What happens if things go wrong on completion day
Completion day and money transfers.
On completion day the buyer's solicitor sends to the seller's solicitor the balance of the outstanding money due on the agreed purchase price at the time of sale.
There are three simple steps you go through on the day of completion.
1. Buyer's solicitor receives the mortgage money from the lender and transfers the balance to complete the sale with the seller.
2. Buyer's solicitor sends the completion money to sellers solicitor to complete the sale.
3. The seller releases keys to the buyer directly or via the estate agent as a vacant possession property.
If it is that simple why do so may things go wrong on completion day and what can i do if we do not complete?
You can choose to complete on any day the sellers and buyers agree to because it is your choice when you want to complete not the solicitors or the agents.
Why clients are told to move on Friday.
Most people are told to choose Friday as their completion day even though the cost of removals are higher and most removals companies are booked up. The main reason for moving on Friday is financial. If you choose a mid-week day to complete you are more likely pay less for the removals company and you are less likely to have problems when transferring the money outstanding for completion.
Reasons to not move on a Friday.
The biggest problem with completing on a Friday is failing to complete. If you do not complete on Friday you have to wait until Monday before you can do anything. Unfortunately you may have moved out of your house and you may not be allowed to move into your new house.
This means you will have to find somewhere to stay, pay your removals company to put your belongings into store and then arrange redelivery once you have sorted everything out.
This in turn means you may have to start legal proceedings against the breaching party to cover your extra costs over the weekend or until the completion has been finalised. You are paying for the removal twice because someone did not do their job correctly.
If the completion money is received by the seller's solicitors too late, they may not have enough time to redeem their mortgage on the property.
What happens if you are unable to complete.
In cases like this, it is common for the seller's solicitor to not complete and the buyer won't be given access to the property. If this happens the seller's solicitor serves notice to complete on the buyer's solicitor and the buyer will be liable for the cost of the notice fee and other costs incurred by the seller under the exchange contract. Costs include: - removal, hotel, storage, re delivery from store or collection from house to house..
Not completing on contracted completion day.
Completion should take place on the next working day which could be Monday if you fail to complete on the stated day, which in most cases when problems happen to occur is Friday.
Not completing on Friday leaves you with no other option but to go into storage over the weekend then find a hotel or stay with friends and family. Whatever the reason is for not completing, ( buyer doesn't transfer the balance of the money or the seller doesn't release the keys), the breaching party is at fault and will be liable for the costs for late completion. The breaching party is served a notice to complete by the other side’s solicitor and then has 2 weeks (10 working days) to complete before the contract is rescinded. The costs for failing to complete a purchase are considerable.