What happens if you exchange but then don't complete

[Shwish]

But it's because of something outside of your control. Like an earthquake or an accident and you end up in hospital or something completely random? Anyone know?
I'm not worrying about this happening btw. Just interested!

Absolutely no idea... sorry.

hopefully a helpful little bump though.

The exchange money is forfeit - I think the seller has the choice whether to return the monies to you if they were sympathetic (and believed you) but they are under no obligation to

Makes no difference what the reason is. You’ve exchanged contracts, you’re legally required to fulfil that contract or suffer a financial loss. In this case it would be the loss of your (usually) 10% deposit.

There should be force majeure clause in the contract.
Not sure if it would cover hospital, but certainly should an earthquake

A friend was selling a house, the buyer drew out after exchange. My friend ended up £70k richer

You lose your deposit

Ah yeah maybe a force majeure clause makes sense for something like an earthquake or sudden lockdown (thinking COVID type) or a bomb or riots so police won't allow movement. Not really sure what got me into this line of thinking really.

Yeah I know that happens if you pull out I was just thinking of it was something you had no control over. Like a police investigation and they don't allow anyone in or out of the road, say?

It's one of the reasons why you should insure the property from exchange. If it burnt down, you would still be obliged to buy it!

Legally you have to Complete after Exchange. If you don't then you lose out financially, by a lot of money

If you mean don't ever complete then you lose your deposit. If you haven't paid a 10% deposit, the selller can sue you for the difference.

The first step though is that the seller will serve a "notice to complete" which gives 10 working days to complete. The buyer has to pay the costs of the notice plus interest but that's where the seller might waive the extra costs if there is a genuine reason.

Ah right so I guess something like a police investigation is unlikely to close a road for more than 10 days so I suppose that means just interest would be payable even if you weren't let off. I wonder if the insurance would cover it anyway? I'm imagining a scenario now where you were selling (or indeed buying) one of the houses that neighboured the house the blew up yesterday (on the London news I'd you haven't seen it). So the police have ordered evacuation of the surrounding houses too for safety. I suppose the buyers wouldn't be in a hurry to move in so unlikely they'd be forcing the seller to hurry up but there could be a whole chain of others who might not feel the same.

I wonder what did happen during to people who had exchanged contracts but lockdown was announced before the completion date? I assume that it was considered a valid reason to break lockdown, but must have been incredibly stressful!

It was! We exchanged on the Friday before lock down with the aim to complete on the Friday. Then lock down was announced on Monday and we had to force it enough on the Monday and we had to move all our stuff ourselves!

Oh god @captainPugwashh how? I honestly wouldn't be able to move all of our stuff. I guess if you've been renting and don't have that much it would be do-able but hard but what if you're a big family with a houseful? I would have lost my mind.

That sounds horrendous. As if moving wasn't stressful enough!

Yeah we moved may 4th 2020, during lockdown. We found a father and son who were removal men and in a bubble together, but they couldn't get insurance from British Removals so we signed a waiver to say we accepted any loss of damages. It was all ok tho. It's all done electronically regarding comp,etion tho, so barring a power cut affecting clearing banks it wouldn't stop completion. Whether you could move it not is different.

This is why during COVID it became more common to exchange and complete on the same day - because if you got COVID you wouldn't be allowed to complete!

We completed in November 2021 having exchanged in the October and actually had a Covid clause in our contract. We were cash buyers and our vendors were buying a probate property the clause enabled them to rent the property from us for up to 10 days if they had to isolate or got covid.

My great aunt died in between exchange and completion. We did have power of attorney but even then the solicitor said he was going to have to consult one of his books as it hadn't happened before. (Was all OK in the end).

We moved October 2020 and I was terrified of us getting Covid! We moved at the end of half term and I kept everyone under house arrest that week!