Active discussions

Meet the Other Phone. A phone that grows with your child.

Meet the Other Phone.
A phone that grows with your child.

Buy now

Please or to access all these features

Talk
Legal matters

Mumsnet has not checked the qualifications of anyone posting here. If you have any legal concerns we suggest you consult a solicitor.

Original poster

delaying completion for 12 months.

31 replies

trimtops · 30/07/2019 19:44

my buyer came and knocked on my door 2 weeks ago to ask if she could buy my house
she viewed it in March, loved it but couldn't access her funds
i then took the house off the market, and out of the blue she came round and i said she could buy it.

However, she can't access her funds until 2020.
But will exchange contracts in a month, hand over 10% to my solicitor, and then move in and pay rent, and then complete the purchase, as i say late 2020.
Now I trust my solicitor to oversee the purchase, but I want to ask a silly question and am too embarrassed to ask him

My question is, if anyone can help...why does he get to keep the 10% deposit as he has told me?
Why is it not given to me after we exchange contracts.

OP posts:
AlwaysCheddar · 30/07/2019 19:54

I wouldn’t get involved in this. Why wait over a year??

Original poster
trimtops · 30/07/2019 19:59

AlwaysChedder - her money is tied up in bonds until 2020. She will lose a lot of interest if she takes it out.

Another question I might ask is why can't she borrow against the bonds - I've only just thought of this!

OP posts:
SushiGo · 30/07/2019 20:00

I really think this is a terrible idea. What if she doesn't complete on the deal?

CruellaFeinberg · 30/07/2019 20:01

hahahaha! is what you said!

AuntieAvocado · 30/07/2019 20:03

He keeps the deposit because if you fail to complete, the buyer gets the deposit back. So it needs to be kept safe and protected until completion.

That’s normal I’m afraid. Worth asking the lawyer what interest rate they will be getting (you’ll get the interest eventually) and to put the money in a high interest account (not their normal accounts) as it will be locked away for a while.

MzHz · 30/07/2019 20:03

Her problem

She’s not in a position to buy, put your house back on the market and just ignore her until she can stump up the cash

Original poster
trimtops · 30/07/2019 20:19

SushiGo - she will be locked into the deal, she loses her deposit. She has written to say she completely agrees with this.

Auntie if she fails to complete then she loses the deposit. That is also locked into the contract. Then I get the 10%

OP posts:
Jaffacakebeast · 30/07/2019 20:34

But you could also get stuck with a tenant :/ I’d just tell her to come back in 2020 & see if you’re still selling, unless you think house prices are going to drop massively?

Original poster
trimtops · 30/07/2019 21:07

Jaffacakebeast the tenancy agreement will be for 6 months, then roll into a periodic. She will be issued a S21 2 months before the date of completion. If she doesn't complete by the next day, then she will have to leave anyway.

For reasons I can't divulge - it is better to sell now.

OP posts:
LIZS · 30/07/2019 21:11

But if she damages it in the meantime you would still be liable for any repairs. 10% deposit plus rent may be cheap and risky. Her looking to move without funding available is her problem, not yours. She could get a mortgage and pay it down when she has funds released.

Original poster
trimtops · 30/07/2019 22:08

LIZS The deposit on exchange in the next 3 months is £45k. This deposit will be locked in tight and non-refundable. If she fails to complete in 2020 she doesn't get it back.
The tenancy agreement will certainly include that I will forfill my landlord duties, but will not extend to any extras, nor will I grant permission for changes 'as she is buying it anyway'
And I agree with your last statement, to borrow against her funds. Tis on my list for my lawyer tomorrow.

OP posts:
Jaffacakebeast · 30/07/2019 22:33

I wouldn’t go near this situation tbh, I’m to a ‘what if’ type, what if you end up needing to take her to court, force her to leave after months of no rent and she wrecks your home

prh47bridge · 31/07/2019 01:09

if she fails to complete then she loses the deposit. That is also locked into the contract. Then I get the 10%

That is correct. If she fails to complete she loses the deposit. But if you fail to complete, e.g. by deciding not to sell the house to her, you lose the deposit. Therefore your lawyer holds the deposit until completion. Auntie is absolutely correct.

hadthesnip2 · 31/07/2019 01:40

I wouldnt do it. No idea what type of "bonds" she is holding but I'm assuming some fixed interest deposit based ones. Cant think she's getting much above 2.5% on them so she wont be losing much if she accesses them now, instead of a years time.

Say brexit happens & everything goes better than anyone expects. House prices start to rise & in a years time they've gone up 5%. She's won both ways. Has her 2.5% interest on her money & buys a house 5% cheaper than its now current value.

RebootYourEngine · 31/07/2019 04:21

I wouldn't get involved in this. If she refuses to leave and stops paying rent it could cost you a lot of money in court fees and bailiffs to get her out. Then you might need to spend even more doing the house up if she has trashed it.

Monty27 · 31/07/2019 04:28

This sounds ropey

PoppingOneOutIn2020 · 31/07/2019 04:42

So she will move in for a year, pay you rent.

Pull out of the deal, fuck you over, claim squatters rights in your home because shes been there a long time.

Absolutely terrible idea.

AuntieAvocado · 31/07/2019 07:48

Yes as prh47bridge says, my point was that if YOU fail to complete then she gets her deposit back. That’s why your solicitor holds onto the money, so there’s no chance you spend it all and vanish.

If SHE fails to complete then you get the deposit.

I wouldn’t be concerned about squatters rights, she’ll have a formal tenancy in place so that doesn’t apply.

But you would need to be clear on your responsibilities as a landlord, and on how you’d go about evicting her if it came to it. Tbh it sounds like more trouble than it’s worth.

Flyingsouthwiththeswallows · 31/07/2019 08:09

I think you should ask her how much interest she will lose by surrendering the bonds early?

Given current interest rates it will be a very small amount. Even losing 180 days interest at current rates will cost her less than all this faffing around.

If she refuses to lose a relatively small amount of interest then I would be very suspicious of her intentions.

If you let her rent it I would also consider the potential of her changing her mind about the house. It is only when you live somewhere that you see all the issues. She could become very difficult about completion if she was unhappy about something and could start insisting that you upgrade things or put them right during her rental period.

NoSquirrels · 31/07/2019 08:16

For reasons I can't divulge - it is better to sell now.

But you won’t have! You won’t have sold until 2020.

Think of the amount of gazundering that goes on in a ‘normal’ deal. Then imagine she’s lived there for a year and had ample opportunity to think about ALL the things that aren’t quite ideal...

No way I’d get involved in this. If she wants it bad enough then she needs to find a way to pay.

GreenTulips · 31/07/2019 08:20

Are you happy to be a landlord?
Have you somewhere to go you can afford without the sale of this property?

RB68 · 31/07/2019 08:25

You get the deposit whatever happens - so if she fails to complete that deposit comes to you not the solicitor

If she does come through in terms of the sale the deposit money is added to the money transferred to you upon sale (Usual to go via solicitor)

RB68 · 31/07/2019 08:29

gazundering after exchange is unusual and only generally if the amount is excessively more than the deposit - as once exchanged that is a promise to buy in law so deposit goes to buyer. We are talking 45k deposit here she is unlikely to walk away after 10 mths and 2 mths s21 notice.

In fact if it goes pear shaped the lawyer is liable as it means they haven't tied it up legally.

Personally I would want more than the 10% deposit and or a premium on the rent to cover other expenses such as meeting regulations for gas and fire safety and landlord insurance etc to reflect the odd situation.

TheRedBarrows · 31/07/2019 08:53

“Given current interest rates it will be a very small amount. Even losing 180 days interest at current rates will cost her less than all this faffing around.”

That isn’t how bonds work, and she seems to be talking about over £400k worth, so if it is the growth on a 5 year or longer term bond it could be considerable.

OP, if your solicitor is confident the risks are closed off, you have her £45k as an insurance against any shenanigans of hers as a tenant or failure to complete (in addition to the normal landlords deposit against damage, rent etc) and her solicitors have provided proof of her future funds, then if it suits you to have the rental income and a secured Daley, then I would go if it.

I can’t see that she is more of a risk as a tenant than anyone else, if letting the house suits you.

The risk is hers in the event that house prices fall.

Will you have saved EA fees too? N.B if they introduced her or showed her round or she was in their books when you first marketed it they might come to you for a fee!

crabbyoldbat · 31/07/2019 08:56

Don't forget you'll need landlord insurance and to declare the rental income for tax. Any rent needs to cover this as well as the mortgage etc. Does your mortgage provider allow you to rent? They'll need to be told/asked. Unless you own outright, of course.