5 months in and buyers-buyer now refusing to exchange until a limited company

WorkHealth

Hi
We are selling our house to our buyer and ready to exchange. Now the buyers-buyer after 5 months has said they will not exchange until their flat they live in now is a limited company. 

dimbo61

What have you got to lose if you ask your estate agents to continue advertising your home ?
With the current delays at solicitors I would speak to your solicitor about how difficult it is to form a limited company and buy the vendors/buyers property before 31st of March

TripleH

It takes 10 minutes to form a limited company online (only if you know what you're doing) alternatively you can buy a pre-setup one and transfer everything into that quite quickly. If your buyer's buyer wants that, I can't see why they haven't done that already, being very generous on costs it shouldn't be more than £200. The issue I suspect will be that the buyer's buyer may struggle to get all other flat holders where their flat is based to agree to form a limited company. 
This sounds a little like they need to cease with their personal prostate check and get a move on.

Scotbot

Presumably the flat is leasehold, what I would want to know is whether this will complicate matters.

lr1277

I don’t know if this is relevant or if I am even on the right track, but....

Will the limited company require a bank account? Say to make payments to their seller? Many banks weren’t opening business accounts and if they were it was taking weeks. Though it maybe possible for the business owner to pay from a personal account and then sort out the business stuff later.

princeofpounds

It takes moments to open a limited company. It's very easy to open a business bank account despite reports of Covid disruption - you just have to pick a bank that isn't disrupted; several of the online banks are totally fine. However in this case it may not even be necessary, as the property is probably being transferred for zero or peppercorn consideration (price). Transferring the property into the limited company may take a bit longer - a solicitor will need to draw up the paperwork between the client and their company, send back and forth to client for signing. Processing the land registration can take weeks but I don't think it's a critical step as it's effectively just a record of the transaction, not the action transaction itself.

So yes, it should be days rather than weeks.

However, it's really bad form to have sprung this at the last moment. So I would be putting some pressure down the chain. Something like 'It's been 5 months, and we are being presented with a surprise delay with no particularly insightful explanation or expected timeline. Whilst we are still committed to the transaction if it is exchanged within a timely manner, at some point we need to protect our interests if other parties in the chain are not operating in good faith. Therefore we will be remarketing the property in two week's time (adjust as you see fit) if we have not exchanged by that date'. 

Obviously if you do remarket the property, the transaction can still go ahead if they get their act together - they will be way ahead of any other potential buyer. You want to give them fair notice but you also don't want to waste time if they can't come through.

Or, you can be patient for a week or two and then go down this route, you don't have to hardball it. To be honest, I suspect that you'll be ok; if someone was just playing for time this would be a rather unusual excuse to use.

MaryNB

WorkHealth said:

It now appears there is no proof any financing is in place - we've given them 48 hours to prove it though doubt we will hear back. We're speaking to our EA on Friday so will see then. He wants us to continue but think he just cant' be bothered to remarket. 

Seems like the EA ballsed up there! 5 months and they never checked?
He probably want to continue so he can get his commission asap and not have to wait another 4 months or so for a new buyer.