Buyer at auction may not complete purchase

MidasInReverse

We sold a property at auction and under the contract completion is due in one week's time. His solicitor was sent the legal pack one month ago. However he has failed to respond to our solicitor on it so it appears that the buyer is dragging his feet about completing or has instructed his solicitor to delay responding.
I don't understand why he would delay as we might have the right to terminate the contract he might have to surrender his 10 per cent deposit to us. The auctioneers have told us that interest might be payable too on the balance of the purchase.
Is that interest payable by the buyer from the day after completion if he fails to complete as I was worried that the interest might be for us to pay. However, that doesn't sound right as we've done nothing to delay the completion of the purchase.
Another odd thing. The propsepctive buyer sent a surveyor round to the property today to measure up all the rooms. The surveyor had colelcted the keys from our managing agent and we knew nothing about this until after the event. Is the prospective buyer allowed to do this?

eddddy

MidasInReverse said:

We sold a property at auction and under the contract completion is due in one week's time. His solicitor was sent the legal pack one month ago. However he has failed to respond to our solicitor on it so it appears that the buyer is dragging his feet about completing or has instructed his solicitor to delay responding.

I'm assuming this is a 'traditional' unconditional auction...
... and not a conditional auction (sometimes called 'The Modern Method of Auction).


Is your solicitor simply saying "I haven't heard anything from the buyer's solicitor yet"?

If so, that's probably nothing to worry about. (Or has your solicitor suggested that you should be worrying?)

MidasInReverse said:

Another odd thing. The propsepctive buyer sent a surveyor round to the property today to measure up all the rooms. The surveyor had colelcted the keys from our managing agent and we knew nothing about this until after the event. Is the prospective buyer allowed to do this?

There's no law saying that the buyer can't do that.
And there's probably nothing in the contract saying that the buyer can't do that.

But I guess your managing agent shouldn't be giving people your keys without your consent.


(Who do you mean by 'our managing agent'? Do you mean the freeholder's managing agent, or your letting agent, or your selling/estate agent, or something else?

Why do they have your keys?
How did the buyer know that they have your keys?)

anselld

There is very little for solicitors to do in a traditional auction purchase.  Hence a 28 day completion cycle tends to become 27 days of doing nothing and then press the button.  There is nothing for your solicitor to do as all the documentation is in the auction pack and the sale is unconditional so there are no "enquiries" etc.  Assuming you have the 10% in hand I would wait and see what happens.

MidasInReverse

In reply to those who have answered, this was a traditional auction as far as I know. The deposit was 10 per cent and is being held by the auctioneers. I believe that the completion date is set out in the sale contract as 21 May. The solicitor has also mentioned to us that interest is payable at 8.25% on the balance of the sale price from the day after completion. I hope that this interest is payable by the buyer, not us, for each day that completion is delayed. 
The solicitor has heard nothing from the buyer's solicitor and had sent him the legal pack on 15th April so he chased him yesterday.
I can't believe that the buyer would surrender his deposit to us voluntarily or that they would want to pay interest as ell, although they are mega rich, owning and renting properties all over London.
To answer anselld, the buyer knows that the property is managed and who by. The managing agents never told us that they had given out the keys or asked us first if this is alright.
The property was looking OK when I saw him the buyer's surveyor there yesterday measuring up the floorspace in each flat. He hinted that the buyer might want to sell the flats in the property so perhaps that is an encouraging sign.

youth_leader

Best wishes to you.  I sold through traditional auction and my buyer asked for eight weeks to completion as he was getting a mortgage and had to pass it 'in front of his underwriters'.  I understand your annoyance about the surveyor, prior to auction the agent had given a surveyor my keys and he was in my house without supervision. I still had some of my possessions there.

eddddy

MidasInReverse said:

In reply to those who have answered, this was a traditional auction as far as I know. The deposit was 10 per cent and is being held by the auctioneers. I believe that the completion date is set out in the sale contract as 21 May. The solicitor has also mentioned to us that interest is payable at 8.25% on the balance of the sale price from the day after completion. I hope that this interest is payable by the buyer, not us, for each day that completion is delayed. 
The solicitor has heard nothing from the buyer's solicitor and had sent him the legal pack on 15th April so he chased him yesterday.
I can't believe that the buyer would surrender his deposit to us voluntarily or that they would want to pay interest as ell, although they are mega rich, owning and renting properties all over London.
To answer anselld, the buyer knows that the property is managed and who by. The managing agents never told us that they had given out the keys or asked us first if this is alright.
The property was looking OK when I saw him the buyer's surveyor there yesterday measuring up the floorspace in each flat. He hinted that the buyer might want to sell the flats in the property so perhaps that is an encouraging sign.

So it doesn't sound like there's any reason to be worried.



If the buyer is late completing, it will almost certainly be them that pays interest - not you.

But if the property price is £100k, the interest at 8.25% pa would be about £22 per day...
if the property price is £200k, the interest would be about £44 per day...
etc

So the interest won't make much difference, if completion is a bit late.

saajan_12

MidasInReverse said:

We sold a property at auction and under the contract completion is due in one week's time. His solicitor was sent the legal pack one month ago. However he has failed to respond to our solicitor on it so it appears that the buyer is dragging his feet about completing or has instructed his solicitor to delay responding.

Well what would he need to respond with? Does your solicitor know its an auction, so there wouldn't be the usual enquiries? 

MidasInReverse said:

I don't understand why he would delay as we might have the right to terminate the contract he might have to surrender his 10 per cent deposit to us. The auctioneers have told us that interest might be payable too on the balance of the purchase.
Is that interest payable by the buyer from the day after completion if he fails to complete as I was worried that the interest might be for us to pay. However, that doesn't sound right as we've done nothing to delay the completion of the purchase.

Yes you'd claim interest from the buyer on the money they havent paid you on the due date (ie completion). 

MidasInReverse said:

Another odd thing. The propsepctive buyer sent a surveyor round to the property today to measure up all the rooms. The surveyor had colelcted the keys from our managing agent and we knew nothing about this until after the event. Is the prospective buyer allowed to do this?

Yes they're allowed to request a viewing (in this case for a survey but it doesnt' matter why). You can agree or decline, but it seems your (managing) agent agreed. If they weren't supposed to, then thats between you and your managing agent.