Delay or failure to complete

Question 1

What does the SCS state in relation to failure to complete?

Answer 1

If either party fails to complete by the time and date specified in the contract, then they are obliged to pay interest for each day’s delay under SCS.

This is calculated at the rate specified in the contract. If there is no such rate specified, the Law Society interest rate applies.

Question 2

Under the SCS what happens if the buyer is late in completing?

Answer 2

The buyer pays interest on the purchase price less any deposit. Also applies to SCPC

Question 3

Under SCS what happens if the seller is late in completing?

Answer 3

The seller pays interest on the full purchase price.

Question 4

How do you calculate interest?

Answer 4

Purchase price - any deposit

x

4.1/100

x

1/365

this answer gives you the daily rate of interest.

Question 5

When are common law damages available?

Answer 5

The buyer can claim common law damages for the buyer’s losses. However, if the buyer is successful in a claim, the interest received under SCS is deducted from such sum.

Question 6

When is rescission available?

Answer 6

Recission is not automatically available to the non-defaulting party. This is because time is not of the essence.

However, after either party has failed to complete, the non-defaulting party can serve notice to complete which makes time of the essence.

Question 7

If a party serves notice to complete how soon after must the parties complete?

Answer 7

Must complete within 10 working days (excluding the day on which notice is given).

Question 8

If notice to complete is served and the buyer is the defaulting party what must they do if the deposit was not 10%?

Answer 8

They must make it up to 10% without delay.

Question 9

What is the effect of notice to complete?

Answer 9

Means the parties must complete within 10 working days, the first day being the day after notice to complete has been served.

The notice also applies to the party serving it.

Once served, the notice cannot be withdrawn unless both parties agree.

Question 10

What are the remedies available to the seller if the buyer fails to complete?

Answer 10

Seller may rescind the contract and also:

• forfeit the deposit and any interest accrued.
• resell the property
• claim contractual damages

Question 11

What are the remedies available to the buyer if the seller fails to complete?

Answer 11

They may rescind the contract and:

• demand return of the deposit with any interest accrued on it
• claim contractual damages or specific performance.

Question 12

When does contractual compensation apply?

Answer 12

Only applies to delayed compensation, so where completion does not take place at all, the remedy is damages.