Property law 5 - Failure to complete

Question 1

How is interest calculated if there is a failure to complete?

Answer 1

At the contract rate. If there is no rate specified, at the Law Society interest rate.

Seller late = seller pays interest on full purchase price

Buyer late = buyer pays interest on the purchase price less any deposit paid

Question 2

Is there a financial remedy for failure to complete other than interest?

Answer 2

Yes - common law damages. If the buyer is successful, the interest is deducted from the claim.

Question 3

Are there remedies other than financial remedies for a failure to complete?

Answer 3

Yes, Rescission. However, under a standard contract time is not of the essence.

Question 4

What is the process for rescission?

Answer 4

• The non-defaulting party serves a ‘notice to complete’ on the other party.
• This makes ‘time of the essence.
• The parties must then complete within 10 working days (excluding the day on which the notice was given).

Question 5

Can a notice of recession be withdrawn and, if so, how?

Answer 5

Yes, requires the agreement of both parties.

Question 6

What are the SELLER’s remedies of rescission?

Answer 6

• forfeit the deposit and any interest accrued on it,
• resell the property and any contents included in it
• claim contractual damages