Q On 1 March, we exchanged contacts on the house we are buying with a completion date of 27 March. However, the government lockdown meant that the seller was unable to move because the removal company cancelled the job.
We agreed to delay the completion date to 24 April. But the seller is now saying they cannot move on then either as, at 70 years old, they are in the high-risk category for Covid-19.
My flat is being sold, we have a buyer and they are ready to exchange contracts to tie in with the purchase of the house, so we do not have to pay the additional stamp duty. My husband works in the hospitality industry. His company is not generating an income and he is at risk of losing his job. We can afford the mortgage repayments on one salary, but on just my salary we would have difficulty getting a new mortgage for the house we have exchanged on.
We have no idea how long the lockdown will last and we don’t want to lose the buyer for our flat. We also want to limit our financial liabilities in relation to the exchange contract for the house we are buying.
Should we serve notice to complete on the 70-year-old seller? Are we better off forcing a move, or rescinding the contract after the notice period if the seller does not want to move?
EA
A It’s too soon to serve a notice to complete as your sellers have not yet failed to do so by the new date of 24 April that you have agreed with them. But if they don’t complete on that date, you can get your solicitor to serve a notice to complete on your seller’s solicitor. This sets a new date – typically 10 days after the day the notice is served – for completion to take place. Either party’s failure to complete by the new date entitles the other to terminate the contract and claim damages. However, if the new date of 24 April was an informal agreement, and so didn’t follow the legal process for moving completion dates and amending contracts, because your sellers failed to complete on the original 27 March completion date, you can serve a notice to complete as soon as you like.
Whether you should is another matter. According to Abby Campbell of Davisons solicitors, “in order for a notice to complete to be valid, it is crucial that the serving party is ready willing and able” to complete by the date given in the notice. So if you are relying on the proceeds from the sale of your flat to complete your house purchase, serving a notice to complete would be inadvisable. But if you genuinely are “ready, willing and able” to complete by the date given in any notice you serve, it will mean that if the seller fails to complete, you will be able to rescind the contract and get back – with interest - the deposit you paid when contracts were exchanged. What you can’t do is force your sellers to move.
