Stuck between exchange and completion on home purchase. Your opinions on my situation please.

MrLogical

Hi All,

I hope you are all well and keeping safe.

I have been in lock down working from home for over a month now. I am looking for some reassurance about something that is really worrying me.

Just before the corona-virus really took off in Europe, I exchanged (put down 10%) on a new build which was at the time a few of months away from being complete.

Most of the work now is internal decoration, connecting services, etc.

We were due to complete a couple of months from now but the building site closed down when lock down started.

Whilst I believe the chances of me losing my job right now are fairly slim, I am still very concerned that I could (especially if this goes on longer than most people are predicting), resulting in my mortgage not paying out and my purchase falling through. This would mean I lose my 10% and could potentially face a lawsuit if the cost of the property has also fallen. If this was all to happen, would I be in a position to fight it given there is no way this would have happened had the corona-virus not turned up in the UK?

Thanks in advance!

Semple

I don't think anyone will be able to answer your questions, as they're all "what if's" scenarios. 

The only question that needs answering is at what point is the mortgage provider legally bound to provide the funds, now that you've already exchanged contracts. This is one of the risks of having such a large gap between exchange and completion. 

MrLogical

Semple said:

I don't think anyone will be able to answer your questions, as they're all "what if's" scenarios. 

The only question that needs answering is at what point is the mortgage provider legally bound to provide the funds, now that you've already exchanged contracts. This is one of the risks of having such a large gap between exchange and completion. 

Thank you for your reply. I believe they could change their minds if my situation were to change dramatically however, we are in uncharted territory and I imagine if this were to happen to me, it would also happen to many many other people so I'm wondering if they would do things differently...

mobilejo

I agree - a lot of 'ifs' - but I can understand why you're having these thoughts!

Legally, if you fail to complete, then all of the usual consequences do still apply; loss of deposit/damages - there is currently no wiggle room in the law for coronavirus. Will the government rush through some emergency legislation to change things? I have no idea. There are a lot of contracts for all sorts of things going south due this and someone somewhere will always lose money, all the government could do is shift the loss from one side to the other... I'm not sure if that is something they want to get involved in.

MrLogical

Thanks mobilejo. What a nightmare this would be. The slightest chance of it happening is enough to make me lose sleep! Here's hoping we get through this safe and sound.