Has anyone successfully pursued costs incurred for failure to complete?

[KatnissMellark]

Our buyers failed to complete on purchase of our property over a year ago (it completed the following week, and date had been agreed at exchange of contracts over a week prior) resulting in storage, redelivery and sundry costs. We've been trying to claim these since and now a date has been set for a hearing at small claims court. It's all been funded through legal cover via house insurance so far but I'm wondering how likely we are to be successful and if anyone has gone through similar before?

I take it cstaff isn't actually a solicitor...

It sounds like a straightforward case. Your insurers wouldn't be footing the bill if it weren't. Good luck.

And herein lies everything that is wrong with the whole house buying/selling process in England. I agree with MummaGiles. On exchange, a legally binding contract is formed and specifies the date on which Completion must take place. If that date is breached then the buyer is 100% at fault for failing to keep to the conditions of the contract, whether it's actually their fault, their solicitor, lender etc. Why oh why would anyone agree to let it go? Never mind the stress and upheaval that this involves, no one should be out of pocket for someone else's failure to comply to a legal agreement. What a load of bo**ocks. I would absolutely pursue it otherwise it sets a precedent. Good luck.

Oh and cstaff, I really hope you don't work for the firm of solicitors that is handling our sale and purchase as it sounds like you haven't got your head around the basic concept of a legal contract yet. It is legally binding. End of. With a date for completion written in stone. That's all. Shakes head in dismay and slopes off to pour a glass of wine.

There are so many things involved in the completion of a conveyance.

The money has to come through from the bank or the purchaser
The life insurance has to be in place
The home insurance has to be in place
The mortgage documentation could be delayed
And yeah the solicitor on either side could mess up

And you can multiply this by 3 or 4 if you are dealing with a chain of buyers and sellers.

That's not the issue here though cstaff I think everyone who has sold or purchased is aware of the many processes involved. But that should all be in place before exchange, because once contracts are exchanged, the date for completion is not a moveable one. This is what is pissing me right off now. In our chain everyone agreed a completion date. But we haven't exchanged yet because people are now fannying around doing things that they should have done before they agreed a date. Until we exchange, that completion date could effectively change despite everyone in the chain tentatively working towards it, getting removals booked, taking time off work etc. It just messes with peoples lives. It's a sh*t system and I never want to do it again. Ever!

@Herecomethedaffodils
I am not disagreeing with you. I went through something similar when I bought my own house.

My point is that I have never heard of anyone suing anyone over this and also who would you sue because it could be anyone of the parties that I mentioned above or someone that I have forgotten to mention. Also the fact that they are going through with this a year later seems a bit crazy to me and all over a weeks delay.

@cstaff we started the process to recover costs immediately after completion. It's the buyers faffing and delaying tactics which mean it has taken this long. Believe me I've got better things to do and wish this was over.

And of course we're suing the people we had a contract with...are you sure you're a lawyer?!?

Well good luck. I would be really interested to know how this ends up.

As @Herecomethedaffodils says, this was a delay AFTER exchange and BEFORE completion. Lots of us have had delays on exchange dates which aren't legal unless you've signed a doc to state a date (new builds) but very few of us have had the actual completion date delayed.

When we moved the seller's solicitor couldn't be located and our completion looked dodgy for a while. The seller was in a right state because we could claim costs as you are. Thankfully the solicitor showed up at the last available moment to finalise it all and it went ahead.

Good luck OP. Do let us know how you get on. My feeling is that you will get full costs awarded.

I am a legal assistant in a conveyancing solicitors, so not a solicitor. However, I agree with everything MummaGiles said. It should be the solicitor who acted for you who would serve a failure to complete notice on the seller's solicitor, and they in turn would serve notice on their seller's solicitor if there was a further link in the chain which messed up. Of course you should pursue it, you had a completion date set in stone and the guilty party are in breach of their contract. The contract sets out the percentage over base rate that would be applicable for situations like this. Providing the seller's solicitor agrees the figures/receipts you have provided, they should be actively dealing with this. It is not a quick process though.

By all means take it to court you will probably get a ccj doesn't mean you'll get the money out of them.

They might not have the money to pay the costs as well as the costs of the insurance lawyers which will be heaped on top.

I'm am a solicitor and delays do happen . Usually the interest is added on. £2000 of storage costs does seem.excessive.

Usually the contractual time is 1 or 2 pm so if the money wasn't through by then you wouldn't have been in breach of contract for not vacating the property that evening so not sure why you were advised that. You need to be sure that you mitigated your losses as much as possible

@Spickle @Blankscreen
I am just curious to know if either of you have been involved in or witnes to a case that was late completing whereby either side sued the other and won. I know what is in the contract about c.10% interest etc but it is usually the case that they are just relieved to close whether it is 1 day or 1 week later.

Yes there have been one or two cases over the last few years. I don't believe they went as far as court though. I believe the defaulting parties managed to get some recompense though there was a lot of batting backwards and forwards over the amount requested.

It happened to me. Deposit paid by buyers at exchange but they told us the day before completion that they didn't have funds to complete.

Our solicitor served them 10 days notice.

We almost lost the house we were buying and had already given up school places in the location we were moving from after exchange.

Most stressful thing ever.

I would have definitely taken them to court but thankfully didn't need to as they paid costs plus the percentage above base rate interest on the amount they owed.

It is legally binding and to anyone who is saying that delays happen all the time, it is very rare after exchange. Our solicitor had dealt with over 20000 sales and we were only the 2nd time he'd seen it. In the other case, the purchaser died between exchange and completion which is perhaps the only acceptable excuse!

How utterly stressful for you. I just don't understand how it can get to/be allowed to get to that stage. I thought the solicitors job was to check that the funds are fully available for the deposit and balance and would only allow exchange to happen if they'd checked all monies to be in order. Also who in their right minds would exchange, pay 10% deposit knowing they haven't got the balance to complete and that they would therefore stand to lose the deposit!? I can only imagine they were banking on getting further funds from somewhere that didn't materialise but again the solicitor shouldn't have allowed it to get to that stage. Crazy, crazy system. Glad everything worked out for you in the end.

Why do you assume that the solicitor shouldn't have allowed it to get to that stage Herecomethedaffodils? Source of funds is checked - the problem isn't usually that funds are not available, but that they are not transferred to the solicitor's client account in time. Buyers do need to take responsibility. What about buyers who provide their 10% deposit for exchange, but then don't transfer the remainder on completion (those have a higher deposit or have mortgage monies coming that are not quite enough to meet the purchase price without a top up), or cash buyers with cash in the bank who send money too late, or by cheque? Then a delay in transferring monies from one solicitor to the next solicitor is delayed, people are then late getting the keys and in a long chain, the last few people don't complete because the monies were sent too late to the next solicitor that day.

It's really very rare for things to go wrong, but sometimes they do. On exchange, the only deposit which has to be paid is the first time buyer at the start of the chain. The rest usually comes from the sales proceeds on completion. Exchange is when the completion date is set but the monies (apart from the first deposit) are not with the solicitor until completion - that's why a suitable gap of say at least 5 days to ensure mortgage monies are in and any higher deposits/cash purchases have time to get the monies across. The solicitor is expecting their client to process their own money transfers in good time, they have no control over when a client actually does it.

I appreciate the point you're making but as conveyancing solicitors are doing this day in and day out, I would like to think they would automatically remind their clients of the procedures ie get your money in place. Many buyers haven't been through the process before or for a number of years, so do need some guidance from those who know the system best (their solicitor) not to mention that they are paying the solicitor for that guidance and advice too. We're very fortunate that our solicitor has been excellent and has guided, advised and reminded us about what we need to do all through the process. I guess not everyone is so lucky?

Solicitors do remind their clients of the procedures, usually by email/letter and reports. That's why it's so rare.

We all know that one person who doesn't read the information they get sent, doesn't pay attention to the detail and doesn't realise that completion means everything should be in place.

Clients are guided by their solicitors but ultimately, there are some procedures that they need to do without constant handholding. Perhaps if they are paying bucket loads of money to their solicitor, they may get better handholding, but a conveyancing factory will not have the time or resources to handhold to that degree.

The fees a solicitor charges is to do the legal work involved in procuring and transferring a property from client A to client B. It is not to constantly guide a buyer through the process, especially now that so many conveyancers have too many clients to be able to do this. They will send emails/letters guiding clients what to do and to sign that they understand. Solicitors don't then check that clients actually did understand. It would be up to the client to query anything they felt unsure about.

It is not to constantly guide a buyer through the process

of course it is

especially now that so many conveyancers have too many clients to be able to do this.

shouldn't be the client's problem that the conveyancer takes on too mich work.

The way most cheap conveyancing factories works is high turnover which is why they don't have time to hand hold every client. It's not a case of having too much work it's a case of having to have such a high client number to run the business model. However if you pay peanuts you get monkeys.

For most clients conpletion works ok but sometimes it doesn't. As a solicitor you tell your client you need £x by Tuesday for example. You tell them to send by CHAPS instead of cheque etc. You can't actually make them transfer the money.