Delay or Failure to Complete Flashcards
What does a seller’s failure to complete mean?
Unable to date an executed transfer
What does a buyer’s failure to complete mean?
Seller’s solicitor not received money to complete
What is imposed on money in failure to complete?
They are obliged to pay interest for each day’s delay
What does the buyer and seller pay interest on if late to complete?
- Buyer: purchase price less deposit paid (SCS and SCPC)
- Seller: full purchase price (not SCPC)
Where do we get the interest rate from?
Law Society
What is current rate of interest under Law Society?
0.040999999999999995
How do you calculate interest?
1) Work out 1% of the purchase (or less deposit)
2) Multiply by 4.1% (current rate)
3) Divide by 365 days (gives you daily rate)
What if it is a leap year?
Divide by 366 not 365
What can buyer claim if seller has breached contract and interest is minimal?
Common law damages for buyer’s losses (i.e. having to pay for storage)
Is rescission automatically available to non-default party in failure to complete?
No, because under standard contract, time is not of the essence
What must a party do if they wish to rescind?
First, they must serve notice to complete on the other making time of the essence
How long does a default party have to complete if a notice to complete has been served?
Ten working days, excluding the day on which notice is given
What time does the notice to complete elapse?
2pm, unless amended
What if the buyer has defaulted but not paid up 10% deposit yet?
He must make it up to 10% without delay
When can a notice to complete be withdrawn?
If both parties agree
What are seller’s remedies for buyer’s defaulting?
1) Forfeit deposit and any of the interest
2) Resell property and any contents
3) Claim contractual damages
What are buyer’s remedies for seller default?
1) Demand return of deposit with any interest
2) Claim contractual damages or even specific performance
