Buyer hospitalised after exchange

chainhell

Thanks I appreciate the response. 

AskAsk

GDB2222 said:

chainhell said:

GDB2222 said:

Flugelhorn said:

6 in the chain! I am surprised no-one has given notice to complete. 

if the gentleman was able, can he give temp PoA to the solicitor (though presume it is accessing funding that would be the issue)

Giving notice to complete is fraught. Of course, it works fine if someone in the chain just needs an impetus. 

But in this case suppose the sick person recovers in a couple of weeks and can then attend to his affairs. The chain can continue, with a delay, and everyone is happy.

instead, completion notices are issued, giving two weeks to complete. The sick person doesn’t complete and loses his deposit. The next one up gains that deposit, but he can’t complete without the funds from his sale. So, he loses his own, larger, deposit. And it ripples up the chain like that.

 The only winner is the seller at the top of the chain, who gains a 10% deposit and keeps his house. But, he may be unhappy too. Whatever his reasons for selling his house still stand, and yet he’s stuck with it until he finds a new buyer. 

So, in practice, it’s not clear that it’s in anyone’s interests to fire off a completion notice. 

Of course, everyone can claim their losses from the person at the beginning of the chain, but that could take years, and nobody really knows exactly how solvent that person is. 

I hope you don’t mind me asking a follow up.  We have heard that higher up the chain are going to issue a notice to complete on Friday.

if the chain can’t complete at the end of this period, are the deposits automatically taken or is it up to those issuing the notice to instruct a litigation solicitor and take their buyer to court for deposit plus damages?

the person is still in hospital so I’m hoping he will recover before the legal action commences 

thanks in advance 

Notice to complete gives 2 weeks to find the cash to complete your purchase. This might mean a bridging loan, bank of mum and dad, or whatever.  But if you don’t manage that in time then your deposit is forfeited. 

If your deposit was less than 10%, then that would need to be topped up by you.

Any losses suffered by your seller in excess of the 10% would potentially be a matter for litigation, or at least would not be automatic. 

If I were you I would be exploring all options to try to get the completion money together. You have nearly 3 weeks. 

If the op had agreed a deposit of less than 10% and that had already been paid as they gave exchanged, then why has she got to top it up to 10% ?

chainhell

Also exchange was done on equity not cash, does that change things 

Flugelhorn

chainhell said:

Also exchange was done on equity not cash, does that change things 

I would have thought that some cash was produced somewhere in the chain? 

chainhell

Flugelhorn said:

chainhell said:

Also exchange was done on equity not cash, does that change things 

I would have thought that some cash was produced somewhere in the chain? 

The sick buyer was a cash purchase so I wonder if the whole chain exchanged on that ?

I wonder where that leaves everyone’s deposit if the chain fails to complete after the 10 days have expired?

Flugelhorn

chainhell said:

Flugelhorn said:

chainhell said:

Also exchange was done on equity not cash, does that change things 

I would have thought that some cash was produced somewhere in the chain? 

The sick buyer was a cash purchase so I wonder if the whole chain exchanged on that ?

I wonder where that leaves everyone’s deposit if the chain fails to complete after the 10 days have expired?

goodness me! suppose that can happen but I think there is usually some more cash involved than that. I am honestly not sure and reckon someone will be able to give a more definitive answer but understand  that the definitive deposit in the contracts is 10% and there are generally agreements that far less / someone else's deposit etc are passed up the chain - but if the whole thing fails to complete then the figure in question is 10%

Gets complicated when there are 6 of you as each will be pursuing the one below  - this is a bit from a legal site about the  deposits

"In a residential property sale or purchase, the standard conditions of sale in the contract state that a 10% deposit is payable on exchange of contracts (10% of the purchase price).

 

Although a buyer may not have a full 10% deposit available on exchange of contracts, the standard conditions of the sale contract do cover the possibility of a reduced deposit. Contractually a buyer would still be liable for the full amount and the seller can pursue the buyer through the small claims court. 

 

What happens if we don’t complete?

 

The lower deposit would only be an issue if there is a breach of contract, and the buyer is unable to complete. The full deposit won’t be readily available, so the seller would need to pursue the buyer directly for the outstanding balance - through the courts if necessary as it is likely the buyer will not have the additional funds to be able to pay the balance of the deposit."

 

chainhell

That’s really useful.  As I haven’t paid any cash on exchange it would seem my vendor would have the hassle of taking me to court for the funds.  

I think that the sick buyer will be able to complete but not sure if the 10 day window gives them enough time.  

There’s a hospital visit planned tomorrow so I’ll know more then.

bridging loans could be more scary the payments would be crippling.  Unfortunately there is no bank of mum and dad.  I’ve looked into a second mortgage but the rates and penalties to repay are huge, not a lot different to the lost deposit.

so I’m hoping the chain can move forward as soon as the chap is able to transfer the cash.  

Such a stressful situation 

Flugelhorn

It should be able to move as soon as they can sort the cash. Glad to hear a visit is planned for tomorrow .He needn't be moving himself but everyone else can get going. I can imagine that with so many people involved - most potentially owing the person above but also owed by the person below that they would come to some agreement.

Are you somewhere in the middle of the chain?

GDB2222

AskAsk said:

GDB2222 said:

chainhell said:

GDB2222 said:

Flugelhorn said:

6 in the chain! I am surprised no-one has given notice to complete. 

if the gentleman was able, can he give temp PoA to the solicitor (though presume it is accessing funding that would be the issue)

Giving notice to complete is fraught. Of course, it works fine if someone in the chain just needs an impetus. 

But in this case suppose the sick person recovers in a couple of weeks and can then attend to his affairs. The chain can continue, with a delay, and everyone is happy.

instead, completion notices are issued, giving two weeks to complete. The sick person doesn’t complete and loses his deposit. The next one up gains that deposit, but he can’t complete without the funds from his sale. So, he loses his own, larger, deposit. And it ripples up the chain like that.

 The only winner is the seller at the top of the chain, who gains a 10% deposit and keeps his house. But, he may be unhappy too. Whatever his reasons for selling his house still stand, and yet he’s stuck with it until he finds a new buyer. 

So, in practice, it’s not clear that it’s in anyone’s interests to fire off a completion notice. 

Of course, everyone can claim their losses from the person at the beginning of the chain, but that could take years, and nobody really knows exactly how solvent that person is. 

I hope you don’t mind me asking a follow up.  We have heard that higher up the chain are going to issue a notice to complete on Friday.

if the chain can’t complete at the end of this period, are the deposits automatically taken or is it up to those issuing the notice to instruct a litigation solicitor and take their buyer to court for deposit plus damages?

the person is still in hospital so I’m hoping he will recover before the legal action commences 

thanks in advance 

Notice to complete gives 2 weeks to find the cash to complete your purchase. This might mean a bridging loan, bank of mum and dad, or whatever.  But if you don’t manage that in time then your deposit is forfeited. 

If your deposit was less than 10%, then that would need to be topped up by you.

Any losses suffered by your seller in excess of the 10% would potentially be a matter for litigation, or at least would not be automatic. 

If I were you I would be exploring all options to try to get the completion money together. You have nearly 3 weeks. 

If the op had agreed a deposit of less than 10% and that had already been paid as they gave exchanged, then why has she got to top it up to 10% ?

The contract includes the Standard Conditions. All residential property sales do. The top up to 10% is contained in the Standard Conditions. 

It is theoretically possible to amend any of the standard conditions, but it is unlikely that happened. 

chainhell

Really hope so, not sure if some kind of authority can be given from the buyer in hospital to a friend or conveyancer to transfer the cash while he recovers.  I’d of thought he’d want to come home to his new home rather than back to the rental.

I'm middle of the chain.  It’s complicated further as our vendors are buying on separately so effectively there’s two tops of the chain.