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calculated by reference to the purchase price, less any deposit paid until completion takes place or the contract is rescinded.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calculated by reference to the purchase price, less any deposit paid until completion takes place or the contract is rescinded.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.

Delayed Completion? That’s Going To Cost Me A Fortune!

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Kate says:
April 16, 2024 at 10:21 pm
I am moving home and I paid for the removal company. 16 hours to the move, I receive an email to say my buyer is not in funds and there will be a delay. I have had to cancel the movers and they have fined me for this. 2k. Who is liable for this cost?
Reply
1. jason says:
  April 21, 2024 at 4:53 pm
  Thank you for contacting Cunningtons and we’re sorry to hear you have had problems with your completion.
  The position as to who is liable for those costs will depend on whether or not you have exchanged legally binding contracts for the sale of your property with the buyer. Your conveyancing solicitor is best placed to advise in this regard, but if you have exchanged Contracts then you may have a claim to recover these costs from the defaulting buyer. If you have not exchanged Contracts and were due to simultaneously exchange and complete on the same day, then unfortunately your buyer would not be responsible for those costs.
  That does not mean, however, that you could not then renegotiate the agreement you have with the buyer if they have caused you unexpected costs. Provided there’s no legally binding exchange of Contracts then either party can withdraw, or seek to change the agreed price right up to the point of exchange.
  Reply
Steve J says:
January 20, 2024 at 7:12 am
We are currently in a position of selling our house due to the increase in mortgage rates pushing our mortgage up by £900 a month. Making it unafordable The sale was agreed back in September. The buyer is in rented accommodation and we are moving in with family. So there is no long change.
The buyers solicitor keeps no responding to estate agents or buyer. They claimed no to have received inquiries twice when all in the email chain had can see they had been sent. When they do respond they keep promising to send out contract to exchange the next day but its been 2 weeks and no response and no contracts
We stated this need to be completed by middle of December and the buyer agreed ,but we are still waiting and the buyer still hasn’t received contracts.
This has now cost us the seller, 2 months of increased mortgage, plus house hold bills. Leaving us in financial difficulty.
What are our options?
Reply
1. Jason Bradshaw says:
  January 25, 2024 at 7:56 am
  Thank you for your comment.
  There is little you can do except change your buyer, or encourage your buyer to change their solicitor if they’re not happy with them. You don’t have any legal recourse against a buyer for not exchanging, or against their solicitor. Your buyer could raise a complaint against their solicitors to see if that prompts them into action, but there’s no monetary claim you can make. The only other option would be to seek to agree a higher price with the buyer to take account of the extra you are now paying out for the property, but you’d need to speak to your estate agent about whether the buyer is likely to agree, or if they can find a new buyer at a higher price.
  Reply

Delayed completion? That’s going to cost me a fortune!

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