Buyer hospitalised after exchange

GDB2222

chainhell said:

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

It changes the practical aspects of getting paid,, but not the liability.  The 10% liability is a clear contractual liability that is easy to prove in court. There’s no arguing about it. So, if you are solvent, you will be advised to pay it and avoid court fees on top.

You can contrast that with losses in excess of the 10% where there could well be arguments about whether the losses were reasonably incurred. 

GDB2222

chainhell said:

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 

Although bridging loans are scary, you are making the wrong comparison. Your losses are NOT limited to your 10% deposit. They are likely to be far, far higher. 

Your seller will lose AT LEAST his own 10% deposit, which is likely to be a lot more than your deposit. So, if his loss is £30k, and your 10% is £20k, he’ll sue you for the difference.

But that’s happening throughout the chain, so your liability is actually likely to be at least 10% of the highest priced property in the chain above you. (If the chain splits, obviously you need to add the two halves together.). This could be several times your own deposit.

 I wish you luck, and I hope it all sorts itself out, but you do need to be realistic about your liabilities if it doesn’t. Personally, I’d be sorting out bridging finance, but without committing to anything until the last minute.  

You may have a duty to do that, so as to mitigate your losses. You should definitely be asking your solicitor about this. 

Flugelhorn

GDB2222 said:

chainhell said:

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 

Although bridging loans are scary, you are making the wrong comparison. Your losses are NOT limited to your 10% deposit. They are likely to be far, far higher. 

Your seller will lose AT LEAST his own 10% deposit, which is likely to be a lot more than your deposit. 

Your liability is actually likely to be at least 10% of the highest priced property in the chain. (If the chain splits, obviously you need to add the two halves together.). This could be several times your own deposit.

 I wish you luck, and I hope it all sorts itself out, but you do need to be realistic about your liabilities if it doesn’t. Personally, I’d be sorting out bridging finance, but without committing to anything until the last minute.  

You may have a duty to do that, so as to mitigate your losses. You should definitely be asking your solicitor about this. 

doesn't everyone in the chain have a duty to do that then?

perhaps  it really  only needs the first person above the chap in hospital to get moving? 

 If the person below @chainhell ie not the chap in hospital can get a loan to move on then the chain would shift. 

sounds like the people nearer the top may be buying 2 properties hence 2 lots of expenses / deposits etc to pass down the line. 

get the one nearest the bottom moving quick!

GDB2222

Flugelhorn said:

GDB2222 said:

chainhell said:

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 

Although bridging loans are scary, you are making the wrong comparison. Your losses are NOT limited to your 10% deposit. They are likely to be far, far higher. 

Your seller will lose AT LEAST his own 10% deposit, which is likely to be a lot more than your deposit. 

Your liability is actually likely to be at least 10% of the highest priced property in the chain. (If the chain splits, obviously you need to add the two halves together.). This could be several times your own deposit.

 I wish you luck, and I hope it all sorts itself out, but you do need to be realistic about your liabilities if it doesn’t. Personally, I’d be sorting out bridging finance, but without committing to anything until the last minute.  

You may have a duty to do that, so as to mitigate your losses. You should definitely be asking your solicitor about this. 

doesn't everyone in the chain have a duty to do that then?

perhaps  it really  only needs the first person above the chap in hospital to get moving? 

 If the person below @chainhell ie not the chap in hospital can get a loan to move on then the chain would shift. 

sounds like the people nearer the top may be buying 2 properties hence 2 lots of expenses / deposits etc to pass down the line. 

get the one nearest the bottom moving quick!

It’s a matter of case law whether there’s a duty to get bridging finance, and the OP should seek legal advice. This regrettable situation has obviously occurred before.

Generally, there’s an obligation to mitigate losses, though.

 don’t know why, but I assumed the op was the one nearest the bottom. 

chainhell

I think I might look at other mortgage options just in case the person doesn’t recover in 10 days.  I was holding off doing that as I wasn’t sure if a new mortgage application would jeopardise my current offer.  Plus rates are terrible for a second mortgage.  

Sounds like if the chain doesn’t meet the new deadline it’s going to cost a lot whichever option I go for.  This is such an awful position to be in.  My solicitor keeps reassuring me that any losses will be passed down the chain but it sounds as though that process will be complicated.  

Flugelhorn

GDB2222 said:

Flugelhorn said:

GDB2222 said:

chainhell said:

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 

Although bridging loans are scary, you are making the wrong comparison. Your losses are NOT limited to your 10% deposit. They are likely to be far, far higher. 

Your seller will lose AT LEAST his own 10% deposit, which is likely to be a lot more than your deposit. 

Your liability is actually likely to be at least 10% of the highest priced property in the chain. (If the chain splits, obviously you need to add the two halves together.). This could be several times your own deposit.

 I wish you luck, and I hope it all sorts itself out, but you do need to be realistic about your liabilities if it doesn’t. Personally, I’d be sorting out bridging finance, but without committing to anything until the last minute.  

You may have a duty to do that, so as to mitigate your losses. You should definitely be asking your solicitor about this. 

doesn't everyone in the chain have a duty to do that then?

perhaps  it really  only needs the first person above the chap in hospital to get moving? 

 If the person below @chainhell ie not the chap in hospital can get a loan to move on then the chain would shift. 

sounds like the people nearer the top may be buying 2 properties hence 2 lots of expenses / deposits etc to pass down the line. 

get the one nearest the bottom moving quick!

It’s a matter of case law whether there’s a duty to get bridging finance, and the OP should seek legal advice. This regrettable situation has obviously occurred before.

Generally, there’s an obligation to mitigate losses, though.

 don’t know why, but I assumed the op was the one nearest the bottom. 

I think @chainhell might be stuck right in the middle 

Chap in hospital > house 1 (chainhell's buyers)  > chainhell > chainhell's vendors > 2 houses being bought by chainhell's vendors 

chainhell

Yes does the position play a big role in this?

Flugelhorn

chainhell said:

Yes does the position play a big role in this?

I suppose that each person from the top down sends their expenses to the one below them, who then adds their own and passes it on down - probably means that the lower down the chain, the higher the costs?

Are you buyers commenting much ?

saajan_12

Flugelhorn said:

GDB2222 said:

chainhell said:

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 

Although bridging loans are scary, you are making the wrong comparison. Your losses are NOT limited to your 10% deposit. They are likely to be far, far higher. 

Your seller will lose AT LEAST his own 10% deposit, which is likely to be a lot more than your deposit. 

Your liability is actually likely to be at least 10% of the highest priced property in the chain. (If the chain splits, obviously you need to add the two halves together.). This could be several times your own deposit.

 I wish you luck, and I hope it all sorts itself out, but you do need to be realistic about your liabilities if it doesn’t. Personally, I’d be sorting out bridging finance, but without committing to anything until the last minute.  

You may have a duty to do that, so as to mitigate your losses. You should definitely be asking your solicitor about this. 

doesn't everyone in the chain have a duty to do that then?

perhaps  it really  only needs the first person above the chap in hospital to get moving? 

Yes, but if the others don't, OP will be left with the claims from everyone higher in the chain for the highest deposit and any additional costs. OP can claim from their buyer, but if they're not solvent enough then OP would be left holding the bag. The less risky thing if at all possible, would be to break the chain, complete on one side and have a limited amount to claim from OP's buyer. 

chainhell

Nothing from our buyers their just waiting for news like the rest of us.  I think I will start looking into alternative financing for worst case scenario