Completion and moving out
Your buyer should be entitled to reasonable access to the property between exchange and completion to allow for plans to be made and measurements to be taken.
Note of warning: do not allow the buyer to have a set of keys until completion has taken place.
You must be informed by your conveyancer that the money has actually been transferred to a designated account before releasing the keys. This can take time while the money is transferred from one account to another even in these days of electronic banking. If you have already vacated your property, leave a set of keys with your estate agent, with precise instructions on how and when to hand them over. Completion can only take place on Mondays to Fridays and not on bank holidays.
Failure to complete
(1) Failure to complete the formal documentation does not necessarily invalidate the purchase. Two students jointly purchased a property when they separated the following year the man bought out the woman’s share for £1,400. The transfer of the mortgage was never formalized and the woman subsequently refused to sign a draft conveyance. When the property was repossessed and sold some years later, the woman claimed a share of the proceeds of sale. The court held that failure to complete the formalities of the buyout did not negate the deal. It would be a miscarriage of justice if, as a result of the deal, the woman became entitled to a half share. She had disposed of her interest and the sale was enforceable.
(2) If your buyer fails to complete on time, there is generally a clause in the contract of sale which entitles you to interest on the late payment.
(3) If your buyer fails to complete at all, you are entitled to keep the deposit. There are also other legal remedies which might be available to compensate you for breach of contract depending on the contract’s terms.
You have a house which has been on the market for some time. You have found a buyer who has exchanged contracts with you. On the strength of the intended completion in four weeks from the date of exchange, you have made plans to move out of the area. Now you are informed that the buyer cannot complete and your plans are in disarray. Depending on the contract, you might be able to get an order for specific performance [i.e. an order that the buyer must complete the transaction if he is in a position to complete but has simply refused to do so. However, there would be no point in such an order if the buyer has not got the funds to complete the purchase. You would have to try to sell your property at the highest possible price obtainable in a hurry. If you then had to drop your price, you might be able to sue the first buyer for damages for the difference between the price he promised you and the price you subsequently obtained. You could also obtain damages for distress and inconvenience because of the disruption to your plans, although these might be fairly nominal only.
Note: if the seller fails to complete, equally he or she becomes liable for breach of contract. The same remedies might then be available to the buyer against the seller: i.e. suing for damages and/or specific performance. The buyer would also be entitled to return of the deposit as a matter of course.
Proposed changes — extension of a seller’s obligations
the government proposes to bring in new measures to speed up the process of home buying. The proposals include a ‘seller’s pack’ which a seller will have to provide — at his or her own expense to a would-be purchaser. The pack would include such matters as a survey, searches, a valuation, and details of fixtures and fittings. The pack would be prepared before the house is first advertised for sale. Trials have been carried out in Bristol and have proved to be successful in reducing the time it takes to sell a property. A house has changed hands in four and a half weeks under the home sellers’ information pack scheme. The average time is eight weeks. The Department of the Environment, Transport and The Regions has set up a help desk to deal with inquiries about the proposed reforms: 020 7890 3044; Fax: 020 7890 3408.