Delay on completion day and you may face financial penalty
limits within which the purchase monies are to be received by the seller’s conveyancers. The Law Society’s current conditions are the Standard Conditions of Sale 5th Edition. The majority of conveyancers use the current 5th Edition. Completion of the purchase is governed by Conditions 6 and 6.1.3. (b) and requires the funds to reach the Seller’s conveyancers bank account by 2pm on the day of completion.
Many conveyancers amend this clause reducing the completion time to 12.30 or 1pm. However, the Law Society recommend no amendments are made and this practice is supported by the Conveyancing Quality Scheme (CQS).
Assuming your purchase contract was not amended as to the completion time, then the purchase funds must not have been with the seller’s conveyancer by 2pm, creating a breach of contract. At that point the seller’s conveyancer is able to serve the Notice to Complete on your conveyancer. Under the Standard Conditions of Sale 5th Edition there is no standalone clause relating to a fee payment for the Notice to Complete although it seems the seller’s conveyancer amended the Standard Conditions to include a fee of £125 plus VAT. Interest is payable for late completion under Condition 7.2.2.
Although discouraged by The Law Society, amendments to contracts are made by the seller’s solicitors for their clients’ protection. If there is an onward purchase then the seller’s conveyancer will need to receive the sale funds prior to the time limit set out in the purchase contract to avoid default.
It is your conveyancer’s duty to you to ensure the mortgage loan funds are received by them in good time to achieve the completion within the contract time limits. Good practice is to request the mortgage funds one working day before the completion day to avoid the potential for default.
The keys to the properties are not released to the buyer until the purchase funds have been transferred to and received by the seller’s conveyancer.
Accordingly, your seller will have been waiting outside his new home with the removers and, due to the late completion, unable to access the property until late afternoon. I suspect your seller will have incurred additional removal charges, which in theory form a claim for damages against you. The amount payable for damages will be over and above the interest for late completion. The delay in the transfer of funds has implications resulting in financial penalties.
Your conveyancer should have arranged for the funds to be transferred enabling the completion of your purchase within the time limits set out in the contract.
You may wish to consider raising this with your conveyancer. Essentially the breach was avoidable.
John Robson is Residential Conveyancing Manager at Ford & Warren Solicitors, Leeds.