• Careers
  • Contact Us

Selling Your House? How to Avoid a Completion Day Nightmare

on Wednesday, 10 October 2018.

Thousands of houses are sold and bought every year without any difficulty. But sometimes, things go wrong.

For example, the buyer can fail to complete, with very stressful consequences on both the buyer and the seller. The seller, in turn, may not be able to complete on their related purchase. This means their belongings can be stuck in a removal van many miles away and they and the buyer may have to go into a hotel pending the problem being resolved.

What Is The Legal Position if Completion is Delayed by the Buyer?

Most home sales are governed by the Law Society's Standard Conditions of Sale. If you are selling your house and the buyer is not able to transfer the full purchase price on time, they are in breach of contract. Your first remedy is to charge interest on the outstanding money at 4% above base rate. You can also claim damages, including cancelled removal expenses and extra legal fees. You can also serve a "notice to complete" which means that if completion has not taken place after 10 working days, you can forfeit the deposit paid by the buyer, terminate the contract and take court action for any other losses.

Clearly, this is a situation that should be avoided if possible. How can you minimise the risk?

  • Don't rush into an exchange of contracts and commit to a completion date until you know that there are no impediments to completion.
  • Make sure a 5-10% deposit is paid by the buyer on exchange of contracts.
  • Don't get pressured into agreeing a completion date that is too quick. It takes time to deal with the various legal requirements that take place between exchange of contracts and completion.
  • Give sufficient notice to your mortgage lender to send the money to your solicitor. They will not send it unless all their requirements have been dealt with.

For more information, please contact David Marsden in our Commercial Property team on 01923 919 303.

Leave a comment

You are commenting as guest.