Buyer hospitalised after exchange

chainhell

I wonder if anyone can share their experience or expertise.  I am in a chain, exchanged a couple of weeks ago, completion date has passed. 

It’s been established that the cash buyer at the bottom of the chain has been uncontactable for a week.  His solicitor has established he is in hospital. 

He has made no contact with his solicitor during this time so I would assume he’s pretty unwell.

I wondered what would happen if the buyer passes away or incapacitated.  They have no next of kin in the UK.

Obviously feel terrible for the man in hospital but also I’ve been reading about the impact of me not completing on my purchase and it’s terrifying!

silvercar

In theory the ill buyer’s solicitor can complete with the buyer still in hospital. The buyer should still be able to arrange for all necessary funds to be with the solicitor in time for completion, in fact he may already have done this. 

If the unfortunate buyer actually passes away before completion, it is a big problem. In theory any costs resulting from this are passed along the chain and end up with the buyer’s estate. It would delay things considerably. Worst case the property needs re marketing and selling and any losses in doing so are passed to the estate of the deceased.

Being uncommunicative and in hospital for a week doesn’t automatically mean he’s likely to die.

pinkshoes

If the buyer passes away then he won't be needing a house... so it might not be sensible for his estate to complete on the sale. 

But... his estate will owe money for any expenses down the chain for a failed completion. So your buyer claims from you, you then claim this amount from the estate. Keep a record of any expenses. 

How many people in the chain? 

As he was a cash buyer, then you will get your money back as at least he clearly has assets! 

If he'd already exchanged, then could the solicitor not complete on his behalf? The solicitor would need to act in the client's best interests, so they need to establish whether completing then selling on the property would be better than not completing and paying out for all the losses. 

A distant relative of mine died between exchange and completion. My family completed the sale for him as they had POA and realised that not completing would cost them a lot of money in expenses as the people purchasing had to move out of their rental. 

chainhell

Thanks for the quick reply, original completion date has already passed.  We are currently in limbo.  Really hope the gentleman will be ok but we know he is elderly so the thought did cross my mind.

silvercar

chainhell said:

Thanks for the quick reply, original completion date has already passed.  We are currently in limbo.  Really hope the gentleman will be ok but we know he is elderly so the thought did cross my mind.

Your solicitor should be advising you. I would say you serve notice on him to complete and see what happens. His solicitor may be playing for time. 

chainhell

We don’t believe the solicitor currently has all the funds to complete.  I assume the buyer was taken ill before they had chance to transfer the balance.  Not 100% sure on this though!

user1977

pinkshoes said:

If he'd already exchanged, then could the solicitor not complete on his behalf? The solicitor would need to act in the client's best interests

If the solicitors have the funds (and the client has e.g. signed everything they need to), perhaps. But if everything was already set up then I doubt anybody would be raising this as a major problem.

pinkshoes

chainhell said:

We don’t believe the solicitor currently has all the funds to complete.  I assume the buyer was taken ill before they had chance to transfer the balance.  Not 100% sure on this though!

Then this is definitely something to establish. 

I agree with @silvercar about getting the solicitor to serve notice to complete but it would be worth finding out if the money is there first. 

If he is a cash buyer, where is he currently living??? In rented and buying himself a house?

user1977

pinkshoes said:

chainhell said:

We don’t believe the solicitor currently has all the funds to complete.  I assume the buyer was taken ill before they had chance to transfer the balance.  Not 100% sure on this though!

If he is a cash buyer, where is he currently living??? In rented and buying himself a house?

We don't know he's planning to move in at all.

PRAISETHESUN

Something similar happened to my parents several years ago with a previous house purchase. They had exchanged contracts and then the seller unfortunately passed away. No chain on either end, but it still threw a spanner in the works and slowed things down for a few extra months. 

Even with exchanged contracts the solicitors didn't feel comfortable finalising the sale until the will had been sorted and probate granted, which slowed things down. And then there was a bit of disagreement with the executors as they wanted to try and renegotiate the already exchanged contracts. When it was pointed out that the estate was liable for any losses incurred by not completing, including for the few month delay they had already experienced, they changed tune pretty quickly.

AskAsk

doesn't sound good.  but yeah, if he fails to complete, there is penalty for that, charged at interest rate from completion day.  if he ends up not completing at all, then you get to keep the deposit and he has to pay expenses.

as you are in a chain, the people higher up also get to keep your deposit, yikes and you have to pay their expenses, ouch.

what a complete mess but i have heard of cases where someone died between exchange and completion.