Sadly, with the complexities of life and property transactions, and the fact that there is often a chain involved when buying and selling properties, one small hiccup can have consequences for everyone in that chain.
Delayed completion happens when the buyer and seller agree on a price and exchange contracts, but the final completion of the sale is postponed, potentially for years.
There are many reasons that a property completion can be delayed:
- it could be that funds were not received from the mortgage provider in time;
- it could be that a buyer or seller was unable to action something as quickly as may otherwise have been envisaged;
- it might be something as seemingly innocuous as a removal van turning up late to clear items from the property to enable vacant possession to be given in time for the agreed completion date; or
- it could even be something as outrageous as a buyer demanding a discount to complete after exchange of contracts (yes, this has happened!).
Whatever the cause, by the time of the exchange of contracts, a buyer and seller will have agreed a time and date by when funds need to be transferred to complete the purchase. A failure to comply with that contractual term is a breach of contract.
What is the effect of this delayed completion date?
This means, for example, that a buyer towards the bottom of a chain who has remitted funds to their solicitor an hour too late, cannot complete until later than envisaged, leading to a delayed completion date. The next person up the chain cannot complete their purchase because they need the funds from the person below them in the chain, and they are buying their property in order to complete on their purchase, and so on.
By way of example:
Ms Scarlett is buying Professor Plum‘s property. In this transaction, both the buyer and the seller play crucial roles, with solicitors for both parties exchanging signed contracts and facilitating the payment of the deposit, marking the agreement as legally binding. But Ms Scarlett remits funds to Professor Plum late.
Professor Plum needs those funds from Ms Scarlett to purchase a property from Reverend Green and cannot complete until he has the funds. He then delays in completing his purchase with Reverend Green.
Because Reverend Green needs the money from the sale of his property to Professor Plum, he cannot complete his purchase of the property from Dr Black.
This will continue right up the chain and the losses that people incur can include additional storage costs or moving costs and hotel and accommodation expenses, for example. However, it does not end there.
Because of the legal principle of privity of contract, only the parties to a contract have the right to pursue each other. This means Dr Black cannot seek her losses from Ms Scarlett. Dr Black can only pursue Reverend Green for the delay, because they have a contract together.
Reverend Green would then have to include the claim against him in addition to his actual losses, such as additional storage charges, in his claim against Professor Plum. Professor Plum would then have to include Reverend Green and Dr Black‘s claims against him in his claim against Ms Scarlett, who was the person who caused the delay – all the way up the chain.
What can be claimed in a property transaction?
Most property transactions take place pursuant to standard terms and conditions. We have focussed on the standard residential, as opposed to commercial, conditions of sale.
Under the standard conditions of sale, an aggrieved seller is entitled to claim interest at the rate specified in the contract on the agreed purchase price, less any deposit paid, until completion takes place.
If that compensation is greater than the actual loss suffered (e.g. the interest is greater than the additional storage costs and any claim against them by their seller) then this is the most that can be claimed.
If the compensation is less than the actual loss suffered (e.g. the interest is less than additional storage costs and a claim being pursued against them by their seller) then the balance can be pursued.
It’s all a bit complicated, isn’t it? Understanding a property transaction
Solicitors don’t make the law, they simply seek to apply it to the facts of any case, and lenders are under no legal obligation to offer an extension for a mortgage offer. The reason why the principle of privity of contract exists is because the law has developed to say that, except in certain and very limited circumstances, only the parties to a contract should be allowed to enforce their rights or be pursued by the other contracting party for failing to perform them.
In property transactions, while sellers are committed to the exchange after a deal, lenders are under no legal obligation to extend mortgage offers if completion is delayed, potentially putting purchasers at a disadvantage.
Sadly it does get a little fiddly, and what happens in these circumstances depends on a number of facts.
So what do I do if there has been a delayed completion date? Your delayed completion strategy
There are some practical considerations to take account of but they will depend on the circumstances of any case.
For example, some parties may be willing to simply accept the loss, as they do not want the aggravation of pursuing a claim. Also, where you are in the chain may make a difference to what you do. The lower down the chain you are, the greater the potential that the claim against you would be larger.
An ‘exchange with delayed completion’ is a strategy where contracts are exchanged but completion is postponed to a later date. This can be due to mutual agreement or unforeseen circumstances and is often used by property investors to secure properties while awaiting factors like planning permission. It is crucial to have an experienced property solicitor to manage the complexities of this approach.
If you are the buyer at the bottom of the chain (like Ms Scarlett) who, directly or indirectly caused the delay, you are probably best placed to agree a settlement with your seller (in our example, Professor Plum) as soon as possible. If the terms of that agreement are sufficient to do so (and careful wording should be considered) then it may be possible to exclude all future claims.
This would mean that if the buyer at the bottom of the chain (Ms Scarlett) settles the claim with the person above them (Professor Plum), then they cannot be pursued further. If the person at the top of the chain (Dr Black) has not yet put his or her claim to their buyer (Reverend Green), then it may be some time before it works its way down the chain and it would stop at the person above you, because you have contractually agreed with them not to be pursued further.
If you are at the top of the chain (like Dr Black), you have the luxury of being able to decide whether or not to pursue a claim. For you, the losses may not be particularly high, as you do not have to worry about people above you bringing their claims.
If you are somewhere in the middle of the chain (like Reverend Green or Professor Plum), then the action you take may be dictated by the action taken by the person above you in the chain. As the losses tend to grow the further down the chain you are as the claims compound, generally the lower down the chain you are, the greater the risk that someone above you might want to claim their losses.
For all but the person at the top of the chain (Dr Black), agreeing a swift settlement with the person above you is probably the best way to complete your property transaction fast. This might be difficult, as the person above you might be waiting to see if the person above them intends to make a claim.
How can Cunningtons solicitors help?
We can assist in defending and bringing claims for breach of contract based on delayed completion.
However, much of the time, the value of the claim is comparatively low. This generally means that reclaiming your legal costs is not an option. We can generally offer fixed fees or fee caps for providing advice and liaising with the parties. Have a look at our Funding Your Claim page.
Please feel free to contact us if you would like our help.
It is also crucial to keep your estate agent informed about any potential delays in completion, as they play a key role in facilitating the exchange of contracts and the transfer of keys upon legal completion.
Points to remember
In terms of important things to remember:
• If it was you who caused the delay (whether or not it was your fault), try and settle the matter with the person above you as soon as possible and absolutely conclusively, so no further claims can find their way down the chain to you.
• If you are somewhere in the middle of the chain, don’t settle too early with the person below you. You want to be certain that the person above you is not going to pursue a claim against you before you agree to compromise your right to include their claim against your buyer.
• If you are at the top of the chain, you can pursue your claim at your leisure but be aware that the person below you in the chain is going to be reluctant to pay you your claim until they have received the same sum from their seller.
Contact your local conveyancing solicitors
Find out more about our specialist property solicitors in Braintree, Brighton, Chelmsford, Croydon, Hornchurch, Solihull, and Wickford.
Frequently Asked Questions
As you can see, buying and selling property is not always as simple as you think. We’ve tried to address some common questions below, but if you are still unsure please feel free to contact us for an answer.
Can I get compensation for delayed completion?
Yes. It will be a contractual term of the contract as to when completion takes place. It is therefore a breach of contract if it does not. Normally the contract will provide a remedy and say who pays what in the event of a delayed completion. This is normally interest on the sum paid and any reasonable expenses incurred (such as temporary accommodation or subsistence).
Is there a penalty for late completion?
No, there is not a “penalty” for late completion. “Penalty clauses” are a specific thing in law and are generally unenforceable. However, the contract will normally specify a financial remedy for the aggrieved party. If not, a claim for damages based on normal contractual principles relating to a breach of contract would apply. This is that losses which are reasonably foreseeable at the time of exchange of contracts can be claimed.
What happens if completion is delayed by buyer?
If it is solely the buyer’s fault that there is a delay, normally, the first thing the seller will do is serve a notice to complete. If that notice period expires, it then gives the seller the option to rescind (i.e. withdraw) from the contract and keep the deposit. In addition, the contract will normally say that the seller is entitled to claim their reasonable losses and interest calculated by reference to the purchase price, less any deposit paid until completion takes place or the contract is rescinded.
What happens if completion is delayed by seller?
If it is solely the seller’s fault that there is a delay, normally, the first thing the buyer will do is serve a notice to complete. If that notice period expires, it then gives the buyer the option to rescind (i.e. withdraw) from the contract and get back the deposit paid with accrued interest. In addition, the contract will normally say that the seller is entitled to claim their reasonable losses and interest calculated by reference to the purchase price, less any deposit paid until completion takes place or the contract is rescinded.
The buyer is delaying exchange of contracts. What can I do?
This will depend on the circumstances. Whilst serving a notice to complete on the seller is generally the first thing that can and probably should be done, it is a fairly unpleasant thing to do and can cause contention. Asking you solicitor to speak to the buyer’s solicitors and find out what is happening and the cause of the delay is worthwhile doing, as it might influence your decision.
Why is my solicitor not releasing funds after my house sale?
The basic position is that a solicitor should release funds to their client as soon as possible but there could be any number of reasons for not doing so. For example, the proceeds of sale might belong to the estate of a deceased seller, and the estate is yet to be finalised and distributed. It might be that there is a dispute between co-owners about the funds and who should get what, in which case the solicitor might have received conflicting instructions as to which of their clients receive what proportion of the proceeds of sale. It could be that a retention of some sort was agreed for something. This is not uncommon in leasehold property where service and other charges by the landlord are not certain at the point of completion, so the parties might agree that a certain sum be held back in one of the solicitor’s account until that figure is clear, at which point it can be sent to the seller after deduction of any such charges.
What can hold up the exchange of contracts?
Lots of things can hold up the exchange of contracts. The basic position is that the buyer will want to be satisfied as to what they are buying, so they will tend to ask questions and make enquiries of the seller. These do take time to respond to. The parties might be relying on third parties for something. For example, a mortgage lender to confirm that they are prepared to proceed further, the results of a formal search about the property which has yet to be sent back to the buyer, a variation of a particular lease term in a leasehold transaction. There is sadly no shortage of things that can happen and whilst the seller will generally be keen to proceed, especially if they have a linked transaction, the buyer will not exchange contracts until they are certain that they want to buy the property and are able to proceed.
What happens on remortgage completion day?
The solicitor would confirm to their mortgage lender client that the property has a good title to lend against by sending what is called a certificate of title (although this generally happens in advance of completion), the funds will then be remitted to the solicitor, who will also generally lodge an application at the Land Registry to register a charge against the title to the property and then the funds would be remitted to the solicitor’s client after payment of their legal charges.
Will my solicitor tell me when we exchange contracts?
Absolutely. In fact it is important to agree dates for exchange of contracts and completion with all parties, as a lot of the time, they are in a chain and will have linked transactions. For example, a buyer might also be selling a property in order to fund their purchase of your property, and you might be selling your property in order to purchase a new one.
Why do solicitors take so long to exchange contracts?
This is a subjective question but ultimately, exchange of contracts will only take place once the buyer is satisfied that they are happy to proceed and a seller is ready to do so.
Hi,
Great article, thanks. We purchased a house in England during the Stamp Duty Holiday in 2021. We had an offer accepted in April, and emails between solicitors of both parties point to a verbally agreed completion date towards the end of May. The vendor then stopped responding to their solicitor, estate agent etc leaving us all stumped. Eventually the vendor’s solicitor advised an updated completion date proposal of 22nd June. We accepted this but asked for provisions to be made relating to further delays and agreeing who would be liable for increased stamp duty fees. Long story short, we ended up completing in September 2021, with an additional £12,500 stamp duty to pay.
Is there any scope for us to either A) apply to HMRC for a (partial) refund or B) submit a claim against the vendor?
Thank you for your comment.
We are sorry to hear of your circumstances but in reality, until contracts are exchanged with an agreed date for completion, there is no contractual liability to any of the parties. Up until exchange of contracts, either party is at liberty to withdraw or change the terms of the proposed sale. Put another way, there is probably very little prospect of you having a claim against the seller. If there was to be an increased financial liability to you as a result of any circumstances, it would really be for you to try to renegotiate the terms of any contract to take account of this, but the seller would not be obliged to agree to that.
Hi ,
I almost bought a 2 bedroom flat which had so many delays from the property management firm initially. The seller solicitors had difficulty getting service charge summary , fire risk assessment etc from them . I had my mortgage offer expire in August 26th 2023. The mortgage broker who works for the agents who manages the property for the seller was able to get a mortgage extension that ends October 2023 .
Only for my solicitor to call me on the 12th of October that every other thing has been done , but the current tenant of the property has till November to move out and they have not moved out . The property needs to be free and my solicitor says she needs 5 days to draw down the mortgage from my lender and she said this is not going to be possible considering the deadline.
I would like to know if I can get refund of money paid to the solicitor etc / refunds for wasting my time .
The eviction notice given to the tenant could have been earlier , it was just given to the tenant sometimes August . This makes me feel the seller /agent which manages the sale / rental of the property set me up for failure by not giving the tenant an earlier eviction since April 2023 after paying all charges .
Could you please advise on what next to do?
Thank you for getting in touch, however from what you have said, it looks like you have not exchanged legally binding contracts with the sellers, and so don’t have any cause of action against the seller or their solicitor where there is now a delay in being able to proceed where the seller has not given notice to their tenant early enough in the process.
If you have in fact entered a legally binding agreement with the seller and their tenant will not vacate now before the Completion date in the Contract, then you may well have a cause of action against the Seller under the Contract. However from your description of events it would seem that an exchange has not taken place. This being so, we appreciate the frustration with the situation you find yourself in, however from the details you have given it looks simply as though the Seller did not give notice to their tenant early enough in the process.
Our advice would be to ensure that if in future you decide to purchase a property which is currently tenanted, you agree with the Seller early in the process the date they will serve notice to evict the tenant.
Hi, Very helpful article. Under offer Jan 23, told cash buyer no chain. Ended up being mortgage and delay after delay exchanged 13 July for completion 26 July. Day before told buyer cannot complete as paid a business bill with the cash funds. Agreed a rent and licence to occupy with delayed completion set for late September. Again, day before buyer cannot complete due to shortage in funds (initially told a small amount). Notice of 10 days to complete issued. 10th day arrives, buyer cannot complete but now the shortfall is 55% of the asking price. Now what are my options? I could rescind sale contract & re-market the property but I’m loathe to do that as market has changed due to high interest rates. Or I let them stay renting and set a new date for exchange/completion when they have all the funds, risky as they have no incentive to act or could even pull out. I am going to lose the house I am buying, am paying to live in an airbnb, storing my possessions and losing out on interest the house price would earn if invested. Can I apply for specific performance order? How long does that take? Or should I renew Notice for 10 more days or 2 months as they have requested. I cant help feeling I’ve been really let down by the agent/ conveyancer. Advice appreciated.
Thank you for your comment.
Unfortunately your query is just too specific that we could realistically provide any advice on our website. We cannot risk providing advice on our website only for someone later to suggest that we provided incorrect advice.
We can, however, provide some general guidance. There is a principle in law that a claimant cannot simply sit back, letting losses accrue, and expect the defendant to meet all of those losses. There is a ‘duty’ on a claimant to mitigate their loss. The word ‘duty’ is in inverted commas because it is less of a requirement and more of an expectation. The result of this means you are going to have to take reasonable steps to mitigate the losses that are accruing to you. By way of very basic example, staying in a 5 star hotel until completion and expecting the buyer to cover the cost of this in any breach of contract claim that might subsequently arise if completion does not then happen is unlikely to be a reasonable step, whereas temporary accommodation at a modest cost would be far more likely to be.
You probably have a number of options, including rescinding the contract or applying for specific performance. You could also agree terms with the buyer, perhaps sufficient that the agreed ‘rent’ or license fee covers your additional outlay. The practicalities of any particular option will depend on the specific circumstances and position of the parties. At a very basic level, if the buyer is in financial difficulties, there will come a point where they cannot afford to pay anything more and they may not have any assets to sell to do so.
Sometimes it is better to cut your losses than risking the position getting worse but we cannot tell you what to do, even if we were formally instructed. We could, however, explore your options and then implement your strategy, minimising risk to you as far as may be possible. What we would say is that your buyer sounds suspicious. We would suggest that before anything further is agreed, you ask for evidence of the buyer’s ability to complete and do not automatically trust promises that are given to you, especially not without supporting evidence.
Do feel free to get in touch if you would like to consider the matter further.
Hi,
I am due to complete the purchase of a property. All the funds for completion are already in my solicitor’s account save for a portion of the stamp duty amount which is delayed (Funds coming from sale of stocks and my broker taking more time than expected to settle cash in my account). It is unlikely the funds for the portion of the stamp duty will clear on time for completion but the rest of the money is more than enough to cover the amount due to the seller and the solicitor’s fees.
Stamp duty is due within 14 days post completion.
Now my solicitor is saying they are unable to complete on my behalf until I wire the full stamp duty amount. Which I don’t understand and the seller’s solicitor does not understand either as the funds for completion are already there
Question is: can I force my solicitor to complete? I offered to give whatever binding undertakings I can to insure them that stamp duty money will be paid to them as soon as possible
Thank you
Thank you for your comment.
It is an unusual situation and probably depends on the terms of the retainer (the contractual agreement) with your solicitor.
In theory, as it is your tax liability, we could envisage a situation where you could instruct your solicitor to complete and you deal with the tax liability yourself.
A solicitor is entitled to protect themselves and can refuse to follow instructions sometimes, so it may be the case that if you provided your solicitor with assurances that you will indemnify them from any and all consequences of them not paying the stamp duty, they might be prepared to proceed.
We are sorry that we do not really have an answer to this question.
Hi
I am a buyer. I purchased a house in modern auction which was based on 56 day’s completion contract. After 9 months the seller (the house belongs to a company) couldn’t provide the documents to the solicitor that they have the right to sell the house. We paid 10,000 pounds fee and also our mortgage is about to expire and we can’t get same offer again as interest rates is rising. I am literally homeless nearly 5 months. Can I claim compensation?
Thank you for your comment.
The law of damages is compensatory in nature. It aims to put the aggrieved party in the position that they would have been in had the wrong not happened. However, there are limitations imposed on what a court can order. If the loss is considered too remote (i.e. they could not be reasonably foreseen) then damages would not be awarded for that. In context and in particular, unless it was known to a seller that the buyer would be incurring temporary accommodation costs if the transaction did not proceed, then there is a question about whether such costs would be recoverable.
However, clearly deposits and arguably sums incurred pursuant to the contract are likely to be recoverable. If someone is selling a property, we consider that there is an implied representation that they have the right to do so.
Further, whilst the seller is not under an obligation to provide any particular information about a property to a buyer, there is some newer case law which suggests that a seller is obliged to provide information in relation to title defects.
You may therefore have a basis of claim in misrepresentation or breach of contract (depending on whether or not a contract has been entered into). Do feel free to get in touch if you would like to explore the matter in more detail.
Hi There
I reserved a property in 2021, with completion being that of Spring 2022, dates have kept on changing being no fault on to me though that of the developer. I have had 3 mortgage offers expire over the course of time and each time I have to source a new deal due to interest rate. In January 2023, i was told completion will be April, which kept moving each month and until to date we have not completed.
The mortgage offers i secured in January has now expired and am having to secure a new deal that will cost me £8000 more over the two-year fixed period. I had asked the developer for a new selling price to be factored in and reduced to cover me that £8k and they have down right refused. Stating the delays has caused the project a loss. I had served notice to my landlord and now living in a serviced apartment and all belongings in storage – they have not communicated any completion date – even though we are almost complete awaiting certificates. Contracts have not been exchanged, would i be entitled to some form of compensation or them covering the temp accommodation
Thank you for your comment.
When purchasing off-plan property it is often the case that a developer will include a clause enabling them to complete at a point in the future once the building is substantially built and ready to be lived in, but subject to snagging issues being addressed. Your comment therefore relates to a purely contractual argument over the extent to which there is an obligation on the developer to complete at any particular point in time. We would therefore need to consider the terms and conditions in a lot of detail.
If you would like to instruct this firm to look into the matter for you, please do feel free to get in touch.
Hi.
We accepted an offer on our property 7 months ago. The buyers have been messing about and have just pulled out. We have bought another property and moved out and today the buyers have pulled out.
7 months mortgage and legal fees ??
Please can you give me an idea of where we stand. Thankyou.
Thank you for contacting us.
The situation largely depends on whether or not you had exchanged legally binding contracts with the buyers before this. From what you have said it appears you may not have exchanged with your buyers, and in that situation under the English conveyancing system, either party can withdraw from an agreed sale right up to the point of exchange of Contracts without penalty. If you had exchanged contracts with your buyer then there would be contractual remedies available to you.
You should discuss with your current conveyancers the implications and your options. We hope you manage to resolve your problem to your satisfaction.
Hi!
I am a buyer, who put in an offer 6 months ago on the understanding of a speedy sale – but the lease renewal that was to go through with the sale is taking ages. The management company and the vendor did not have this in place before the property went up for sale.
In 6 weeks time I will have nowhere to live and all of my belongings are in a costly storage, plus I’m having to pay TWICE for removal companies – is this something I can look into claiming for?
Thanks!
Thank you for your comment.
We are sorry to say that sadly, there probably is little that you can do about the situation.
If you have not exchanged contracts, there is not contractual liability between the parties.
You should probably speak with your solicitor about what can be done. For example, if the lease is short, a seller can sell a property and assign the benefit of the Section 42 Notice served pursuant to the Leasehold Reform, Housing and Urban Development Act 1993. This is the notice to the landlord of the tenant’s statutory right to extend the lease. This right can be passed to the buyer. The buyer will not want to pay for this, however, so some agreement in this respect needs to be reached, normally by way of discount to the purchase price.
Extending a lease is complicated. Your solicitor should be consulted about this before any decisions are made.
Hi,
I’m the buyer – completion was delayed as my solicitor transferred the funds to the incorrect account on the day of completion. Is this negligence?
Thank you for your comment.
In short, this probably was negligent, unless a reasonably competent solicitor with the same information and in the same situation would have made the same mistake.
Presumably you are facing claims for late completion (https://cunningtons.co.uk/delayed-completion/). You should probably raise a complaint and see if the solicitor is prepared to cover any loss.
Hi, we reserved a new build in feb 2021 and exchanged contracts July 2021 for an October 2021 completion. There was a long stop date of September 2022. It is now January 2023 and the property is still not ready. I know if we walk away we can get our reservation free back but what about all the fees paid for searches and solicitors etc? Can we make a claim against developers for breaching contract and not completing by the long stop ?
Thank you for your comment. What can or cannot be recovered will depend on a number of circumstances, but primarily whatever was contractually agreed between the parties.
hi, I have a friend who is currently trying to sell her flat. It is on an interest-only mortgage, which has expired, and her bank has indicated that they will foreclose if she doesn’t pay the outstanding amount, which is about £36,000. She had a buyer, but the deal fell through because the freeholder failed to provide the necessary paperwork. She then managed to get an offer on a lifetime mortgage, but this deal also expired because the freeholder failed to provide the necessary paperwork, even though they had six months to do so. Is there anything she can do to put pressure on the freeholder? Do they have any legal obligations in this situation? It doesn’t seem right that they caused two done deals to fall apart simply by failing to respond in time.
Thank you for your comment. While we cannot give definitive advice based solely on this without having seen the documents, whether action can be taken against the freeholder will depend on the terms of your Lease. Often leases contain provisions that assignment of the Lease requires the consent of the freeholder, but that such consent is not to be unreasonably refused or delayed. Given that this wording is also used in commercial rented premises, there is a significant body of case law as to what can constitute an unreasonable refusal or delay in the granting of consent. However, given your deadline and the threat of possession proceedings from the mortgage lender, we would not guarantee that we could convince a Court to force the landlord to act within such a timeframe.
Regarding threats of possession from the mortgagee, have proceedings been issued on this?
Please therefore feel free to contact our Braintree office for a confidential discussion.
Hi
my offer was accepted and went ahead the end of May 22. i immediately did all the necessary things like appoint a solicitor, mortgage advisor and also got my mortgage agreed by July 11th . i was then later told after the fact the house was in probate and i had to wait for docs to be sent before i could proceed with any searches on the property. i never received the probate docs till late September and now after futher legality issues with the power of attorney sellers side i am still no closer to completion. we have exchanged draft contacts and my mortgage is due to run out on 8th december.
what rights do i have to pass on costs such as new survey fees, storage costs, additional cost of mortgage (itll be costing me £200 more a month) and also just compensation in general for the stress ?
thanks
Thank you for getting in touch, and we are sorry to hear of the delays you’re experiencing with your transaction. Unfortunately under the English legal system the seller has no liability to you for wasted costs, or indeed for extra costs incurred in renewing searches, surveys and the like. It sounds as though you have not exchanged legally binding agreements, and that being so, so your only recourse would be to seek to renegotiate the purchase price to take account of the extra cost you have, or will incur.
Hi, I am currently in a position where my remortgage completion has been delayed due to the new lenders not transferring funds to the current lenders on the date agreed. As a result, we have now paid to our current lenders at the standard variable rate as we didn’t want to risk defaulting on a mortgage. As it stands, we have not been informed of when completion will take place. Do we stand to gain any compensation from this due to being forced on to this standard variable rate? Our remortgage has been painfully slow, with no contact from the new lenders themselves. Thank you
Whether or not there is a basis of claim will depend heavily on what was promised in terms of completion dates and agreed contractually. There is no automatic right in these circumstances. You would have to show that either you entered into a contract with a particular lender based on their promise to complete by a particular date, that there was a contractual obligation for them to complete by a certain date, or that they owed you a duty of care which they breached.
Hi there. I’m currently selling a shared ownership property part-owned by a housing association, in which I no longer live as I have moved city. The buyer was agreed in April and we have still not exchanged.
Both the buyer’s and my solicitors have been slow to communicate all the way through, with issues with paperwork (e.g. my ID needing to be electronically verified rather than through the certified copies I was told were adequate) only brought to my alert *months* after I first provided it. The buyer’s solicitor first raised an unprecedented issue with the contract in August about parking. Months have passed since then. The buyer and I both signed the transfer deed in September and the buyer’s solicitor (without their client’s knowledge) intervened before it was signed by the housing association to once again raise this parking issue. They are now pursuing a deed of variation which will delay the property sale even further.
Since this issue was first raised in August and it has taken till October to even request a deed of variation to the lease, do I have grounds to take action against any of the parties in the sale or is it not possible because exchange has not taken place? I am losing over £1k a month on a flat that is sitting empty.
Before exchange of contracts, there is no contract in existence between a buyer and a seller that can form the basis of any claim.
As for your solicitor, you will have a contract in place with your solicitor (called a retainer) and so far as there is a breach of that, or they have not undertaken their work with the reasonable care and skill expected of a reasonable conveyancing solicitor, there may be a claim in negligence. Professional negligence claims are, however, always complicated and normally the arguments turn on what the position would have been (i.e. what the client would not have lost financially) had the right steps been taken at the right time.
We would, however, seek some advice from your solicitor on the issue of the TR1/transfer you and the buyer signed. It would not be unusual for a buyer and seller to sign separate transfers and send these back to their respective solicitors, undated, to hold on file pending completion. We are not sure what you and the buyer have agreed directly but there is a reason why solicitors are generally instructed in respect of legal matters and this is to protect their clients from esoteric and other issues which might not be easy for a layperson to spot. It is unlikely to be something to worry about or to have occurred to any of the parties, but a transfer is a legally binding document and it is this that transfers ownership in a property. If what you have done directly with the buyer is to create a legally binding contract for the sale of land, equitable ownership in the property may have transferred (if that was the intention), notwithstanding that the buyer might struggle to register themselves as the legal owner because of things like the requirement to obtain consent from the housing association. As mentioned, it is unlikely to be an issue but possibly worth double checking with your solicitor in case, particularly if relations between the parties are souring.
We exchanged on Tuesday and completed on Friday @11:30 but the sellers did not move out we gave them extra time after 2pm but still not moved. Then they had until 4pm but still nothing. Served them notice at 5pm .. what does that mean for us? Do they start being charged interest immediately? Our after 24 hrs ? Confused.
Thank you for your comment. While we are not able to give specific advice as to the substance of your transaction, as we have not seen the contract of sale or similar, the general rule is that a failure to complete can result in several different heads of loss for the seller. Firstly, there is interest as you identify and your entitlement to interest will depend on the precise terms of the contract so you would first be advised to consider that. Secondly, if you have undergone other losses of and occasioned by the failure to complete on their part, then you may be entitled to this also.
Exactly what your legal rights regarding their occupation of the property are, however, will depend also on the contract and also on what exactly was done by the sellers. Please feel free to contact the Litigation team at our Braintree office for a confidential discussion on this.
I bought a property this year. The exchange took place in January with completion scheduled in April due to chain involving the sellers. This was delayed to July and now September (with further delay possible). My agreement in principle expired and I had to get a new one which now has more interest and also involved paying the mortgage advisor their fees. My solicitor says they cant help and advised me to just wait. Please advise what rights do I have in this case since I have paid the 10% deposit and done everything from my side.
Thank you for contacting Cunningtons. Without reviewing the Contract you have entered into it is not possible for us to give you any specific guidance regarding your situation in this forum.
You should ask your solicitor to explain the implications of the contract you have entered into and whether you can rescind it as a result of the other parties’ delays.
We hope you manage to resolve matters to your satisfaction.
HI there
I am having an unfortunate experience as a buyer because the savings account with all my cash in that said “unlimited withdrawals anytime” suddenly had a daily limit when I tried to take it all out to complete – and they dont do CHAPS (go careful with a Chase savings account!). So I ended up not completing and having to delay a week while i extracted my cash in daily max alowed lots (I have complained to financial ombudsman ongoing). So its nearly the day when I have it all transferred, and can exchange, when my ever helpful (not) solicitor pops up and suddenly says as well paying a £150 “charge” and 4% of outstanding amount above base rate I will also be liable for “claims made by all other members of the chain due to not completing on original date” – this 1. seems a bit over the top? and 2. can they just land this on me a day or 2 before completing, sort of bounce me into it?? I know it was sort of my fault because of the savings account (though definitely mislead) but it’s only a further week’s delay for goodness sake?
Thank you for contacting us with your question. Whilst you should always liaise with your own conveyancing solicitor on such matters, these things are contractually based. If you have entered into the Law Society’s standard contract used on the vast majority of property transactions, then this provides for penalty interest (usually at 4% above base) payable by the defaulting party (you in this instance) if completion is delayed beyond the contractual date. From what you have said you are the party at fault (albeit because your bank has delayed funds) and so under the standard Contract you would be obliged to pay the Seller interest as your solicitor has said. The penalty interest is included in the Contract as an incentive to both parties to complete on time.
Sometimes the contract includes a provision to also pay the innocent parties’ legal cost for delayed completion, so check this is the case with your solicitor. Your Seller is entitled to call for these sums if they are included in the Contract terms before completing, so we recommend contacting your solicitor to ensure you have paid all contractual sums due to avoid further delays with completion of your purchase.
We hope this helps.
So I signed all my contracts to move 1st April on 30th March, i paid my deposit on 30th March, cleared that day. I was bottom of the moving chain and my money didn’t get to buyers solicitors until 4.35pm on 1st and the solicitors refused to complete as my seller “has nowhere to go”. The property i am buying is round the corner from my current home and they have moved out. They received my money, why would they not have completed and given me my keys?
Thank you for contacting us, and we are sorry to hear about the problems you are having completing your transaction.
However, as in our reply to Hayley on March 29th 2022, these questions should be addressed to your current conveyancing solicitor to deal with, as it will depend on what was agreed in your Contract with the Seller. We would not be able to provide legal advice without the full facts and file of papers.
We do hope you manage to resolve the delays and move to your new home very soon.
Hi, i’m wondering if you could advise whether I have a potential negligence claim against my conveyancer.
We accepted an offer on our leasehold property March 2021 and finally completed November 2021, missing the stamp duty holiday.
I have had reassurances in numerous phone calls from the conveyancer that we would complete before the stamp duty holiday ended (Sept 2021).
My buyers used the same conveyancing firm to represent them. Complete lack of communication between the buyers conveyancer and mine meant that matters that should have been dealt with early in the process were only raised end of August. This generated paperwork with the freeholder of the property which took us to the end of October. I have the evidence that the points in question were raised in April/May 2021 and were clearly not followed up by either conveyancer to resolve them until I complained in August.
As a result we have had to pay stamp duty, and i’m wondering if I can claim this back as compensation from the conveyancing firm?
Thank you for your comment.
This firm does undertake professional negligence work and also have a member of staff that is a member of the Professional Negligence Lawyers Association. We cannot, however, provide specific advice on our website, simply general guidance which should not be considered a substitute for this.
We have had a number of enquiries regarding the missing of the SDLT holiday. Unfortunately, it is not simply a case that the deadline was missed and therefore your solicitors should be liable.
The broad test applicable in any professional negligence case is whether or not that professional behaved in the same manner as a reasonably competent professional in the same position would have. This means considering the exact factual circumstances and considering whether or not the issue could have been avoided. Whilst with the benefit of hindsight, this can appear a straightforward point, it is not. The professional’s conduct would be considered in context and if it could be said that any reasonably competent professional would have done the same thing in the circumstances, then it is unlikely that there would be a case.
It would also be necessary to consider the scope and detail of the solicitor’s retainer (this is the contract between a client and their solicitor). This will broadly set out what the solicitor says they will do and may also contain limitation of liability clauses, although often such limitations can be challenged as unfair. You do not state whether or not the reassurances given to you about completing before the end of the SDLT holiday were before or during the transaction, the difference potentially being whether or not it can be said that you relied on such a representation when deciding to instruct the solicitor.
There are some cases specific to conveyancing solicitors which could assist. For example, if the matter in question is something which a practitioner’s guide would recommend being addressed more promptly than was the case, then there may well be a basis of claim. There is specific case law on using practitioner’s guides for reference as to what the expectations of a reasonably competent conveyancing solicitor are.
Depending on your solicitor’s accreditations, it may be the case that the Law Society Conveyancing Protocol was adopted. If this was departed from, this could be evidence of negligence.
If you would like to consider the matter in more detail, please do get in touch.
I had a completion date of 28th March. Got phone call from my solicitor on that day at half 12 saying still hadn’t received contract back from sellers solicitors and was struggling to get a hold of them. By half 4 on completion day, my solicitor went ahead and transferred all the funds to the sellers solicitors but has said she hopes she will hear back the next day to complete. That’s a day off work, moving van rental all wasted. I was told when I signed contract if I delayed i would be liable to pay compensation- surely the seller is to??
Thank you for contacting us, and we are sorry to hear you are experiencing problems in completing your transaction.
However these questions should be addressed to your current conveyancing lawyer to deal with, as it will depend what was agreed in your Contract with the Seller, and we would not be able to provide legal advice without the full facts and file of papers.
We do hope you manage to resolve the delays and move to your new home today.
i was a bottom of the chain buyer, and out sellers were unable to complete on the date agreed. this was due to being unable to provide a signed deed of amendment for a leasehold property. my solicitor served a notice to complete, and
we completed 2 working days later, and we had to pay out additional removal costs.
we had been ina rented property which we had to vacate on completion day and were left unsure if we had anywhere to live!
is there any point pursuing our vendors for the additional costs we incurred?
Whether or not you want to pursue the vendors is of course a decision for you. It also depends on the terms of the contract you agreed.
The most recent iteration of the Standard Conditions of Sale (Fifth Edition – 2018 Revision) says:
“7.2.1 If there is default by either or both of the parties in performing their obligations under the contract and completion is delayed, the party whose total period of default is the greater is to pay compensation to the other party.
7.2.2 Compensation is calculated at the contract rate [the contract rate is the agreed interest rate] on an amount equal to the purchase price, less (where the buyer is the paying party) any deposit paid, for the period by which the paying party’s default exceeds that of the receiving party, or , if shorter, the period between completion date and actual completion.
7.2.3 Any claim for loss resulting from delayed completion is to be reduced by any compensation paid under this contract.”
Put another way, yes, if it can be said that your losses arose as a reasonably foreseeable loss from the breach of contract, they can be claimed. However, any damages claimed need to be reduced by the amount of compensation (interest) claimed under the contract. In effect, you can claim the greater of either the damages or the interest under the compensation clause in the contract, but not both.
I was ment to complete my property purchase on the 27th July but did not complete untill 4 days after.
Around the 24th July I was told by my broker I would have to sign the bottom of the mortgage offers and write down “offer accepted”.
My solicitor also sent an email telling me I should deal with this matter urgently, which gave me the sense that something wasn’t right, but I could only assume because of the pandemic that the parties involved had a huge backlog of work to deal with.
By the 25th my solicitor told me that the mortgage provider wasn’t happy with this and I had to sign the actual acceptance the solicitor attached to the email.
By the 26th I had a response that I was given the wrong acceptance letter for another property I was purchasing, so they resent me the correct one this time and I returned.
For some reason on the 27th my mortgage provider told me they weren’t happy with the acceptance letter so I resigned it and sent it of on the 27th.
I was informed on the 31st we had completed and a few weeks later now there is a claim against me for something that I feel was not my fault as in any given situation I did what was asked from me with immaculate time keeping.
Now I am scared, anxious and distressed as I put all my savings into these properties and will not be able to afford to cough up thousands of pounds out of. No where.
Is there any advice for a person in my situation that you have, I would be very grateful.
Thank you for your comment. Unfortunately from your comment, we cannot determine what the claim against you is about. With this in mind we cannot provide any general guidance on what can be done about it.
Hi
We were told our buyers (agreed to sell to in mid April) would break the chain before 30th of June so there would be no risk to complete on the 28th July as we’d requested.
We needed to move for a job starting in August and children starting a new school hundreds of miles away
On (approx) 25th June we were told their buyer’s solicitor and mortgage co had just found out there was an increase in ground rent scheduled in 13 years time so our buyers would need to get a deed of variation to fix it.
Since then we’ve realised our buyer’s buyer’s solicitor keeps asking questions that should have been asked months ago… Eg building insurance costs and fire risk assessments which is delaying. And there’s always just one more thing that could always have been added to the question before.
As a result we’re having to rent, and are likely to miss the 30th September stamp duty deadline (our vendors had agreed to a family commitment for 3 weeks from next week so missing their deadline before they go and can empty). I know 6500 (for rent and SD) is small fry in the grand scheme of things, but is there anything that can be done about our buyer’s buyer’s solicitor and his/her inability to ask for information in a timely process that has meant our buyers couldn’t break the chain or even complete 2 months after the promised date.
These seem like really basic questions that weren’t asked at the outset and is costing us a lot of money.
Thank you for your comment. Until exchange of contracts there is no legally enforceable contract in place and not really any basis to claim any losses arising.
However, as no contract has been agreed you may wish to renegotiate the purchase price to take account of the additional losses that you are incurring.
Hi,
We had our remortgage completion date set for 1st of August, our new remortgage funds were ready and all paperwork sent and completed ready for 1st of august. However solicitors had to obtain new redemption figure resulting further 6 days delay (at no charge from our previous lender) but without any reason solicitors delegates for additional 6 days resulting 6 day interest charge from previous lender. Are we entitled to claim this back due to no fault of our own or out new morgage leader? Thanks Chris
Thank you for your enquiry.
Whether or not a solicitor can be held liable for negligence will depend on a large number of factors. In any professional negligence claim, the two most important factors to consider from the outset are the professional’s retainer and what occurred in practice and why; there could be a number of mitigating points to consider. For a professional negligence claim to be successful, it must be shown that the professional had a duty of care to do something and that this duty of care was breached, causing a loss.
A solicitor’s retainer (sometimes called a client care letter) would normally be sent before or as soon as is reasonably practicable after the initial instruction. This would contain details of what the solicitor agreed to do. If the retainer is silent on things such as time limits for making payments, then whether or not the solicitor can be said to have complied with its duty of care will depend heavily on the circumstances. There is no specific law which states that a 6 day delay is automatically negligent. The relevant standard of care for a solicitor is that of a “reasonably competent solicitor”. Again, there is no statutory definition of this, which means whether or not your solicitor acted as a reasonably competent solicitor would depends on the factual circumstances of the matter and whether or not another solicitor in the same position would have behaved in the same way.
Hi, is it possible for a seller to delay the agreed completion date after we exchanged the contract? so if I am not afraid the seller to pull out the sell, it is better to exchange and completion on the same day? Thanks
Thank you for your comment.
The arrangements for exchange and completion are contractually agreed on completion, but the parties can, if they both agree, vary this. However, if one party does not wish to do this and wants to complete on the agreed day for completion, they should consider serving a notice to complete. This is a question that you should certainly raise with your conveyancing solicitor, as much would depend on what you want to achieve from the situation.
Hi, I was notified by a voice message from my solicitor on 6th June, that they can confirm the completion date is 23rd June, everything is in place. One day before completion, they told me the buy solicitor is still waiting for the buyer’s mortgage company confirmation, so need to be delayed. Then I found out they haven’t even exchange contract yet!( I assume they did as they confirmed the completion date already without any other update, so I assume everything went well). They only exchanged contract on 25th June and delayed the completion to 29th June, which is very risky to meet the stamp duty holiday deadline.
Can I ask my solicitor for compensation? I lost £125 for removal company cancellation fee/ deposit, and the delaying caused us inconvenience in work and life, as I have switched broadband services on 23rd, and had to book days off as cannot work from home without internet. All things have already packed so not convenient to live.
Thank you for your comment.
From what you have described, this appears to be a possible negligence claim but much will turn on the exact facts of the matter. Much will also depend on the content of the voicemail message left for you, and whether or not it was explained that completion would definitely be taking place on 23rd June 2021 or if this message was caveated or qualified in some way. For example, a clear contrast in position can be drawn if it was expressly stated in the message that you should make arrangements to complete and vacate by 23rd June 2021, as opposed to a message which suggested that this was only a proposed date and/or that confirmation might be provided later or your instructions required.
The starting point for any professional negligence claim is to consider the retainer (contract) between the professional and person instructing them. In respect of a solicitor, it is normal for an initial client care letter and terms and conditions to be issued at the start of the relationship that explains the scope of the solicitor’s instructions and what they are going to do. Whether or not your solicitor has acted in your best interests and/or done what they were supposed to do depends on what they have explained to you in correspondence and what they actually did. For example, if you have simply instructed your solicitors to exchange and complete “as soon as possible” without specifying particular dates, then arguably, they have done what you have asked. It should also be remembered that your solicitors cannot force a seller to exchange contracts. If you explained to your solicitor that you wanted a contractually agreed completion date of 23rd June 2021 and they agreed an alternative date without instructions, then clearly your instructions have not been followed. It also strikes us that if your solicitors were informed that exchange and completion would be delayed at extremely short notice, they would not be able to communicate this to you until shortly after this date.
Although considerably more complex, the basic position is that a professional can only be liable to their client for the losses that they cause. This normally involves asking what the position would be if the “correct” advice/steps had been given/taken. You seem to be suggesting that the solicitors should have exchanged contracts with a completion date of 23rd June 2021 sooner. As mentioned, this will depend on what your solicitors said they were going to do and what you asked/agreed with them to do.
I purchased my property jan 2013 ,my deeds showed the boundaries where correct Iput my house up for sale march 2020 the sale has been going through since july 15th 2020 terms and conditions the sale should of gone through end of november, my solicitor informed me mid november the land at front of property does not belong to me ,my solicitor failedto find to find this Iam still waiting for the sale to go through .The same solicitor acted for me during the purchase and intended sale of my property,can i sue my solicitor. Mr S. Walker.
Thank you for your comment. Normally this would be a type of work we could deal with, however, I note that the original purchase in which the solicitor made the mistake you are seeking to claim over was in 2013. The limitation period for professional negligence claims is 6 years from the date of the negligent act, or three years from the date of knowledge of the negligent act, so my concern is that this may already be statute barred. Time begins to run in the latter case from when you first knew, or could reasonably have known, about the act or omission giving rise to the negligence claim.
If that turns out not to be the case, then there may be a case there but we would have to investigate fully the circumstances in the light of the current conveyancing file you have with this solicitor and the file from the previous transaction in order to determine the prospects of success.
Hi,
I have a slightly different question…
Are any compensations paid by the developer for new build taxable? and whether this is regarded as income tax or CGT?
Thanks
Thank you for your comment. Unfortunately this is not something that we would be able to provide even general guidance on. As solicitors we do not give tax advice. We would recommend that anyone that wanted tax advice should seek the input of a suitably qualified accountant.
I exchanged contracts and a completion date was set for the following week – the evening before completion my solicitor called me to say she had received the mortgage funds but had received a phone call from the sellers solicitors advising completion would not be taking place as they had omitted to get the necessary legal paperwork for the sellers Help To Buy redemption and so were not legally able to complete – my solicitors served notice and i have been told the sellers solicitors have 2 weeks to complete before they are in breach of contract – surely they are already in breach as exchange occurred with a set completion date. am i entitled to claim any costs? my solicitors have kept the mortgage funds as waiting for the sellers solicitor to be in a position to confirm when we can complete – there is also a chain of 5
Thank you for your enquiry, however this should be addressed to your current conveyancing solicitor who has the benefit of the Contract in front of them and can properly advise you of your remedies against the Seller.
I’m the cash buyer. We had the survey and the valuations and instructions etc a month ago on Feb 3. We were hoping to close on March 6. The sellers have already moved out. The sellers solicitors have been very slow taking 2 weeks in responses and in inquiries and hadn’t started the paperwork until mid Feb and we instructed our current landlord that we would be moving out. What can I do? What should I expect? We paid 25,000 over asking, we weren’t the highest bidder according to the estate agent (no proof of other bidder though) but the house was never registered.
Thank you for your enquiry. It sounds as though you already have your own conveyancing solicitor, and so you should direct your questions to your own solicitor initially. If there is no binding contract between the parties as you have not yet exchanged, then there is no basis for a claim against the seller. We do recommend you speak to your own solicitor as soon as possible to weigh up your options.
Hi
The buyers solicitors are delaying the completion, they have been very slow in responses, which has cost me a loss of over 2 k on interest charges on a freehold vacant property. There is no chain involved. Can I claim compensation for this loss.
Thank you for your comment. You should consult with your current solicitors with respect to the service of a notice to complete, so far as exchange has taken place. They should also advise you on the position with respect to remedies available under the contract of sale.
If exchange has not taken place, then it is very unlikely that there is any basis to claim your losses from the buyer.