This blog looks at dealing with delayed completion – whether you are a buyer or a seller. It provides 16 super-effective tips, steps or strategies every house buyer and seller should know about delayed completion.
The completion date is the day the buyer of a property legally has to pay over the purchase price, or the balance of purchase price.
The buyer is then entitled to the keys and can move in. The seller must move out or give “vacant possession” – allowing the buyer to occupy the property.
If completion is delayed, there can be a lot of annoyance, inconvenience, and distress – as well as extra or wasted legal and other costs. There can also be serious contractual implications for the buyer or seller at fault for the delay.
This blog is in two parts:
♦DELAYED COMPLETION IF YOU ARE THE SELLER
♦DELAYED COMPLETION IF YOU ARE THE BUYER
Remember that a seller will be dealing with a buyer and a buyer with a seller. Therefore, whether you are a seller or a buyer, both parts of this blog will be relevant to you.
♦DELAYED COMPLETION IF YOUR ARE THE SELLER
If you are the seller, the following tips, steps or strategies will apply to you:
1 Talk to your conveyancer at the first sign of delay
As soon as it becomes apparent to you that there is a chance your sale could be delayed speak to your conveyancer.
As a seller, matters which could lead to you causing a delay of completion include:
- Someone at the property will not leave – that could be a joint owner, spouse, partner or tenant
- The sale proceeds will not be enough to pay off the mortgage or mortgages on the property.
You may be unable to complete on time on the day of completion because you:
- Have not left the keys with the estate agents
- Cannot get the keys to the estate agents on time
- The property is rented and a tenant who promised they would leave has not done so
- You have another conveyancing transaction which is being held up.
As soon as you realise there is a possible problem, speak to your conveyancer. That will enable them to consider the legal options and advise you on the best way forward.
If you end up causing a delay in completion, you could face adverse legal and financial consequences. You want to avoid both if at all possible.
2 Raise potential problems with the estate agent
When you sell, you will be paying a chunky commission to the estate agent and so you should expect them to help you out with any difficulty.
As soon as you feel there is a chance that the completion could be delayed because of your actions or omissions, speak to your selling agent. Thereafter, comply with the advice and assistance they give you to prevent the completion being delayed.
One obvious thing they can do is to speak to the buyer, broaching possible difficulties, keeping them on board.
3 Warn the buyer of possible hold-ups
You can also speak to your buyer if you have reason to believe completion could be delayed because of something to do with you.
However, you should only do this if you are on good terms with the buyer or you are confident that their response will be favourable.
If you are unsure of the buyer’s response, or fear it could be unfavourable, don’t approach the buyer. Leave it to the estate agent instead.
They are skilled in dealing with buyers and overcoming possible problems or issues.
4 Speak to your conveyancer first thing on the day of completion
It is good practice to ring your conveyancer first thing on the morning of completion and check that everything is on track for completion.
Conveyancers are typically extremely busy and it is normal for a conveyancer to be handling several completions on the same day, usually a Friday – which is a particularly hectic day for conveyancers.
It is very easy for a conveyancer to overlook a completion because of the pressure of work. By ringing in first thing on the morning of completion, you can ensure that your matter will not be overlooked or delayed.
Deal with any problem promptly
If a problem is identified which requires your attention, deal with it promptly.
Once you have spoken to your conveyancer first thing in the morning, don’t just leave it at that. Check with them an hour or two later to make sure that everything is going according to plan.
If not, you should speak to the estate agent and, if necessary, the buyer to sort out any issue or difficulty which is within your power to resolve.
You may be tempted to think that you can leave everything to your conveyancer because you are paying them . But that may not be in your best interests.
It is advisable to keep in touch with all the parties on the completion date, doing what you can to ensure that everything goes smoothly.
5 Help to make the completion happen on time
If the worse happens and completion is delayed, there may be things that you can do to help the situation – depending on:
- When it happens
- The nature of the delay.
Delay on the day of completion
The most common reason for delays on the day of completion is probably the late or non-arrival of mortgage funds from the buyer’s lender.
Before the buyer’s conveyancer can pay over the purchase price to the seller’s conveyancer, they need to receive any mortgage funds from the buyer’s mortgage lender.
Often the buyer’s conveyancer will be informed that the mortgage advance has been sent but, on checking, the money is not in their bank account.
It can take a few hours for money to go from one bank account to the other. The buyer’s conveyancer cannot authorise the sending of any money to the seller’s conveyancer until the mortgage funds are definitely in their bank account.
Late arrival of mortgage fund
The contract normally provides for the purchase funds to be received by the seller’s conveyancer by a certain deadline time – often between 1 pm and 3 pm.
If the buyer’s conveyancer does not receive funds or gets funds too late to send off in time for the deadline, completion cannot take place on the intended date. Therefore, the parties will have to try again on the next working day.
The problem is often made worse by the fact that completion is normally on a Friday with a weekend before the next working day.
Completion can also be delayed on the day of completion because of fault on your part – something you should be careful to avoid.
WHAT YOU CAN DO TO HELP
A few days before the completion date, you should check with your conveyancer and your estate agent that everything is ready for completion.
If you are asked to provide any information or sign any document, make sure that you do so promptly and respond within any time scale given.
For instance, you may have been asked to sign a Transfer, Lease or Conveyance and return it to your conveyancer. If so, act on their request fast and on time.
Usually, a conveyancer will not be able to complete if they have asked you for a legal document and it is not in their possession on the completion date.
If you are holding the keys to the property, endeavour to hand them over to the estate agent at least one day before the planned completion.
If you leave it until the date of completion, you could be held up unavoidably on the day and unable to get the keys to the agent on time.
Something else which can delay completion is failing to give “vacant possession” by leaving rubbish, furniture or goods at the property.
Long-term delay in completing
Long-term delay in completing a sale happens when there is a major problem and not just something temporary – such as the mortgage funds arriving a day or two late.
Examples of something major which could end up causing long-term delay or even stop completion from happening altogether include:
- There is someone in the property who won’t leave
- You are a joint owner and are in dispute with the other joint owner
- In the contract for sale, you agreed to do something before completion and you have not done it.
Avoid long-term delay beyond your control
Long-term delay is serious and should be avoided if at all possible.
In particular, you should not exchange contracts if there is a serious risk of long-term delay which you are unable to remove.
Long-term delay could easily lead to completion not taking place at all – with you being in breach of contract as a result.
An example of a serious risk of a long-term delay in completion is if you are in negative equity – the amount you owe to your lender being more than the price you are selling for.
You may be tempted to exchange contracts – confident that you can obtain the additional amount needed to pay off the mortgage. However, if you don’t, you may have to delay completion and you may even end up not being able to complete at all.
WHAT YOU CAN DO TO HELP
Before contracts are entered into, tell your conveyancer about any problem or issue which could delay or stop completion.
Your conveyancer can then consider the legal implications and work out what you need to do to ensure a smooth completion.
In some cases, you will be advised not to enter contracts at that point and wait until problems and issues can be sorted out.
The knock-on impact of a delay in completion
A major problem with a delayed completion is the knock-on effect on any related sale or purchase.
If you are selling or buying a property and your sale or purchase is dependent on another sale or purchase, you will be involved in a conveyancing or sale/purchase “chain”.
A chain can be very large, with several related transactions. The more links in a chain, the more likely it is to break.
One transaction failing or aborting could end up causing several others to fail – with widespread recrimination, loss of goodwill and wasted legal costs.
Delayed completion can lead to a costly break in a chain.
WHAT YOU CAN DO TO HELP
You can minimise the impact of a broken conveyancing chain by avoiding a chain whenever possible.
One way of doing that is to sell to a first-time buyer and, if you are buying, buy from someone who is not also buying.
If you are unable to achieve a chain-free sale, prefer the smallest possible chain when you have a choice.
6 Identify your contractual rights and obligations
Have a look at the contract of sale and speak to your conveyancer if you have any questions about your legal rights in the event of late completion.
If completion is late because of the buyer’s fault, you will normally have the right to:
- Serve a notice on the buyer (a “Completion Notice”) to complete within a certain number of days, usually 10, failing which you will be able to end the contract.
- Claim compensation as provided for in the contract.
The buyer will need to pay the legal costs of your conveyancer, who will draft the notice.
Pending the expiry of the notice, you can:
- Complete as soon as the buyer is ready to do so, charging interest for the late completion at the rate set out in the contract or
- Complete as soon as the buyer is ready to do so, forgoing the right to charge interest.
Of course, if the late completion is because of your fault, you will need to look at the rights and remedies available to the buyer.
7 Rely on your contractual rights
If the buyer does not complete before the expiry of the Completion Notice, you will have the rights set out in the contract of sale. Those rights usually enable you to:
- Forfeit and keep any deposit plus interest
- Sell the property to someone else
- Claim damages or compensation for your losses.
Of course, you do not have to rely on your rights.
There may be reasons why you would be willing or would prefer to sell to your buyer, even though they are unable to complete before the Completion Notice expires.
In such a situation, the buyer will be very much at your mercy. You can drive a hard bargain in return for completing with them.
Do you know how to cut down the chances of things going wrong when you are selling your home? Learn more: Steps to Take When Selling Your Home (how to make things go smoothly when selling)
8 Take court proceedings against the buyer
Where completion is late, your ultimate remedy will be to sue the buyer for breach of contract.
That could incur legal costs – and could prove expensive.
Your conveyancer may be able to assist you on a no-win-no-fee basis in terms of the litigation necessary. If not, you may be able to find other solicitors who can act for you on a no-win-no-fee basis.
Ideally, you will want to avoid court proceedings if at all possible. They can be expensive and the outcome of proceedings can never be guaranteed, no matter how strong your case.
NOTE: Quite often when you are selling a property, you will also be buying one. If you are buying, the tips below relating to buyers will apply to you.
♦DELAYED COMPLETION IF YOUR ARE THE BUYER
If you are the buyer, the following tips, steps or strategies will apply to you:
1 Contact your conveyancer if you see a possibility of late completion
As soon as you feel there is a danger that your purchase will not complete on time, or at all, speak to your conveyancer.
The things which typically can cause a hold up on your side include:
- You may be late in paying over the balance of purchase price to your conveyancer
- Your mortgage could arrive too late to enable completion on time
- Your mortgage could be withdrawn at the last moment, requiring you to get another mortgage
- You could be buying the property with someone else and you fall out and decide not to proceed.
- You could be selling as well as buying and there is a delay with your sale which is beyond your control.
Discuss with your conveyancer what can be done to remove or shorten any expected delay.
If the delay is due to the seller, speak to them and/or the estate agent to see what options are available.
2 Speak to the estate agent if there is a hint of delay
As well as speaking to your conveyancer about any possible delay in completing on your part, speak to the estate agent.
The estate agent may be able to smooth over any possible concern of the seller.
If the possible delay is due to the seller, you may be able to secure some sort of concession or benefit from the seller in return.
3 Keep the seller in the loop
If you have the contact details of the seller, you can contact them in advance if you believe that completion could be delayed.
This personal approach may get you on the good side of the seller. It may prevent things from becoming too argumentative or hostile in the event of a delay.
Where the seller approaches you about a possible delay, consider whether you can secure any concession in return for your inconvenience or loss.
4 Double-check everything with your lawyer before completion
Shortly before the date fixed for completion, check with your conveyancer that everything is in place for completion. That should minimise the risk of delay.
If you have been asked to pay over an amount to enable completion to take place, ensure that you do so in good time. That will ensure that your conveyancer has cleared funds no later than the day before completion.
If you fail to pay money asked for by your conveyancer, they are extremely unlikely to complete.
On the day of completion, first thing in the morning, ring your conveyancer and double-check that everything is on for completion.
It may seem shocking, but sometimes a very busy conveyancer can overlook a completion. By ringing in and asking if everything is in place, you will reduce the possibility of that happening.
It’s a good idea to also ring the estate agent checking that they have the keys, and any alarm codes, enabling you to move in without difficulty.
5 Take action to avoid a delayed completion
If you know there is a risk the completion could be delayed, speak to your conveyancer and the estate agent.
Usually, a delay will benefit neither side . Therefore, it is desirable for both buyer and seller, and their professional advisors, to work towards resolving any delay.
As a buyer, things which may cause a delay on your part include:
- Your mortgage funds are not enough to complete
- You are asked to pay an amount by your conveyancer to enable completion and you fail to do so
- You are asked to sign legal documents by your conveyancer and you fail to do so on time
See also the possible causes of delay listed in paragraph 1 above.
Things that can cause delay on the part of the seller
Things which can cause delay on the part of your seller include:
- There are joint owners and there is a dispute between them
- Someone in the property is refusing to go, meaning that you cannot move in
- The seller does not have enough money to pay off a mortgage on the property.
Whether or not you can do anything to stop a potential delay, or even an abortion of the transaction, will depend on the circumstances.
Sometimes there is nothing that can be done to stop completion from being delayed.
The delay could be very short – a day or two – or it could be quite long.
Sometimes completion is not possible at all and the transaction has to be aborted or terminated.
Did you know you can actually make large property profits from a delayed completion? Find out how by reading the following blog on a little known property strategy: Delayed Completion (how to make money by deliberately delaying completion)
6 Check your contractual rights and obligations
Look at the contract of sale for the legal consequences where there is a delay in completion caused by you.
The completion date is normally a week or two after contracts are exchanged and is set out in the contracts.
The time by which completion must take place is normally between 1 pm and 3 pm.
Read your contract and speak to your conveyancer to find out what your rights, remedies and obligations are.
In the “standard conditions of sale” of a typical contract, read the provisions under the most relevant headings including:
- Notice to complete
- Late completion
- Buyer’s failure to comply with notice to complete
- Seller’s failure to comply with notice to complete.
7 Exercise your legal rights on a late completion
You can serve a Completion Notice when the seller does not complete on time. This will require the seller to complete within a set period – normally 10 working days.
You are free to complete with the seller within the set period. However, you will be able to claim any compensation allowed in the contract.
If the seller fails to complete before the expiry of the Completion Notice, you may be able to compel the seller to complete by court proceedings – relying on the remedy of “specific performance”.
Alternatively, you can rescind the contract and ask for your deposit back, with interest.
You may also be entitled to compensation for your losses, depending on what the contract says.
8 Take the seller to court
If the seller fails to comply with the contractual provisions, you can take them to court and seek a court order plus compensation.
However, court proceedings can be expensive, time-consuming and uncertain in outcome.
If you do end up in a delayed completion situation, the most sensible thing usually is to reach an agreement with the seller. This will avoid the need for litigation.
If you do go to court and win, you may be able to recover the legal fees you pay to your lawyer.
You may be able to find no-win-no-fee lawyers willing to take on your case. That means you would only be obliged to pay them if you win your case.
What to do about delayed completion is a question asked by many buyers and sellers. If you are faced with the problem, the best thing is to seek advice from your conveyancer.
However, before that, you can take a close look at the contract for sale. Look in particular at the headings in the conditions of sale dealing with: COMPLETION and REMEDIES.
Have you been involved in a delayed completion when buying a property? What went wrong and how was it solved?
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About the author
London-based blogger Dalton Barrett has over 30 years experience as a property lawyer, investor and coach. Read about his unconventional worldview of property here
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Rebel Property Coach
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