Exchange and complete on the same day

momo1103

Hello,
(Received an email from my solicitors this evening, I will phone them tomorrow with my queries but wanted to get your thoughts first)
Just been advised by my solicitors that the sellers cannot complete until the 26th of June.
Due to the current pandemic, my solicitors are advising us that we simultaneously exchange and complete on the same day to "avoid risk of completion being delayed due to a coronavirus event" (I take this to mean government restrictions prevent house moves again (if there is a second peak?)).

My solicitors say that if we don't want to do this then they will need to agree additional clauses to the contract (a 'rider') to protect us from any risks to the transaction. If the sellers lawyers don't agree to the rider then we will have to sign a disclaimer.

My wife and I are first time buyers, currently living with my parents and obviously we would like to move out as soon as is possible but we are in no real rush to move, we don't have restrictions on when to book removal companies, or need to be out by a certain date etc. We would be agreeable to complete on the 26th of June.

I feel there is more chance of something going wrong if we exchange and complete on the same day especially as we are part of a chain (eg paperwork not being signed on time, last minute mortgage issues etc - I think we would be ok but there's still everyone else in the chain). I also need to check my mortgage offer paperwork (would've thought solicitors would've already checked this before asking anyway) to see if my lender has stated a minimum time between exchange and completion which could make this whole thing moot.

My question is apart from timescale what are the risks of completion being delayed and risks to the transaction? I thought after exchange neither party can walk away without consequences (we are in England). I think we would be more comfortable exchanging a couple of weeks before 26th June so we know we have the house and then completing when possible. I guess it depends on everyone else in the chain - am I correct in understanding that everyone has to exchange on the same day?

Summary - Should we take solicitors advice to exchange and complete on the same day? Or instead agree to a rider or sign a disclaimer?

davidmcn

If you're FTBs and in no rush to move, what's the problem with doing it simultaneously? It's more of an issue for those who e.g. are selling and buying simultaneously and want to sort out removal vans, leave from work etc for a definite day.

The fact that "after exchange neither party can walk away without consequences" is why simultaneous exchange/completion is being recommended - you don't want to exchange and then find out you'll be in default because e.g. something's gone wrong with your funding.

momo1103

Ah ok thanks davidmcn.
I suppose I thought if we can exchange now (or in a week or two) then why wait until completion day to exchange and complete.

bucksbloke

Never would I ever do this. 

momo1103

bucksbloke said:

Never would I ever do this. 

Could you expand please?

RelievedSheff

We have exchanged and completed on the same day on both of our property transactions so far. It has not caused us a problem in either case and we would certainly do it again if the need arose. Just a foot note we did also move into both houses on the same day as completion.

Missy79

I suppose I thought if we can exchange now (or in a week or two) then why wait until completion day to exchange and complete.

Because there is currently a higher likelihood than usual of something going wrong between exchange (where you become contractually liable for completing as agreed) and completion. Exchanging and completing on the same day means that you don't carry liability for issues arising. The shorter the time between exchange and completion the less likely you are to have issues outside your control while also having liability. At the bottom of the chain you don't necessarily have a problem personally as you don't have a buyer who could claim costs if there were problems, but this will not be the case further up the chain where significant costs could be involved.

It may increase the likelihood of problems on the day as more needs to be done without the "breathing space" of the usual gap, but, you won't be carrying any liability for these issues as you won't have exchanged. If you're not having to move on the day of completion these problems would be more of an annoyance for you than anything else as you'd just do it on another day when the issues are resolved.

hazyjo

bucksbloke said:

Never would I ever do this. 

Do what? Exchange and complete on the same day? Nor would I usually, but this isn't 'usual' times, therefore, the current advice is to do both on the same day. It's definitely what I would do right now.

saajan_12

momo1103 said:

Hello,
(Received an email from my solicitors this evening, I will phone them tomorrow with my queries but wanted to get your thoughts first)
Just been advised by my solicitors that the sellers cannot complete until the 26th of June.
Due to the current pandemic, my solicitors are advising us that we simultaneously exchange and complete on the same day to "avoid risk of completion being delayed due to a coronavirus event" (I take this to mean government restrictions prevent house moves again (if there is a second peak?)). - could be anything, eg in chain loses their job and hence mortgage offer withdrawn, someone becomes severly ill and needs to 100% isolate.. 
My solicitors say that if we don't want to do this then they will need to agree additional clauses to the contract (a 'rider') to protect us from any risks to the transaction. If the sellers lawyers don't agree to the rider then we will have to sign a disclaimer. - ask them what clauses? Legally, the issue should be clear cut if someone fails to complete so I'm not sure how additional clauses would help. The difficulty is getting the money from people who don't have it, and the time delay in serving notices etc. 

My wife and I are first time buyers, currently living with my parents and obviously we would like to move out as soon as is possible but we are in no real rush to move, we don't have restrictions on when to book removal companies, or need to be out by a certain date etc. We would be agreeable to complete on the 26th of June.- okay great, so same day should be fine for you - just wait AFTER you have completed and then get removals etc in. There'll be a bit of an overlap, but if your current place doesn't have strict notice periods etc, should be fine. 

I feel there is more chance of something going wrong if we exchange and complete on the same day especially as we are part of a chain (eg paperwork not being signed on time, last minute mortgage issues etc - I think we would be ok but there's still everyone else in the chain). - There's actually less risk, as if something 'goes wrong' before exchange/completion then no one owes anyone anything so it can just be pushed back or everyone can walk away.  The longer the gap, the greater the chance something goes wrong between exchange and completion, and hence people start claiming losses etc from eachother.

I also need to check my mortgage offer paperwork (would've thought solicitors would've already checked this before asking anyway) to see if my lender has stated a minimum time between exchange and completion which could make this whole thing moot. - your lender wouldn't care about exchange as they aren't tied into anything becuase you exchange with your seller. They may have a minimum time when they need to be notified so they can transfer the funds etc, but your solicitor can do that a week or so before the expected completion date, and if it falls through then they just return the money. 
 
My question is apart from timescale what are the risks of completion being delayed and risks to the transaction? I thought after exchange neither party can walk away without consequences (we are in England). I think we would be more comfortable exchanging a couple of weeks before 26th June so we know we have the house and then completing when possible. I guess it depends on everyone else in the chain - am I correct in understanding that everyone has to exchange on the same day? - almost always, yes its the same day. The only real risk is there's longer for the seller to change their mind, meaning you have to look elsewhere. But there would be no financial or legal risk. The issue will really be everyone else, as its more faff and people might have to book removals before they know its going ahead, but thats a relatively small £ to risk. 

Summary - Should we take solicitors advice to exchange and complete on the same day? Or instead agree to a rider or sign a disclaimer?

Personally, I'd exchange and complete the same day. For solicitors to write and agree to extra clauses could take you past 26 June anyway. Plus I don't see how that would avoid the risk of issues arising between exchange and completion. If you exchange and then someone's mortgage offer is withdrawn, the whole chain may collapse and you would be claiming money off your vendor, who would be claiming from theirs, who would be ..  etc. All the legal clauses in the world can't help you get money from someone who doesn't have it. 

momo1103

Thanks all, think we will take solicitors advice on do both on the same day. Will see how it all pans out..

[Deleted User]

I appreciate the same day thing works for a FTB who can book removals and move in at leisure. However, how does this work for the rest of the chain who need to move on the day of completion? If you book removals and something goes wrong, who is responsible for paying the fees incurred?