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Original poster

Advice on chain potentially collapsing

26 replies

em715 · 09/03/2022 18:36

I was hoping to get some advice on the above. Situation is there are 3 of us in the chain. Bottom is my buyer (first time buyer), me, and then the people I'm buying from (they are buying a new build). All 3 properties are shared ownership, so hard to come by in this area.

The new build developers have said that they anticipate the house being ready by 11th April, but that is not guaranteed. The people I'm buying from have decided to set a long stop completion date of 16th June just in case there are any delays to the new build.

My buyer is renting and needs to give 2 months notice. If she gives notice now, and the house isn't ready until 16th June then potentially she has a month of living nowhere. She is unsure whether her family would let her stay (if needed) for that month.

The same estate agents are dealing with all properties other than the new build. They have said that the top of the chain are not prepared to rent and are not budging on the long stop date. My buyer is debating whether to pull out as she may have nowhere to live for a month. I'm stuck in the middle. What would you do here?

OP posts:
BasementIdeas · 09/03/2022 18:41

Ask your buyer to delay giving notice for another month and offer to drop your price to compensate for the extra rent (potentially ask your vendor to split the cost?

Gettingonabitnow · 09/03/2022 18:45

I would offer to pay your buyers rent for the month she may be homeless, if she agrees to exchange. It may seem a lot but you’d easily shell that out again if the chain collapse. We suggested that to our buyers.

Ariela · 09/03/2022 18:47

Can you move out and rent?

Original poster
em715 · 09/03/2022 18:48

Do you mean ask her to delay giving her notice until the beginning of April and then pay the last month for her?

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Anomalocaris · 09/03/2022 18:49

Assuming you're in England/Wales (don't know law for elsewhere), tenants are only required to give one months notice, not 2.

Original poster
em715 · 09/03/2022 18:49

@Ariela I have 2 children whereas my buyer is a woman on her own so I'm not sure how easy it would be for me to find somewhere to rent for just a month.

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Original poster
em715 · 09/03/2022 18:51

@Anomalocaris Yes am in England but I'm being told she definitely has to give 2 months notice!

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DelphiniumBlue · 09/03/2022 18:51

Your buyer would always have had a problem - most people would not give notice until they have an exchange of contracts, and it is very rare that completion would be 2 months after exchange.
If you re-negotiate the price , that will affect your mortgage offer and the lender would have to approve the change.
The simplest way round it is to pay for the buyers temporary accommodation if it turns out is needed, or go into short term accommodation yourself and complete on the sale before the purchase is ready.

throughtheair · 09/03/2022 18:53

I'm surprised your buyer would want to give notice on her tenancy until you've completed anyway. We're FTB renting and definitely won't be telling the landlord until we have the new keys!

Also, in England it's one month notice on a tenancy if you're here. So I would suggest she complete then give notice and use that as a useful month for moving.

SeasonFinale · 09/03/2022 18:53

Your buyer should speak to her landlord. If I were a landlord in that situation I wouldn't care if she gave notice but said she couldn't give an actual leaving date until date of exchange. That way I would be aware she was leaving so would know that I would soon be looking for a new tenant. As long as there isn't a same day exchange and completion.

Original poster
em715 · 09/03/2022 18:55

We were supposed to be exchanging tomorrow!

If I pay for my buyers rent for a month then I'd also have to pay for my furniture to be stored for a month.

I don't have a mortgage anymore so am technically a cash buyer.

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FinnulaFloss · 09/03/2022 18:58

The simplest way round it is to pay for the buyers temporary accommodation if it turns out is needed, or go into short term accommodation yourself and complete on the sale before the purchase is ready

Even simpler than that is for the op to tell her buyer not to give notice until next month and to offer to cover the cost of the last, unoccupied part, should completion occur before June - up to 8 weeks rent max I suppose.

In your shoes op I'd approach the sellers of the one you're buying and tell them that the chain is at serious risk of collapsing and that if your buyer pulls out, so will you - and ask them to agree to split the potential cost of this with you.

FinnulaFloss · 09/03/2022 19:00

If I pay for my buyers rent for a month then I'd also have to pay for my furniture to be stored for a month

Why? You'd all just stay put until completion wouldn't you?

Original poster
em715 · 09/03/2022 19:05

@FinnulaFloss Oh yes sorry, I understand now!

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throughtheair · 09/03/2022 19:07

This really should be a non issue for your buyer. Rent is paid in advance and mortgage is paid in arrears, as I understand it her first mortgage payment would be the month after you complete, so she wouldn't be paying double (assuming she can just give a month's notice - landlords have to give tenants 2 months, is that where the confusion has arisen) this really isn't a reason for the chain to collapse!

Original poster
em715 · 09/03/2022 19:34

I guess my buyer is worried that either she gives her 2 months notice now, the house isn't ready until June and she then has to live somewhere else for a month, or she gives notice now and the house is ready on time so she'd have to pay rent on her current house for one month and also the rent on my one (it's shared ownership).

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SeasonFinale · 09/03/2022 19:38

But she won't have nowhere. She can overstay. She notifies landlord ahead can't move out until a different date. Even if he wanted to evict her it would take far longer than the 2 months. She really should just talk to the landlord. I really don't think it is an issue at all

LittleSnakes · 09/03/2022 19:43

There’s no way I’d give notice until I had the keys given to me. Even if it meant paying twice for a month.

Moancup · 09/03/2022 19:53

Your estate agent needs to have a talk to the buyer. She’s being slightly unrealistic to not accept that there’s always uncertainty and the prospect of doubling up on costs for a bit. And has she even tried to negotiate a shorter notice period with her landlord?

Original poster
em715 · 09/03/2022 20:15

@Moancup I'm not sure if she has to be honest. The estate agent said she'd ring me first thing in the morning after she's spoken to my buyer.

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Original poster
em715 · 10/03/2022 11:10

Update: buyer has agreed to long stop completion date however the developers of the new build have withdrawn the plot this morning as exchange was taking too long!

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LittleSnakes · 11/03/2022 07:38

Oh no, so what does that mean for you?

Original poster
em715 · 11/03/2022 09:11

@LittleSnakes My vendors have lost their onward purchase so I've now lost mine too!

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Thistooshallpsss · 11/03/2022 09:19

I’m sorry op. To be honest the issue was the long stop completion which is the responsibility of your vendors and I don’t think they should expect to push the uncertainty of this down the chain but of course it all depends who has the upper hand in any negotiations. Good luck with finding another property.

Original poster
em715 · 11/03/2022 10:18

@Thistooshallpsss I agree. It was my vendors that insisted on a long stop date and refused to budge.

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