First home completion issues

[becoco]

My husband & I put an offer in for our first home back in March this year. We had moved back to my parents house with our toddler to save for the deposit. Our offer was accepted under the condition that we would wait to complete for 6 months in order to give the seller time for her new build to be finished. We really wanted the house & we were happy to wait a few more months as it meant we could save a bit of extra money in the meantime. We had both verbal & written agreements with the seller that our latest completion date would be 30th October, even if her new build wasn't ready.

We were unexpectedly hurried by the seller & the estate agent for an early exchange in May, still wanting to exchange by the end of October. I was annoyed by this because it meant I had to hand over my full deposit, but on the bright side it meant our house purchase was secured.

In order to exchange we had to apply for our mortgage, which was approved & had an expiry of 3rd November. Our contracts were exchanged with a termination date of 30th October.

Now we are in October & my husband emailed to estate agent to find out if we are any closer to completion as the seller's solicitors should be giving us notice soon in order to complete on 30th. The estate agent wrote back saying that their solicitors are under the impression that the 30th is not our latest possible date of completion, but that they can actually give us notice up to that date. This would mean we would exchange around 9th November & our mortgage would have expired! We have informed our solicitor who insists that our contract says that 30th October is the final date if completion & is now trying to sort things out with their side.

I am so angry & feel as though we have been completely taken advantage of throughout this entire process. We exchanged early, lost out on all the interest we would have earned on our deposit, paid for months of home insurance on the house, waited an entire 6 months to move out of my parents house & coming up to the very end of it all, they are trying to push the date back even further.

I just want to know if anyone can tell me where we stand on this? What happens if their solicitor doesn't give us notice in time & our mortgage expires?

I don’t really understand this. When you Exchange contracts you agree a Completion date & I always thought that was non negotiable. My understanding though I’m not a solicitor is that anyone who doesn’t stick to the completion date has to pay a big financial penalty.

I don’t know how their solicitor can be under any misunderstanding as the date should be on the contract they exchanged. Though I’ve never heard of someone Exchanging in May on a property they won’t move into until 5 months later. Normally there is only about a month or less between Exchange & Completion.

I think you need to discuss it again with your solicitor tomorrow.

They'll have agreed to completion on notice with a last date for completion agreed. Or not, given the issue which has now arisen.

This is all down to your solicitor. They should not have allowed exchange to take place with a long-stop completion date that goes beyond the expiry of your mortgage offer. (If that is indeed what has happened)

Forget talking to the agent at this point, they won’t have seen the exact dates on the contract at exchange.

Either the agent is misinformed and confusing matters, or your solicitor has messed up. You need to speak again with your solicitor to get some clarity.

Even if your solicitor is the one who's right, I think your vendors hold all the cards here, unfortunately. If they let the date lapse, the usual next step would be to serve a completion of notice - which would then take them into the time frame they're wanting anyway. I'd look into a back-up plan for your mortgage - start by asking your lender if they'll extend your expiry date by a couple of weeks.

Read the contract you signed (which will be what has been "exchanged"). This will tell you who is correct.

The contract signed by the buyer is usually returned to the solicitor undated.

DS had a similar situaton. His lender agreed to honour the mortgage offer for another month, so thats worth a try.
However his solicitor pushed very very hard and insisted that completion happened before his original mortgage offer expired, even if someone went into rented. There was a new build at the top of the chain and he was a FTB . He made it with 3 days to spare. The solicitor was a bit wary as there were messages coming down the chain asking when mortgage offers were expiring so she thought the builder was spinning it out.

I wouldn't listen to anything the estate agent tells you. Your solicitor is the only one who can advise on the terms of your contract. Try not to panic and speak with them first thing tomorrow.

Our solicitor got us a six week extension on our mortgage offer last year, we ended up having to pull out of our sale as they went past the new expiry date too, but you should be able to get an extension

Thank you so much to everyone for your replies.

The contract states:

In the event the sellers solicitors fail to serve notice on the buyers solicitors to complete by by close of business on the termination date (30th October) the buyer may rescind the contract.

I don't know how the sellers solicitors think they can drag it out any longer?!

I know it's unusual to wait so long between exchange & completion, but we had always made it very clear completion was to be end of October absolute latest, & our solicitor has known the date our mortgage expires from the beginning so I'm finding it hard to believe she would have made such an error!

You need to ask your solicitor to remind the chain of the agreed long stop date from when your exchanged, then send a copy of it to the estate agents.

Ask your solicitor for the chain to confirm what the completion date will be also.

The contract snippet you provided is clearly worded to suggest completion must be by 30th October, your solicitor will be able to verify other clauses. I would email both the agent and solicitor to emphasise that this is your understanding at that you have an expiring mortgage offer. I would add that you won't be applying for a mortgage offer extension as you have already waited as long as you felt was reasonable. This should sharpen minds.
I kind of disagree with previous poster who said the vendor holds all the cards (although its correct to point out that they have up until now). In fact they will probably know that the price you agreed to pay early this year would be higher than they could currently achieve if they allow it to fall appart. They should also be aware that you wouldn't be able to get the same lender rate if your mortgage offer expires. I would be preparing to push back and refuse if they ask you to apply for a mortgage offer extension. It's worth remembering that if the vendor fails to complete you can expect to get all your legal fees back from them, and of course your deposit. Stand firm on the date, they will find a way to get it completed.

I agree with @DrySherry that you should be tough about this @becoco

Just tell your solicitor and the EA today that you will not be applying for a mortgage extension as you are all ready to Complete by the 30th October as agreed by everyone when you Exchanged contracts. Threaten to pull out if they try to muck you around any further.

@DrySherry @Twiglets1

Thank you for your replies.

I am fuming about the whole situation & I definitely do not want to extend my mortgage offer when we have been so patient & understanding for 6 months! We have lost all interest we would have gained on our deposit & paid home insurance in that time & I just feel like we are being completely taken advantage of. I absolutely can see from the contract that the completion date should be 30th October latest, so I can't understand why the sellers solicitors feel they have a leg to stand on in arguing otherwise!

I will be on it today. Thanks again.

I haven't bought for many many years so don't understand - why are you having to pay home insurance? It's not your house yet.

You insure the building from exchange as it becomes your liability at that point (because you're committed to buy it, even if it burns down).

It sounds like the buyer cannot complete on the new build without selling their current house, so they need you as much as you need them. They are probably being dicked around by the house builder who keeps moving the goal posts.. but, they will probably have to vacate and find somewhere to stay temporarily when push comes to shove. The best scenario for them is delaying completion, but will they lose your sale to do so?

Good Luck today @becoco and stick to your guns.

Yes, your seller is probably being dicked about by the house builder as suggested by @TiredandLate but that falls into the category of Not Your Problem.

So far, you have sucked up all the cost and inconvenience of such a big gap between Exchange & Completion. If your sellers now have to cope with a bit of the same to keep their buyer then that is what they will have to do.

Although as you've exchanged it will come down to who breaks the terms of the contract, so back to your solicitor for a rock solid answer on all the what ifs.

It's no doubt down to the fact that their new build is not ready. But this is their problem and they will have to complete the sale and move into temporary accommodation until they can move into their new build.

If your contracts stipulates the long stop completion date then yes you must press hard with your solicitor to make sure this is achieved.

This. Even if your solicitor is the one in the right, your vendor missing the date doesn't automatically mean the deal is off - the next step would ordinarily be a notice to complete within two weeks of that point. Which they want, but you don't - and if your mortgage has expired, you can't. You don't want them using that to claim that you're the one who's breached the contract.

I'd really urge you to look at trying to secure an extension to your mortgage for your own sake - even if you have no intention of going into that extension period, it's in your own interest to keep it open as an option. No need to make your vendor and estate agent aware you've done it - you can still stand firm on needing to complete by end of October as far as they're concerned.