Non completion help
Discussion
Hi guys, following on from my topic here - http://www.pistonheads.com/gassing/topic.asp?h=0&a...
I thought the question might be better placed here.
I won a property at auction in November last year and as the 28th day fell on Christmas a completion date was set as the 22nd of January but we have still not completed. My understanding is that the sellers solicitors instructed the property's to go to auction assuming he would have probate on the deceased estate sorted.
So here I am.
Mutterings have come from the sellers solicitor that probate might be completed next month however that was also said back in April.
The contract is a standard agreement for sale by auction (incorporating the standard conditions of sale(Fifth edition)) and having a good read there are conditions relating to compensation for late completion.
7.2 Late completion
7.2.1
If there is default by either or both of the parties in performing their obligations under the
contract and completion is delayed, the party whose total period of default is the greater is
to pay compensation to the other party.
7.2.2
Compensation is calculated at the contract rate on an amount equal to the purchase price,
less (where the buyer is the paying party) any deposit paid, for the period by which the
paying party's default exceeds that of the receiving party, or, if shorter, the period between
completion date and actual completion.
7.2.3
Any claim for loss resulting from delayed completion is to be reduced by any
compensation paid under this contract.
With a completion date of 22nd of January we are now 27 weeks (182 days) past that date!!!!
I believe that we might be able to seek compensation in the form of the interest rate set by the law society (also stated in the contract) currently at 4.5%; however im unsure what that can be applied to?
Our deposit of £10,700 (26 weeks @ 4.5% circa £250)
Total purchase of £107k (26 weeks @ 4.5% circa £2460)
Outstanding balance of £96,505.08 (26 weeks @ 4.5% circa £2120)
Total costs incurred to date are £2422 in funding that could have been deferred and circa £500 in lost income from the deposit investment.
I obviously dont want to go down the route of expensive litigation so im trying to come up with a reasonable figure with which to approach the sellers and suggest a reduction in selling price.
There appears to be no apparent get out clause or time extension in the contract other than no claims can be made after completion.
I thought the question might be better placed here.
I won a property at auction in November last year and as the 28th day fell on Christmas a completion date was set as the 22nd of January but we have still not completed. My understanding is that the sellers solicitors instructed the property's to go to auction assuming he would have probate on the deceased estate sorted.
So here I am.
Mutterings have come from the sellers solicitor that probate might be completed next month however that was also said back in April.
The contract is a standard agreement for sale by auction (incorporating the standard conditions of sale(Fifth edition)) and having a good read there are conditions relating to compensation for late completion.
7.2 Late completion
7.2.1
If there is default by either or both of the parties in performing their obligations under the
contract and completion is delayed, the party whose total period of default is the greater is
to pay compensation to the other party.
7.2.2
Compensation is calculated at the contract rate on an amount equal to the purchase price,
less (where the buyer is the paying party) any deposit paid, for the period by which the
paying party's default exceeds that of the receiving party, or, if shorter, the period between
completion date and actual completion.
7.2.3
Any claim for loss resulting from delayed completion is to be reduced by any
compensation paid under this contract.
With a completion date of 22nd of January we are now 27 weeks (182 days) past that date!!!!
I believe that we might be able to seek compensation in the form of the interest rate set by the law society (also stated in the contract) currently at 4.5%; however im unsure what that can be applied to?
Our deposit of £10,700 (26 weeks @ 4.5% circa £250)
Total purchase of £107k (26 weeks @ 4.5% circa £2460)
Outstanding balance of £96,505.08 (26 weeks @ 4.5% circa £2120)
Total costs incurred to date are £2422 in funding that could have been deferred and circa £500 in lost income from the deposit investment.
I obviously dont want to go down the route of expensive litigation so im trying to come up with a reasonable figure with which to approach the sellers and suggest a reduction in selling price.
There appears to be no apparent get out clause or time extension in the contract other than no claims can be made after completion.
Edited by barryrs on Wednesday 23 July 12:10
Thank BV.
Would a notice to complete need to be issued prior to a compensation claim or is the current breech of contract sufficient?
Sorry if that's a dim question but I've spent so long googling I've confused myself.
I have spoken to my solicitor and am awaiting a formal response; as I've been very relaxed due to other projects I've not asked him to look at the situation in any depth before now.
Would a notice to complete need to be issued prior to a compensation claim or is the current breech of contract sufficient?
Sorry if that's a dim question but I've spent so long googling I've confused myself.
I have spoken to my solicitor and am awaiting a formal response; as I've been very relaxed due to other projects I've not asked him to look at the situation in any depth before now.
One for your solicitor to answer. I would assume it means that contractual compensation must be factored into completion and not claimed afterwards. Any claims for damages afterwards must take the contractual compensation into account. (Your actual loss might be greater than the contractual loss and you might ask a court to correct that -- although if the payment for default is part of the contract, that sounds like hard work).
In my case, the contractual compensation at the standard rate will form part of the completion statement and payment. There's always a totting up in these things -- purchase price, bit of this and that, solicitor's fees, stamp duty, contractual compensation, etc etc.
In my case, the contractual compensation at the standard rate will form part of the completion statement and payment. There's always a totting up in these things -- purchase price, bit of this and that, solicitor's fees, stamp duty, contractual compensation, etc etc.
Well this saga is still ongoing and we are around 36 weeks past the contracted completion date!!!
We have reserved the right to seek compensation upon request to complete the purchase in accordance with the contract however we are simply meet with a wall of silence which is rather frustrating.
I have learned that one of the properties from the same estate that sold on the same night is now going back to auction in 3 weeks.
This suggests that the probate is sorted as i really cant imagine the sellers solicitor would ok it for sale again without it but nothing would surprise me now.
What a complete and utter cock up from the start.
We have reserved the right to seek compensation upon request to complete the purchase in accordance with the contract however we are simply meet with a wall of silence which is rather frustrating.
I have learned that one of the properties from the same estate that sold on the same night is now going back to auction in 3 weeks.
This suggests that the probate is sorted as i really cant imagine the sellers solicitor would ok it for sale again without it but nothing would surprise me now.
What a complete and utter cock up from the start.
At last!!!!!!!!!!!!!!!!!!!
Im almost there although the sellers solicitor is trying to treat the compensation claim as some sort of negotiation now which is starting to irritate me somewhat.
We are a shocking 380 days past the contracted completion date.
My maths says (£107k/100 x 4.5)/365 x 380 = £5012.87 compensation under the terms of the contract.
First offer £3000
Second offer £4250
Ive made it pretty clear that trying to negotiate the claim will only make me dig my heals in further.
The guys a complete w***er
Im almost there although the sellers solicitor is trying to treat the compensation claim as some sort of negotiation now which is starting to irritate me somewhat.
We are a shocking 380 days past the contracted completion date.
My maths says (£107k/100 x 4.5)/365 x 380 = £5012.87 compensation under the terms of the contract.
First offer £3000
Second offer £4250
Ive made it pretty clear that trying to negotiate the claim will only make me dig my heals in further.
The guys a complete w***er
barryrs said:
Im almost there although the sellers solicitor is trying to treat the compensation claim as some sort of negotiation now which is starting to irritate me somewhat.
Ive made it pretty clear that trying to negotiate the claim will only make me dig my heals in further.
The guys a complete w***er
It's their job for them to get the best outcome for their client, whether that it the legally correct one, or not.Ive made it pretty clear that trying to negotiate the claim will only make me dig my heals in further.
The guys a complete w***er
That's standard practice.
The obvious point is that a compensation for breach clause is one that both parties agreed upon. It is frustrating that once the breach is going to happen that the breaching party then sees that part of the contract s unfair, now it suits them.
When it's happened to us, the MO is usually:
Will you take 25%? No.
50%? No.
75% - take it or leave it. Here's the total of 100% plus court fees when we take you to court this time next week.
100% in the post.
The other tactic I've used to good effect is that when they start negotiating on the phone I offer them a settlement higher than the contract.
They pause and have a WTF moment... then say "But, it says something different in the contra....' Bingo. "Shall we agree on that figure?'
By presenting them with how unacceptable it would be to renegotiate more than an agreed figure, they make the leap to realise it's also unacceptable to try to negotiate the other way too.
Glad its not just in my case then Justin. 
I think its in part my solicitors fault has i do question if he knows what hes talking about at times; he didnt even know how to calculate the compensation!
I have instructed my solicitor to inform the other party that another £145 of interest has accrued since our last correspondence and if completion isnt achieved early next week our claim will increase further.
I think its in part my solicitors fault has i do question if he knows what hes talking about at times; he didnt even know how to calculate the compensation!
I have instructed my solicitor to inform the other party that another £145 of interest has accrued since our last correspondence and if completion isnt achieved early next week our claim will increase further.
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