completion / interest notice

M

Mel

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I've been served one of these by the vendors of the house I am buying.
We are closing tomorrow; the actual date for closing was last week, the notice served on that date, so if we close tomorrow, it is 4 days late.
It appears from the notice that the contracts were received 7th march by my solicitor, but from speaking to the mortgage people, they didn't request the cheque until at least 12th march. I wasn't contacted by my own solicitor when the signed contracts were returned from vendors, but handed over the balance of funds immediately that I was aware, unfortunately this was too late to make the closing date as funds need to sit in the solictor's account for 5 days before closing, but fortunately I managed to get them there by the time the mortgage cheque was issued.
What is the likelihood that the vendors will pursue interest costs etc for the sake of a 4 day delay, and what do they need to do in order to claim these, i.e. are they automatically added to the balance of funds?
 
How many days notice on the closing notice? Should be 28 days. Have you spoken to your solicitor about this?
 
They haven't stated, they refer to condition 40 and to the completion date per contract.
As usual my fix price solicitor is only concerned that any work from closing on is under a separate bill; he didn't call me about the notice, I received it in the post and despite speaking to the office in the interim they didnt' even mention it. I'll call him this morning.
 
General condition 40 gives you 28 days to complete from the date of the notice. So no need to panic just yet then. Within that 28 days no interest arises- only after.
 
I thought interest was chargeable from the closing date as per condition no 26?
 
My solicitor isn't available at the moment..
They also state in the letter that "interest in accordance with the General Condition has been charged on teh balance of the purchase monies from teh date of completion which continues up to the date of payment". From what you say, this isn't the case?
They also state that I am responsible for additional legal costs and expenses from serving the notice, and that they are entitle to all other remedies under the General Condition. Again, is this likely, or is it after the 28 days? If they do claim this, is it automatic or is a court hearing required?
One other - they state that the reason for not closing is due to the "default or misconduct of the purchasers" - if this were to go to court, would a delay in drawing down the mortgage cheque stand up as default or misconduct?
Again, thanks Vanilla!
 
4 days is very respectable and no sane person will persue you for interest on 4 days.
I wonder why the funds have to sit in your solictor's account for 5 days. I have never heard of this and usually present the funds on the day of closing. I think that this is a bit fishy.
 
woods said:
4 days is very respectable and no sane person will persue you for interest on 4 days.
I wonder why the funds have to sit in your solictor's account for 5 days. I have never heard of this and usually present the funds on the day of closing. I think that this is a bit fishy.
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I posted here previously about the 5-day rule (which included all fees in full) and the consensus seemed to be to accept it, so I let it go.
But it didn't seem to be anything that other posters had ever had to do either.
Whether they pursue it or not, I guess, is up to them, I'm just wondering how easy is it for them to do so.
 
woods said:
4 days is very respectable and no sane person will persue you for interest on 4 days.
I wonder why the funds have to sit in your solictor's account for 5 days. I have never heard of this and usually present the funds on the day of closing. I think that this is a bit fishy.
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It's not fishy, though it's not always a requirement either. It depends on the circumstances, especially the relative location of solicitors. If it's a face-to-face closing, your solicitor can have the cheque drawn down on a just-in-time basis and hand it over with drafts obtained by purchaser for the balance of the monies - hence, everything provided on the day. However, if it's a postal closing, your own solicitor will usually draw down the monies a few days in advance to allow them clear into their own account, and then issue a draft which has to be posted to the other solicitor in time for the closing date, as the vendor's solicitor must actually be in receipt of funds in order to close.
 
AFAIK, any cheque takes 5 days to clear, so your solicitor has to draw down the cheque to their own account, wait for it to clear, and then issue a cheque to the vendors.
 
In normal circumstances ( and assuming you havent signed a very strange contract which excludes standard Law Society conditions) if you complete within the 28 days of this notice you cannot be charged interest, costs etc.

The five days to clear the cheque is normal- it takes 5 days for a cheque to clear into your solicitors account so they cannot pay it out before then.
 
Vanilla
what's the effect of general condition no. 26 then (see my post above)?
Thanks Card
 
Hi Card, are you a solicitor? A trainee?

General condition 24/25 & 26 apply only where time is of the essence. This would have to be expressly stipulated in the contract. In most normal contracts this is not the case. Indeed the interest clause in a contract implies that time is not of the essence.

In normal circumstances then general condition 40 applies and both parties are given a further 28 days to complete from the date of service of a closing notice.
 
no my boyfriend had issues with completing a sale (waiting on funds from old house to close) the completion notice he received made reference to this condition 26 and they sought interest from date of closing, ended up paying only 50% of the interest they sought though
 
My undertstanding is that interest can be claimed from the date of the completion notice, which must be after the agreed closing date.

I think some offices have a tendency to serve completion notices as a matter of course these days - while not necessarily intending to rely on them. It does have the effect of focussing the mind.

An awful lot depends on the specific circumstances of each case: the vendors and purchasers own circumstances, the solicitors involved etc.,etc.

I am interested in this being a fixed price situation - it seems to have been quite a tricky case with lots of things going awry.

mf
 
I've visited the house again at lunchtime today and funds are being released today having now cleared. We should close tomorrow so fingers crossed now that they leave it at that. Either way it's small money at this stage.

With regard the fixed price issue mf1, I'm so disappointed in the service I've received - I had a look at the website for rating solicitors today and he has been added to the list by someone elese since early march this year. I know I have a touch of the panic merchant / drama queen about me (as evidenced by my many posts...), but the fixed price element has been the undertone to every bit of work he has done, and I've often got the impression that he is doing the least amount acceptable rather than trying to help me out in any way. If I had already bought a house I would probably know the answer to many of the questions already, but it's not a route I would recommend to a first time buyer.
 
My undertstanding is that interest can be claimed from the date of the completion notice, which must be after the agreed closing date
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No I don't agree. The wording of GC 40 is fairly clear in that it is only if the purchaser or vendor do not comply with the notice within the notice period that further enforcement or interest etc can follow.
 
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