Completion Flashcards
What does the buyer’s solicitor do on the day before completion?
Ensure they have the mortgage advances and balance from client
How does completion take place?
Law Society Code for completion by post
Normally happens on a Friday
What does the seller’s solicitor do the day before completion?
- Undertake to have the seller’s authority to receive money on completion
- On completion, to have authroity of the mortgage holder to receive the sum to repay them
What happens on completion day?
- BS sends money to SS
- As soon as money received, SS reports this to BS
- Phone - handwrite date on to TR1
- SS calls estate agent to release keys
- BS calls buyer - they can move in. If acting for lender, also date the legal charge
What does the SS do immediately after completion?
- SS holds the transfer deeds and docs to the BS’s order
- SS undertakes as soon as possible after completion and in any event by the end of the working day following completion to send the written confirmation of completion and the executed documents to the BS
- SS redeems mortgage, sends sale proceeds to client
What can cause a delay or failure to complete from the Seller’s side?
Seller’s solicitor is unable to date an executed transfer due to:
- Seller not returning the executed transfer.
- Seller returning the executed transfer but instructing solicitor not to date it.
What can cause a delay or failure to complete from the Buyer’s side?
- Buyer’s solicitor has not received the money needed.
- Buyer’s solicitor has received the money but Buyer instructs not to release it to Seller’s solicitor.
What is the obligation of the defaulting party under SCS?
The defaulting party is obliged to pay interest for each day’s delay, as determined by the agreed contractual rate
What happens if no contractual rate of interest exists under SCS?
The Law Society interest rate applies.
If Seller is late, Seller pays interest on the full purchase price; if Buyer is late, Buyer pays interest on the purchase price less any deposit paid.
How is interest calculated under SCS?
Divide the interest rate by 365 and multiply by the number of days.
Why might common law damages not be practical?
It may not be practical or cost-effective to take proceedings if Seller resists the claim, leading to higher damages.
What happens to interest received under SCS if Buyer is successful in a common law damages claim?
Interest received under SCS is deducted from common law damages.
What is rescission?
A remedy where the contract is set aside and the parties are put back in the position they were in before.
Is rescission an automatic remedy?
No, it is not an automatic remedy.
When is recission an available remedy?
If the innocent party serves a notice to complete and makes time of the essence.
How long do parties have to complete after a notice to complete is served?
Parties must complete within 10 working days.
What must a party do if they have not given a full 10% deposit and receive a completion notice?
They must make it up to 10% without delay if there is a notice to complete.
What must the party serving the notice do?
The party must comply with the notice and be ready to complete.
What can the seller do if the buyer fails to complete within the 10 working day period?
Rescind the contract:
- Forfeit deposit and any interest accrued on it
- Resell the property and any contents included
- Claim contractual damages
What can the buyer do if the seller fails to complete within the 10 working day period?
B can rescind the contract:
- Demand the return of the deposit with any interest accrued on it
- Claim contractual damages or even specific performance (equitable)
