Building work between exchange and completion?

[Kiwi79]

Hi PHers,

We're in the process of buying a place. All going well so far until got a call from estate agent telling me the place the seller is buying has a minor structural issue. Apparently hes still keen to buy this place but wants to get a builder in to fix it.

EA says we would need to exchange and then they would do the work to the place he is buying (it's currently vacant). Is this unusual? What should I watch out for. Obvs guaranteed date work is finished for but anything else?

All a bit frustrating as we're FTB we are paying rent each month. The cynical side of me thinks as it is a house needing refurbing they are using this as an excuse to replace carpets/plaster walls etc whilst still living in the current place (told you I am cynical)

Thoughts? Is it not really my issue to worry about as a completion date is a completion date or are there things to watch out for? :-)

[LemonParty]

When you exchange you set the date for completion, which should be a date that you both agree on.

I can see that he wouldn't want to employ builders to do work n a property that he had not exchanged contracts on though.

Maybe see if he will exchange with 4 or 6 weeks completion, but expect a slight discount of say £1000 to cover your costs? Might even make it easier for you to arrange removals, notice on current rental etc. if you have a fixed date slightly further away that the normal 2 weeks.

[SantaBarbara]

Kiwi79 said:

Hi PHers,

We're in the process of buying a place. All going well so far until got a call from estate agent telling me the place the seller is buying has a minor structural issue. Apparently hes still keen to buy this place but wants to get a builder in to fix it.

EA says we would need to exchange and then they would do the work to the place he is buying (it's currently vacant). Is this unusual? What should I watch out for. Obvs guaranteed date work is finished for but anything else?

All a bit frustrating as we're FTB we are paying rent each month. The cynical side of me thinks as it is a house needing refurbing they are using this as an excuse to replace carpets/plaster walls etc whilst still living in the current place (told you I am cynical)

Thoughts? Is it not really my issue to worry about as a completion date is a completion date or are there things to watch out for? :-)

In what way does it affect you anyway?

[Lurking Lawyer]

SantaBarbara said:

In what way does it affect you anyway?

Potential uncertainty as to how long it will take and consequent potential impact on completion of OP's purchase, I would imagine....

[surveyor]

In teen of your OP this is not usual. Unless your talking about a couple of weeks I would personally not agree.

All depends on how committed to this property you are

[Gavia]

Lurking Lawyer said:

Potential uncertainty as to how long it will take and consequent potential impact on completion of OP's purchase, I would imagine....

You set the date of completion at exchange. It used to be standard for completion to be 4 weeks after exchange, but now it all seems to be done on the same day for some bizarre reason.

There’s no reason for the OP to start flapping, exchange is when you’re legally committed to the purchase / sale and the penalties for withdrawing from the contract are fairly punitive.

I did loads of work on my first home between exchange and completion. What the OP’s vendor is proposing makes perfect sense to me.

[Kiwi79]

Thanks for the thoughts. Might not be an issue depends how long they are proposing between the 2 dates

The possible issue I see the delay it creates/uncertainty where we are paying rent when we could be paying mortgage and it also adds a period where as far as I can see if the sale doesn't complete for a variety of reasons at our end e.g.) lose job, mortgage company change their mind for whatever reason then it us who end up paying penalty from what I can see (% of value).

I'm just trying to get a handle on whether this sort of thing is commonplace or not.

[Gavia]

Kiwi79 said:

Thanks for the thoughts. Might not be an issue depends how long they are proposing between the 2 dates

The possible issue I see the delay it creates/uncertainty where we are paying rent when we could be paying mortgage and it also adds a period where as far as I can see if the sale doesn't complete for a variety of reasons at our end e.g.) lose job, mortgage company change their mind for whatever reason then it us who end up paying penalty from what I can see (% of value).

I'm just trying to get a handle on whether this sort of thing is commonplace or not.

Do you see yourself losing your job? If so why are you buying a house? Why would it be better to lose your job when you have a mortgage round your neck? You’re talking about one month, maybe two at most, hardly a disaster on a 25 year loan. Once you’ve exchanged the lender can’t change their mind unless your circumstances change for the worse and even then, why tell them?

Once again, a four week timeframe between exchange and completion was the norm until fairly recently.

[bassanclan]

Often when you exchange contracts the date of completion is left blank to allow more flexibility. However in this case either party can give notice to the other requiring them to complete in 7 days. Your solicitor will charge you £1-200 for this notice, but it may be useful if it avoids an extra rent payment

[bladebloke]

bassanclan said:

Often when you exchange contracts the date of completion is left blank to allow more flexibility. However in this case either party can give notice to the other requiring them to complete in 7 days. Your solicitor will charge you £1-200 for this notice, but it may be useful if it avoids an extra rent payment

I'm not sure where you've got that from but it's not true, unless you're talking about a contract with a clause for completion by notice (which is unusual outside contracts for new builds).

If it's the usual form of contract for residential conveyances (i.e. based on the standard conditions of sale and with the usual 7 - 8 special conditions) then the completion date is VERY rarely left blank, and if it were to be, no flexibility would be added - standard condition 6.1 would engage, which sets completion as 20 working days after exchange.

OP, no real need for you to worry about what the seller's up to - that's his business. It sounds like there might be a slightly higher risk than normal that the seller would fail to complete on time, but that risk is always there to a greater or lesser extent (and he would be contractually bound to complete that day regardless and therefore responsible for your losses, if there were any)

[surveyor]

I'm really not clear if they are asking for an extended period between exchange and completion, or not?

[33q]

Ask what the requested time frames are. I wouldn't have a problem with an extended period between exchange and completion if it fitted in with me. But get some actual dates.

If the proposals hit you with costs ask the seller to contribute.

[KevinCamaroSS]

swerni said:

Ovet the last 25 years, I've only ever exchanged and completed on the same day.
It's not a new thing

Not really possible if you require a mortgage, most of the mortgage companies require several days notice of completion which cannot be given unless exchange has taken place. Our last purchase was 3 days between exchange and completion, the absolute minimum the mortgage provider would accept.

[Gavia]

swerni said:

Ovet the last 25 years, I've only ever exchanged and completed on the same day.
It's not a new thing

About 25 years ago I used to work as a mortgage broker and did 1000s of mortgages in my time. It was extremely rare to exchange and complete on the same day. Most would be 2-4 weeks after exchange.

[Gavia]

swerni said:

Maybe I'm just speshial

Never seen the point in waiting.
Only down side is waiting for the money to clear to get the keys.

There were lots of other “traditions” too that seem to have fallen by the wayside, such as completion was only ever done on the last Friday of the month, to avoid a double hit on mortgage payment on the first payment.