Delay or failure to complete Flashcards
Failure to complete SCS
Party fails to complete by time and date specified in contract: obliged to pay interest on each calendar day’s delay under SCS
Interest = contractual compensation
What must the buyer pay if they are late in completing?
The buyer pays interest on the purchase price less any deposit paid
What must the seller pay if they are late in completing?
Seller pays interest on full purchase price
What is the interest rate?
Under SCPC default rate is 4%
- penalty interest rate is 4% above the base rate
What is the seller entitled to if the buyer is late in completing?
Claim contractual compensation
- damages only permitted if the seller has suffered a loss over and above what contractual compensation can give
What can the buyer claim if the seller has breached the contract?
Buyer can claim common law damages for losses
- buyer might have additional sums for removal trucks, temporary accommodation etc…
When is rescission remedy available?
Rescission is where the contract is set aside and parties are put back in position in which they were before the contract was made
- not automatically available as under a standard contract time is not of the essence
- serve notice to complete - makes time of the essence - if parties do not complete within 10 working days - rescission is available
Seller’s remedies following service of notice to complete
The seller may rescind the contract and on doing so may also:
* Forfeit the deposit and any interest accrued on it
* Resell the property and any contents included in it
* Claim contractual damages
If the seller serves a notice to complete, the buyer fails to complete in accordance with the notice and the seller rescinds the contract – the seller is no longer entitled to contractual compensation under SCS
* The seller chooses to rescind the contract
* The contract does not automatically rescind
Buyer’s remedies following service of notice to complete
Rescind the contract and on doing so:
- demand return of deposit
- claim contractual damages or even specific performance
What is the remedy if completion does not take place?
Damages
- completion must actually occur for compensation to be payable
Remedy available to seller where a notice to complete is served
Contractual compensation for number of calendar days’ delay and a claim for damages less the calculated compensation
Court damages take into account compensation paid under the contract
Is interest payable on delay whether or not a notice to complete is served?
YES - interest will be payable on any delay whether or not a notice has been served
A solicitor is acting for a sale of a residential flat which has been sold subject to a tenancy, instead of vacant possession.
According to the Standard Conditions of Sale, if there is delayed completion due to the buyer’s default, what option does the seller have instead of claiming interest?
The seller can elect to take the rent from the tenant
Can an innocent party apply to court for specific performance?
Yes, this right is not precluded by the fact a notice to complete has been served and not complied with
- it is an equitable remedy
e.g., can be made if seller if refusing to move out in pre-completion
