Buying our first house - Long stop Date issues

GaryL84

A little background first.  I am a first time buyer but my partner is not.  We are buying as tenants in common and thus not elgible for all the first time buyer benefits such as Stamp Duty expemption. We are currently privately renting and have a 1 month notice period which we plan to serve once we have completed the purchase and have the keys in hand, giving us time to move our belongings at a resonable pace.

We've run into a few issues though prior to exchanging.  I have listed our timeline so far below.

05/05/21 - AIP received.
09/05/21 - First viewed the property
> We were told the vendor was buying a new build property – est. completion 24th September.
> Advised vendor of our position and that we weren't in any hurry and would work with their schedule.
10/05/21 - Offer made.
16/05/21 - Offer Accepted.
18/05/21 - Mortgage offer received.
19/05/21 - Our conveyancer instructed.
> Conveyancer advised about possible delays in new build chains and the importance of ensuring mortgage offer validity at completion, and suggested long stop date of 31st October.  We agree.
21/05/21 - Memorandum of Sale received.
09/06/21 - Contract papers from vendor solicitor received.
14/06/21 - RICS survey report received.
14/06/21 - Vendor informs of delay putting new build completion back to 8th October.
> We now know we are going to miss the Stamp Duty Holiday window and will be £1500+ worse off, but to keep good relations with the vendor we do not bring this up or lower our offer.18/06/21 – Our lender valuation is completed.
29/07/21 – Vendor provides outstanding Gas Safety Cert & solicitor finally responds re: long stop date.
> “he would only agree to this subject to the buyer paying the costs for any rental accommodation up to the date of the purchase completing on his new property as he would not have anywhere else to live”
30/07/21 – EICR completed at our expense.
02/08/21 – Unequivocally refuse to pay for their rent.
16/08/21 – Search results received.
25/08/21 – Receive confirmation our lender is happy with search results.
08/09/21 – Vendor sol’r advises completion date of 12th November – We accept.
10/09/21 – Informed completion is on notice and the previously offered date of 12th November is not confirmed.
17/09/21 – Meeting with conveyancer to sign paperwork in lieu of exchange.
> Given that our mortgage offer expires 15th December it has become essential we put in place a long stop date of 3rd December.
> Vendor still insists this is impossible unless we agree to pay their rent should they have to move out before their new build is ready.

We're both really upset and disheartened by the continuing delays and insistance by the vendor that we agree to pay his rent for however long it takes to complete.  We arent willing to put ourselves at risk of being in breach of contract and at this point extending our mortgage offer validity seems pointless as without any confidence in a completion date, we'd still be at risk if we exchanged now without the Long Stop Date in place.

Do you think we are being unreasonable asking for a slong stop date?  Or are they being unreasonable? What do you advise we do now?  We've already spent hundreds on surveys, searches and electrical reports, not to mention the conveyancing fee (fixed fee so not sure what we owe if it falls through).  I know our outgoings are at our own risk but we really dont want to have to pull out after investing time, money and emotion into what is supposed to be our first home.

GaryL84

Noob account so I can't edit my post, but i meant Joint Tenants, not Tenants in Common.

Linton

GaryL84 said:

A little background first.  I am a first time buyer but my partner is not.  We are buying as tenants in common and thus not elgible for all the first time buyer benefits such as Stamp Duty expemption. We are currently privately renting and have a 1 month notice period which we plan to serve once we have completed the purchase and have the keys in hand, giving us time to move our belongings at a resonable pace.

We've run into a few issues though prior to exchanging.  I have listed our timeline so far below.

05/05/21 - AIP received.
09/05/21 - First viewed the property
> We were told the vendor was buying a new build property – est. completion 24th September.
> Advised vendor of our position and that we weren't in any hurry and would work with their schedule.
10/05/21 - Offer made.
16/05/21 - Offer Accepted.
18/05/21 - Mortgage offer received.
19/05/21 - Our conveyancer instructed.
> Conveyancer advised about possible delays in new build chains and the importance of ensuring mortgage offer validity at completion, and suggested long stop date of 31st October.  We agree.
21/05/21 - Memorandum of Sale received.
09/06/21 - Contract papers from vendor solicitor received.
14/06/21 - RICS survey report received.
14/06/21 - Vendor informs of delay putting new build completion back to 8th October.
> We now know we are going to miss the Stamp Duty Holiday window and will be £1500+ worse off, but to keep good relations with the vendor we do not bring this up or lower our offer.18/06/21 – Our lender valuation is completed.
29/07/21 – Vendor provides outstanding Gas Safety Cert & solicitor finally responds re: long stop date.
> “he would only agree to this subject to the buyer paying the costs for any rental accommodation up to the date of the purchase completing on his new property as he would not have anywhere else to live”
30/07/21 – EICR completed at our expense.
02/08/21 – Unequivocally refuse to pay for their rent.
16/08/21 – Search results received.
25/08/21 – Receive confirmation our lender is happy with search results.
08/09/21 – Vendor sol’r advises completion date of 12th November – We accept.
10/09/21 – Informed completion is on notice and the previously offered date of 12th November is not confirmed.
17/09/21 – Meeting with conveyancer to sign paperwork in lieu of exchange.
> Given that our mortgage offer expires 15th December it has become essential we put in place a long stop date of 3rd December.
> Vendor still insists this is impossible unless we agree to pay their rent should they have to move out before their new build is ready.

We're both really upset and disheartened by the continuing delays and insistance by the vendor that we agree to pay his rent for however long it takes to complete.  We arent willing to put ourselves at risk of being in breach of contract and at this point extending our mortgage offer validity seems pointless as without any confidence in a completion date, we'd still be at risk if we exchanged now without the Long Stop Date in place.

Do you think we are being unreasonable asking for a slong stop date?  Or are they being unreasonable? What do you advise we do now?  We've already spent hundreds on surveys, searches and electrical reports, not to mention the conveyancing fee (fixed fee so not sure what we owe if it falls through).  I know our outgoings are at our own risk but we really dont want to have to pull out after investing time, money and emotion into what is supposed to be our first home.

No one is being unreasonable.  Why should the vendors move out when they havent got a home to move into?  Why should they commit to possibly many weeks in rented accommodation purely for your benefit?  On the other hand why should you wait for ever at emotional and financial cost.  It's simply that in the current situation there is no way of meeting both side's requirements.

If you want to force the issue threaten to pull out, but that doesnt actually help you.  You must intend to implement any threat you make, and if you do you still wont get your house in time. 

The fairest solution is perhaps if you offer to pay 50% of their rental costs.  Otherwise you probably will have to live with the situation, extending your mortgage offer if necessary.

AdrianC

The only really relevant details in all of that are that the vendor is buying a new-build, and that's slipping.

The end of the SDLT reduction is not the vendor's problem.

If you want the vendor to complete before their purchase is ready, they have every right to say "that's fine, but who's paying for it?" - just as you can, of course, decline. And you did say back at the time of your offer that you weren't in a hurry, and were happy to go with their timescale...

As for the EICR - you want it, doesn't seem unreasonable you pay for it. There's no requirement to have one, nor GSC.

pinkshoes

If your mortgage expires 15th December, then make it clear that you are happy to exchange once they can agree to a completion date that is before 15th December 2021. 

If they are unable to do this, then they will have to wait while you apply for another mortgage, and you will be deducting any mortgage fee from the offer. 

Unless you are completely in love with this property, I think I would be prepared to maybe walk away, or at least start looking at other properties. 

eddddy

It sounds like you understand the issues - and there is no easy solution.

If you walk away, it's likely that your sellers will lose their newbuild - they will no longer be proceedable, so the developer will probably look for another buyer.

So if you start talking about having to walk away over this, your seller's attitude might change.



Is the EA progressing the sale (or are you just communicating via solicitors)?  A good EA will be an experienced negotiator - and keen to get their fee. This is the sort of problem that an EA should be trying to resolve.

But bear in mind that the EA will try to persuade the seller to compromise, and they'll also try to persuade you to compromise - so be prepared to stand your ground.

GaryL84

It was sold through Strike so there's no 3rd party/EA really involved. Strike say they hav agents who can be involved but we've had nothing from them. We've been dealing directly with the vendor and through our conveyancing solicitor.

The thing that bugs me the most is noone is asking them to move out into rented acommodation.  We just want protection in case we exchange and havent been able to complete by the 15th December.  The LSD would simply serve to let us off the hook, legally speaking, before the mortgage expires.

If they're as confident in the Nov 12th date as they were originally making out then I dont see a problem with a December LSD.  Basically we're in the position now where feel we either 1) agree a LSD and proceed with the hope we complete in time, 2) Agree to the LSD but fail to complete in time so pull out in December, or 3) dont agree the LSD and pull out right now.  Im not risking exchanging without the mortgage offer in place.

I guess I'll wait and see what the solicitors have to say to each other.  Their builders have started pushing them to exchange and thus they are pushing us too, but we have requested a little time to get this LSD ironed out and need a reasonably advanced exchange date so we can sort buildings insurance quotes re: an advisory that came up in the searches.

Thrugelmir

GaryL84 said:

The thing that bugs me the most is noone is asking them to move out into rented acommodation.  

The only person that can ask is you. Not easy to find a short term rental, then there's all the hassle that goes with it. Everybody has their own agenda. I'm sure the vendor is equally frustrated with the time scale slipping. Given the shortage of materials, fixtures and labour. No great surprise. 

Irishpearce26

.

The thing that bugs me the most is noone is asking them to move out into rented acommodation.  We just want protection in case we exchange and havent been able to complete by the 15th December.  The LSD would simply serve to let us off the hook, legally speaking, before the mortgage expires.

You have asked this, they want you to pay for it. The vendor is protecting themselves which is sensible albeit inconvenient for you. Check with your lender regarding offer extension as that may solve your problem.

30/07/21 – EICR completed at our expense.

Of course its at your expense, you want an electrical report you pay for it.

We're both really upset and disheartened by the continuing delays and insistance by the vendor that we agree to pay his rent for however long it takes to complete.  We arent willing to put ourselves at risk of being in breach of contract and at this point extending our mortgage offer validity seems pointless as without any confidence in a completion date, we'd still be at risk if we exchanged now without the Long Stop Date in place.

Why would you be at risk of breaching the contract, if the vendor wants to exchange a date needs to be set for completion. Also why doesn't the vendor have a long stop with the developer, as they have moved the planned date he is within his right to do so.
 

GaryL84

Irishpearce26 said:

30/07/21 – EICR completed at our expense.

Of course its at your expense, you want an electrical report you pay for it.

We're both really upset and disheartened by the continuing delays and insistance by the vendor that we agree to pay his rent for however long it takes to complete.  We arent willing to put ourselves at risk of being in breach of contract and at this point extending our mortgage offer validity seems pointless as without any confidence in a completion date, we'd still be at risk if we exchanged now without the Long Stop Date in place.

Why would you be at risk of breaching the contract, if the vendor wants to exchange a date needs to be set for completion. Also why doesn't the vendor have a long stop with the developer, as they have moved the planned date he is within his right to do so.
 

The EICR point was made because, I dont know about you but, I want to know the house im living in is safe.  They'd never had any inspection done nor had any records of gas safety checks.  Both were highlighted by the survey.  The gas safety inspection came back ok but turns out the consumer unit is missing RCD protection which is well worth noting in my book.  It'll need replacing with an 18th edition unit.

As far as the breach of contract remark, they want to exchange immediately with completion on notice.  That means there is no date for completion.  its whenever their builder serves notice which could be at any time.  If we exchange as you know we are legally bound to buy the property, however if when they issue notice to complete we dont have a valid mortgage offer, we cant proceed and such will be in breach of contract paying a fine for each day that passes outside of the 10 day completion window.

The vendor does have a long stop with their builder, but its 6 months from the given build finish date, which last we heard was estimated November - thus their long stop is April 2022. 

Irishpearce26

GaryL84 said:

Irishpearce26 said:

30/07/21 – EICR completed at our expense.

Of course its at your expense, you want an electrical report you pay for it.

We're both really upset and disheartened by the continuing delays and insistance by the vendor that we agree to pay his rent for however long it takes to complete.  We arent willing to put ourselves at risk of being in breach of contract and at this point extending our mortgage offer validity seems pointless as without any confidence in a completion date, we'd still be at risk if we exchanged now without the Long Stop Date in place.

Why would you be at risk of breaching the contract, if the vendor wants to exchange a date needs to be set for completion. Also why doesn't the vendor have a long stop with the developer, as they have moved the planned date he is within his right to do so.
 

The EICR point was made because, I dont know about you but, I want to know the house im living in is safe.  They'd never had any inspection done nor had any records of gas safety checks.  Both were highlighted by the survey.  The gas safety inspection came back ok but turns out the consumer unit is missing RCD protection which is well worth noting in my book.  It'll need replacing with an 18th edition unit.

As far as the breach of contract remark, they want to exchange immediately with completion on notice.  That means there is no date for completion.  its whenever their builder serves notice which could be at any time.  If we exchange as you know we are legally bound to buy the property, however if when they issue notice to complete we dont have a valid mortgage offer, we cant proceed and such will be in breach of contract paying a fine for each day that passes outside of the 10 day completion window.

The vendor does have a long stop with their builder, but its 6 months from the given build finish date, which last we heard was estimated November - thus their long stop is April 2022. 

I never questioned the reason for an EICR only that its your responsibility to pay for it. All of what you say is todays regulations and when you sell it will be completely different and you likely wont have todays checks done.

Have you checked with the lender as to what extension they give to offers? Many give up to 3 months. This is probably your best solution, put in some comments in the contract around not being penalised if your offer expires due to the November deadline passing.