Lecture 4 - completion, post completion and remedies

Question 1

What does buyer’s sol need to check on morning of completion re mortgage?

Answer 1

That they have received the seller’s sol’s undertaking in respect of the mortgage being discharged.

Question 2

How does the completion telephone convo go?

Answer 2

• Seller’s sol confirms has buyer’s payment held to order, and that signed TR1 will be sent with title deeds etc and they UNDERTAKE to send in tonight’s post or document exchange.
• Buyer’s sol then agrees to date TR1 with today’s date and release monies.

Question 3

What does seller’s sol have to do pursuant to completion conversation?

Answer 3

• Send mortgage redemption monies to lender - will receive DS1 as proof within a few days.
• Pursuant to their undertaking will forward this evidence of discharge to buyer!

Question 4

What are the three components of the remedy for late completion under SCPC 10.3.1?

Answer 4

Compensation is payable for LATE completion by the buyer to the seller:

• at the CONTRACT RATE
• on the BALANCE OF THE PURCHASE PRICE
• for EACH DAY OF DEFAULT

Question 5

What thought process needs going through for calculating compensation for late completion?

Answer 5

• Contractual completion date?
• SCPCs unamended?
• Price
• Deposit
• Contract rate? (4% above base rate - so IN ADDITION to base rate!!!!!!!)
• Barclay’s Bank base rate?
• When does completion actually happen?

Question 6

What is ‘deemed’ completion?

Answer 6

If SCPC 9.1.2 is unamended completion is to be by 2pm on agreed date. If it is beyond 2pm it is DEEMED to have been completed the following WORKING day.

So, if a delayed payment has taken place at 3pm on a subsequent day, then completion will be deemed to have taken place on the following day!

Question 7

How do you count default? i.e. liability under 10.3

Answer 7

You INCLUDE the day COMPLETION DUE but NOT day finally complete UNLESS completion happens post ‘deemed’ completion of 2pm

Question 8

If completion occurs post ‘deemed’ time of completion is the date of completion altered in the contract?

Answer 8

No - so if the party defaults in completing at say 3pm on 10th Jan, completion will be 10th Jan, but for purposes of calculating compensation ONLY since it is beyond ‘deemed’ completion this will add to compensation due.

Question 9

How do you calculate the daily rate under 10.3.1?

Answer 9

Balance divided by 365!!! x contract rate!!!!

Question 10

Under what SCPC can a non-defaulting party make time of the essence? And how long is this? What is the effect of this?

Answer 10

• 9.8.1
• 10 working days
• Post 10 working days - servor of notice has right to rescind!
• Pressure for buyer to come up with money, as well as compensation!

Question 11

What remedies are there if 9.8.1 does not result in completion?

Answer 11

SCPC 10.5

• Right to rescind, claim deposit and damages and to re-sell the property.

Question 12

What happens in cases of Misrepresentation?

Answer 12

SCPC 10.1

• Material difference (e.g. dilapidation of fence) (omission or recklessness= damages)
• Substantial difference - recklessness or fraud = right to rescind (e.g. non-disclosure of lease)

Question 13

Make sure you get:

Answer 13

How to calc comp.
Notice to complete procedure.
Misrep.

Question 14

If seller rescinds what are they no longer entitled to under the contract?

Answer 14

If the seller rescinds they can no longer claim contractual compensation. But they can claim damages.

Question 15

If fact pattern states that an owner has died what must you make sure of?

Answer 15

If they were JT or TIC!

If JT legal AND equitable title will pass to the survivor so no need to appoint 2nd trustee to dispose of interest!

n.b. if married highly unlikely to be TICs!