Ensure vacancy before exchange and completion same day

BarelySentientAI

bbbuyer said:

RHemmings said:

silvercar said:

bbbuyer said:

We are FTB, house is occupied by the owner’s family. We do not want to risk and have to deal with them still there when completion.

We do not need to move on the day (as we have rent overlap) so we can postpone it.

You won’t have to deal with them. It is the seller’s responsibility to ensure vacant possession. There are financial penalties for not providing vacant possession, but these only apply once you have exchanged, until then anyone can back out. In one sense exchanging and completing on the same day is far riskier.

This is what I was thinking. There was another thread where a seller was aware of the risk of tenants not moving out, and wanted to protect themselves from that risk. (The MSE poster was the buyer). This, to my eyes, shifts inconvenience and costs (sunk) to be shared with the buyer, when this is the seller's responsibility. It seems similar here. The vendor wants to be able to back out if vacant possession is not achieved. Not as big a problem if exchange is significantly before completion. But, same day? 

It’s riskier to whom, and why is that?

We were told a few times house would be vacant before exchange, but turns out that wasn’t the cause. There were other bits of information that lead us to worry and thus we want to ensure vacant before exchange. 

We were advised on this by solicitor and our mortgage broker.

All I wanted to find out is if we can cancel the purchase on the day of simultaneous exchange completion if the house is actually not vacant when we inspect on the day. (Without any breach or monetary costs)

We do not care in the slightest if completion gets delayed - we will be upset if purchase falls through but not the end of the world as it’s a house with potential but not one we love.

I still don't understand your problem.

If the contract says vacant on exchange, and you discover that the house is not vacant on exchange, there are penalties in the contract.  If your desired response to "not being vacant" is to cancel the purchase, then get the contract to say that the penalty for not being vacant is that the purchase is cancelled.

You can't enforce the contract before exchanging it though.

Same day exchange/completion doesn't necessarily mean simultaneous exchange/completion either.  Exchange, then inspect, and then decide whether the contract has been complied with before completing later that day.

If you back out before exchange, nobody is breaching anything and nobody is liable for anything, because there is no contract.

theartfullodger

FlorayG said:

Nobody in their right mind would accept exchange and completion on the same day
...........

Thank you for your kind MH diagnosis of myself.

I and my sister were flogging our late brother's house (basically untouched since 1971...).  We both lived elsewhere, no issues about moving.  Arranged exchange & completion same day.. No issues.

Last time I checked I hadn't been sectioned (yet...).  Best regards to all.

saajan_12

<blockquote class="Quote">

  <div><a rel="nofollow" href="https://forums.moneysavingexpert.com/profile/bbbuyer">bbbuyer</a> said:</div>

  <div>They have place to go to available right now, it’s not dependent on sale.<br><br>we were told they were not tentants but we got lots of disparate information from sellers that we do not know what to believe.<br><br>Before, sellers were adamant to exchange before vacancy. We pushed to vacant on exchange - seller proposed same day exchange completion and they also proposed we can verify it’s vacant on the day itself <b>before</b> exchange!<br>I just want to be sure that is actually possible to do.</div>

</blockquote>

Yes its possible to do. The order of events woudl be <br>- sign contracts ahead of time in readiness which say exchange and complete on day x<br>- on day x, check the property is vacant<br>- If property is not vacant, then instruct solicitor to do nothing. <br>- OR If property is vacant, then phone solicitor and instruct them to go ahead<br>- solicitor exchanges contracts and transfers the money (ie completion)<br>- you get the keys and can move in at your leisure.&nbsp;<br><br>The only downside of this is if you don't end up completing then anything you've spent on removals etc is wasted. If you were going ot have a long overlap and move later anyway then this may not matter to you.&nbsp;<br><br><br>BarelySentientAI said:

bbbuyer said:

RHemmings said:

silvercar said:

bbbuyer said:

We are FTB, house is occupied by the owner’s family. We do not want to risk and have to deal with them still there when completion.

We do not need to move on the day (as we have rent overlap) so we can postpone it.

You won’t have to deal with them. It is the seller’s responsibility to ensure vacant possession. There are financial penalties for not providing vacant possession, but these only apply once you have exchanged, until then anyone can back out. In one sense exchanging and completing on the same day is far riskier.

This is what I was thinking. There was another thread where a seller was aware of the risk of tenants not moving out, and wanted to protect themselves from that risk. (The MSE poster was the buyer). This, to my eyes, shifts inconvenience and costs (sunk) to be shared with the buyer, when this is the seller's responsibility. It seems similar here. The vendor wants to be able to back out if vacant possession is not achieved. Not as big a problem if exchange is significantly before completion. But, same day? 

It’s riskier to whom, and why is that?

We were told a few times house would be vacant before exchange, but turns out that wasn’t the cause. There were other bits of information that lead us to worry and thus we want to ensure vacant before exchange. 

We were advised on this by solicitor and our mortgage broker.

All I wanted to find out is if we can cancel the purchase on the day of simultaneous exchange completion if the house is actually not vacant when we inspect on the day. (Without any breach or monetary costs)

We do not care in the slightest if completion gets delayed - we will be upset if purchase falls through but not the end of the world as it’s a house with potential but not one we love.

I still don't understand your problem.

If the contract says vacant on exchange, and you discover that the house is not vacant on exchange, there are penalties in the contract.  If your desired response to "not being vacant" is to cancel the purchase, then get the contract to say that the penalty for not being vacant is that the purchase is cancelled.

You can't enforce the contract before exchanging it though.

Same day exchange/completion doesn't necessarily mean simultaneous exchange/completion either.  Exchange, then inspect, and then decide whether the contract has been complied with before completing later that day.

If you back out before exchange, nobody is breaching anything and nobody is liable for anything, because there is no contract.

I don't understand your comments. The contract wouldn't need to specify criteria or penalties for what happens upon exchange, as the OP would simply not exchange if the criteria weren't met. THere's no question of enforcing anything before exchange. I think you're unnecessarily confusing things. 

BarelySentientAI

saajan_12 said:

I don't understand your comments. The contract wouldn't need to specify criteria or penalties for what happens upon exchange, as the OP would simply not exchange if the criteria weren't met. THere's no question of enforcing anything before exchange. I think you're unnecessarily confusing things. 

The OP didn't specify whether they would be inspecting the property before exchange or on the day but after exchange.  Both are possible.  And it was also mentioned that they were worried about turning up at completion to discover the vendors family still in occupation.  Hence my comments covered both options.

The original question said "can I pull out the day before exchange" iirc, which is a much easier answer - "yes, you can pull out up to the second before exchange with no penalty".

user1977

BarelySentientAI said:

saajan_12 said:

I don't understand your comments. The contract wouldn't need to specify criteria or penalties for what happens upon exchange, as the OP would simply not exchange if the criteria weren't met. THere's no question of enforcing anything before exchange. I think you're unnecessarily confusing things. 

The OP didn't specify whether they would be inspecting the property before exchange or on the day but after exchange.

From the OP: "we can check it’s vacant on day prior to exchange"

bbbuyer

Yes if the property is not vacant on the day before exchange we will not authorise the solicitor to proceed.
we were just wondering if there was any risk to us there or potential liability but apparently not.
(besides the risk of not completing)

DE_612183

bbbuyer said:

Yes if the property is not vacant on the day before exchange we will not authorise the solicitor to proceed.
we were just wondering if there was any risk to us there or potential liability but apparently not.
(besides the risk of not completing)

No Exchange = No Contract = No Penalty

400ixl

bbbuyer said:

Yes if the property is not vacant on the day before exchange we will not authorise the solicitor to proceed.
we were just wondering if there was any risk to us there or potential liability.
(besides the risk of not completing)

And the risk the seller then decides they do not wan't to sell it to you and they walk away rather than agree another date.

If you say that they can move at before the completion date, then why not have an inspection date for it being vacant, then the following day do the exchange and then in a few days or even next day do the completion.

As you are in rented then what you are proposing can work as the problem with exchange and completion all on the same day is that sometimes it completes very late in the day or sometimes doesn't happen to the next day. This would be an issue if you are part of a chain but it doesn't sound like there is, so if there was a delay you wouldn't have an issue.

I'd still do it over a couple of days to remove some of the stress personally.

RHemmings

bbbuyer said:

RHemmings said:

silvercar said:

bbbuyer said:

We are FTB, house is occupied by the owner’s family. We do not want to risk and have to deal with them still there when completion.

We do not need to move on the day (as we have rent overlap) so we can postpone it.

You won’t have to deal with them. It is the seller’s responsibility to ensure vacant possession. There are financial penalties for not providing vacant possession, but these only apply once you have exchanged, until then anyone can back out. In one sense exchanging and completing on the same day is far riskier.

This is what I was thinking. There was another thread where a seller was aware of the risk of tenants not moving out, and wanted to protect themselves from that risk. (The MSE poster was the buyer). This, to my eyes, shifts inconvenience and costs (sunk) to be shared with the buyer, when this is the seller's responsibility. It seems similar here. The vendor wants to be able to back out if vacant possession is not achieved. Not as big a problem if exchange is significantly before completion. But, same day? 

It’s riskier to whom, and why is that?

We were told a few times house would be vacant before exchange, but turns out that wasn’t the cause. There were other bits of information that lead us to worry and thus we want to ensure vacant before exchange. 

We were advised on this by solicitor and our mortgage broker.

All I wanted to find out is if we can cancel the purchase on the day of simultaneous exchange completion if the house is actually not vacant when we inspect on the day. (Without any breach or monetary costs)

We do not care in the slightest if completion gets delayed - we will be upset if purchase falls through but not the end of the world as it’s a house with potential but not one we love.

First, until contracts are exchanged, you can walk away. So, if you have exchange and completion on the same day, you can walk away right up to that day. I.e. cancel your purchase. Sunk costs will be gone, but that's house-buying in the UK. 

Once exchange has happened with a normal contract specifying vacant possession, if the seller then can't provide vacant possession on the agreed day, then they can be responsible for the buyer's reasonable costs. This means that the seller has quite a bit of responsibility to make sure that vacant possession is true at completion. This doesn't mean that there are no risks for buyers, particularly inconvenience. But, the main risk if vacant possession isn't achieved by the day of completion is on the seller. 

However, there is nothing that forces you to seek expensive compensation from the seller. You could agree to allow completion to be delayed, and that may work for everyone. Since your primary aim is that you get the house in the end.

To provide more context/description of what I'm talking about:

Some owners with tenants want to have the tenants in the property right up until completion, to maximise rental income from the property. For example, they will issue a Section 21 notice giving notice to move out just before completion. This has high risks because if the tenants don't move out on that day, then vacant possession has not been achieved by completion day, and the seller is on the (legal) hook. 

So, we see situations where the seller tries to have their cake and eat it too. E.g. if exchange and completion are on the same day (as here), then if vacant possession is not achieved because the tenants don't move out, then the seller can just walk away from the sale. They will have lost sunk legal and other costs, but these are typically much less than if they had exchanged promising vacant possession, but on completion day this cannot be achieved.

On the other hand, the buyer will have sunk costs including legal costs, surveys, deposits for moving costs, etc. And, they may have all sorts of other inconvenience to deal with. The risk for the seller is higher because they can't claim any of these costs back from the seller.

If I remember correctly, in a previous thread, a seller wanted to have an exchange of contracts, but making the contract conditional on vacant possession being achieved. So, as I understood it, again the seller can just walk away if vacant possession is not achieved. 

The solution here seems to me to be to have exchange and completion at least a week or two apart, and for the contract to specify vacant possession. But, it seems to me that your seller doesn't want this - they want to have their cake and eat it too. That's my personal impression. 

BarelySentientAI

user1977 said:

BarelySentientAI said:

saajan_12 said:

I don't understand your comments. The contract wouldn't need to specify criteria or penalties for what happens upon exchange, as the OP would simply not exchange if the criteria weren't met. THere's no question of enforcing anything before exchange. I think you're unnecessarily confusing things. 

The OP didn't specify whether they would be inspecting the property before exchange or on the day but after exchange.

From the OP: "we can check it’s vacant on day prior to exchange"

True, but also from the OP in a different post:

"we can cancel the purchase on the day of simultaneous exchange completion if the house is actually not vacant when we inspect on the day"

bbbuyer said:

Yes if the property is not vacant on the day before exchange we will not authorise the solicitor to proceed.
we were just wondering if there was any risk to us there or potential liability but apparently not.
(besides the risk of not completing)

No liability to the other side before exchange.

Risk to you is losing the purchase, still needing to pay your solicitor etc, and having to start searching for a house again.