2222 said:

There’s remarkably little compensation due to a buyer if the vendor does not complete. If a buyer does not complete within two weeks of the completion notice being served, he loses his deposit as a minimum. In this case, if the seller does not complete, he is liable for the buyer’s costs, which may not amount to much, especially if house prices fall during the time it takes the case to get to court. 

We exchanged early March to complete end of April (not great I know, but that was what the vendor wanted) - now vendor wants 2 month extension as can't move / can't find rented - wants us to agree without any financial loss to him. Solicitor has told us we don't have to agree to amendment but not really sure what the options are 

GDB2222

Flugelhorn said:

GDB2222 said:

There’s remarkably little compensation due to a buyer if the vendor does not complete. If a buyer does not complete within two weeks of the completion notice being served, he loses his deposit as a minimum. In this case, if the seller does not complete, he is liable for the buyer’s costs, which may not amount to much, especially if house prices fall during the time it takes the case to get to court. 

We exchanged early March to complete end of April (not great I know, but that was what the vendor wanted) - now vendor wants 2 month extension as can't move / can't find rented - wants us to agree without any financial loss to him. Solicitor has told us we don't have to agree to amendment but not really sure what the options are 

Do you want to go ahead, or is this a great opportunity to back out of the contract? 

You don’t have to say anything to the vendor  except “happy to agree to rescind contract, but not prepared to agree an extension”. This would be on the basis both sides pay their own costs, say, and you’ll get the deposit back. Personally, given the uncertainty ahead, I would regard that as a great outcome.

GDB2222

Thrugelmir said:

FirstTime_Buyer said:

pinkteapot said:

You need proper advice from your solicitor, OP. The process should be that if completion does not take place on the completion date then your solicitor issues a Notice to Complete which gives the vendor a certain number of days (can't remember how many) to complete. Your solicitor can tell you what the penalty is for the vendor if they don't complete. If a buyer fails to complete they lose their deposit. If a vendor fails to complete it's more complex. 

Your vendor shouldn't have exchanged on their sale with fixed completion without their new-build being finished. Or, they should have done so with a plan for where they'd live temporarily if the new-build was delayed. New-builds are often delayed even when there's not a pandemic.

Thank you for that advice, it makes sense to the situation.

I’ve now been told by my solicitor that although a notice to complete can be served they think the court may not favour the application given the current situation in the UK. 

Unsure where that leaves me since I potentially have no mortgage. I’ll find out next week and post an update to help anyone else in this situation.

Lenders are highly unlikely to leave people such as yourselves high and dry. If not voluntarily then there would be an imposition from above. 

There’s slightly more information here. https://www.moneysavingexpert.com/news/2020/03/homemovers-impacted-by-coronavirus-to-be-offered-mortgage-extens/

Still very low on details, and if your own lender is dithering it’s not going to help. I imagine some lenders will be looking for ways to avoid lending as far as possible right now. 

Flugelhorn

GDB2222 said:

Flugelhorn said:

GDB2222 said:

There’s remarkably little compensation due to a buyer if the vendor does not complete. If a buyer does not complete within two weeks of the completion notice being served, he loses his deposit as a minimum. In this case, if the seller does not complete, he is liable for the buyer’s costs, which may not amount to much, especially if house prices fall during the time it takes the case to get to court. 

We exchanged early March to complete end of April (not great I know, but that was what the vendor wanted) - now vendor wants 2 month extension as can't move / can't find rented - wants us to agree without any financial loss to him. Solicitor has told us we don't have to agree to amendment but not really sure what the options are 

Do you want to go ahead, or is this a great opportunity to back out of the contract? 

You don’t have to say anything to the vendor  except “happy to agree to rescind contract, but not prepared to agree an extension”. This would be on the basis both sides pay their own costs, say, and you’ll get the deposit back. Personally, given the uncertainty ahead, I would regard that as a great outcome.

Actually quite keen to go ahead just because it has taken forever to find the place - suspect vendor needs to sell for financial reasons. pondering on reluctantly agreeing but looking at price reduction - presumably if they can change the date in a contract they can change the price??

Slithery

Flugelhorn said:
presumably if they can change the date in a contract they can change the price??

A date change is just a simple edit of the contract, whereas a price change means that your mortgage offer may need to be reconsidered...
Two completely different procedures.